Shadow SaaS refers to cloud-based SaaS applications that are initiated and used without the knowledge or oversight of the IT or security teams. Unlike traditional IT-managed software, shadow SaaS occurs when individual employees or departments independently sign up for SaaS tools outside of the official procurement and approval process. These applications often fall under the radar, posing security and compliance risks, as they bypass the usual security checks and protocols.
How Shadow SaaS Emerges
Shadow SaaS has grown rapidly due to the increasing accessibility of cloud services, the rise of remote work, and the acceleration of digital transformation. Employees often turn to these tools to increase productivity or meet specific business needs without waiting for approval from IT departments. As a result, many organizations have numerous unmonitored SaaS applications running in the background, which creates visibility gaps for security teams. According to Grip research, 85%-90% of SaaS in use is unmanaged and unknown by the IT team.
The Business-Led SaaS Trend
The terms "business-led SaaS" or "business-led IT" are often used to describe shadow SaaS, as business units or employees independently choose SaaS tools to fulfill their needs. The business-led IT trend has been rising, with organizations adopting more decentralized technology strategies. For example, in 2021, 83% of companies recognized the value of business-led IT, where business teams source and manage their own technology solutions, particularly SaaS applications.
The Risks of Shadow SaaS
While shadow SaaS may seem harmless or even beneficial for productivity, it can introduce significant security, compliance, and financial risks. These risks include:
Lack of Visibility: IT teams are often unaware of shadow applications, making it difficult to manage access, data security, and compliance with internal policies or regulatory requirements.
Data Leakage: Without proper oversight, sensitive data may be shared or stored in unapproved applications, increasing the risk of data breaches.
Increased Costs: Shadow SaaS can lead to redundant spending on applications that may duplicate existing solutions, complicating cost management.
Managing Shadow SaaS
Organizations need to adopt proactive strategies to manage and mitigate the risks of shadow SaaS. This includes using SaaS risk management platforms, like Grip, to gain visibility into unapproved SaaS applications, insights into how these tools are being used, and risk prioritization to mitigate the applications that are above your risk tolerance. Learn more about how Grip's SaaS Security Control Plane helps organization discover, evaluate, and mitigate shadow SaaS risks:
