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Think of a cluttered desk, but on a digital scale.
Businesses rely on hundreds of cloud-based, third-party Software-as-a-Service (SaaS) applications. Over a quarter (28%) of SME employees require 11 or more tools to manage the worker lifecycle. From the end user perspective, this isn’t a bad thing at all.
Why not? SaaS applications are easy to activate, often coming with free editions or low-cost versions that accomplish a specialized task. Having dozens (or more) apps on a personal smartphone is a common practice. When an application is no longer useful, all you have to do is stop using it.
But from your perspective, the convenience of specialized, third-party SaaS applications comes with a challenge: SaaS sprawl. With so many apps in use, it’s easy for things to get out of hand. This sprawl leads to inefficiencies, security risks, and higher costs.
Whether you’re an IT admin feeling the strain of an overly cluttered digital desk, or a business leader looking to optimize resources, we’ve got the perfect prescription to your SaaS sprawl problem. Let’s get started.
What Is SaaS Sprawl?
SaaS sprawl is the uncontrolled expansion of SaaS applications used across an organization. As companies adopt multiple SaaS solutions to address various business needs, the number of apps used across different departments and teams grows. More often than not, IT teams remain unaware of most SaaS tools employees sign up with their business emails — a practice commonly known as shadow IT. Ultimately, this sprawl leads to blindspots, higher costs, and data management issues.
SaaS sprawl typically occurs when:
- Adoption outpaces strategy: Organizations onboard new SaaS apps without a comprehensive management strategy.
- Departmental independence: Teams select and subscribe to the SaaS tools that meet their needs in the moment.
- Ease of access: The simplicity of subscribing to and deploying SaaS apps lowers the barriers to adoption. This enables employees to quickly implement solutions without IT oversight.
In the new digital economy, the reality is that most organizations will support technology devices, software and services outside the ownership or control of IT organizations. The only solution to this problem is to improve the ongoing collaboration and communication between IT and the business so that the possibility of a surprise is minimized.
Donna Fitzgerald, research vice president, Gartner
To give an example, let’s say a company has clear policies around AI tools, asking employees to never use them. A tech-savvy junior software engineer who loves exploring new technologies comes across a new AI tool that can help him code faster. He goes ahead and signs up for this new app, entering critical company codes to test it out. The IT department has no idea of this situation as they have no SaaS management solution in place.
This new AI app gets hacked and all the data he entered there gets leaked. Now, the company faces malicious threats, financial and reputational damage, and risks their long term viability.
The end.
That’s just one of the simplest examples. There are hundreds of SaaS apps for any work-related problem you can imagine. With so many departments and employees, it’s almost certain that things are doomed to get sprawled and get out of control.
SaaS Sprawl and Shadow IT
Between 30% and 40% of IT expenditures in large enterprises are due to Shadow IT. Everest Group’s research indicates this figure could be 50% or higher.
As organizations increasingly adopt SaaS solutions, two significant issues emerge: SaaS sprawl and Shadow IT. Though related, they are distinct challenges.
SaaS sprawl refers to the uncontrolled proliferation of SaaS applications within an organization.
Shadow IT involves the use of technology, including SaaS applications, without the knowledge or approval of the IT department. Employees may use unapproved tools to meet their needs, bypassing standard protocols and introducing security risks and data silos.
According to JumpCloud’s SME IT Trends Report Q3 2024, Shadow IT accounts for 29% of IT security concerns.
While SaaS sprawl deals with managing a known/unknown but sprawling collection of applications, Shadow IT focuses on identifying and controlling unauthorized tools. Note that one can’t be managed without managing the other.
What Are the Causes of SaaS Sprawl?
Understanding the root causes of SaaS sprawl is essential for developing effective management strategies.
Lack of Visibility
Without a centralized system to track all the SaaS applications in use, IT departments can lose sight of what they have. This lack of visibility makes it difficult to manage and optimize the SaaS ecosystem effectively, and it ultimately leads to duplicative purchases and underutilized resources.
Decentralized SaaS Procurement and Decision-Making
When different departments independently choose their tools, the IT architecture becomes fragmented. This decentralization results in redundant apps, overlapping features, and increased complexity.
Company Culture
A culture that promotes autonomy and quick problem-solving can inadvertently encourage SaaS sprawl. When employees are encouraged to find their own solutions, they may turn to new SaaS tools without considering the broader impact on the organization.
Bring Your Own Device (BYOD) Policies
BYOD policies can lead to SaaS sprawl by making it easier for employees to use unapproved apps on their personal devices. With no company-wide software tracking their devices, this practice bypassess IT controls and adds to the number of unmanaged applications.
Lack of IT Asset Management
IT asset management (ITAM) combats SaaS sprawl by tracking all an organization’s This essentially creates a catalog of approved applications and tools that employees can reference. Without such a catalog, employees are more likely to seek out and subscribe to new tools independently, which contributes to sprawl.
Casting IT Into the Shadows
What you can’t see CAN hurt you when it comes to shadow IT. Learn six key shadow IT risks and how to address them proactively.
Challenges of Managing SaaS Sprawl
IT Department
60% of SME IT professionals report security as the biggest challenge, followed distantly by new services and application rollouts (42%) and the cost of remote work solutions (41%).
Unmanaged and unapproved apps can introduce significant security vulnerabilities. IT departments often struggle to enforce security policies and protect sensitive data when apps are used without their oversight. This can lead to:
- Compliance issues
- Data exposure or loss
- Security breach
- Integration complexities
- Increased support and maintenance
- Wasted IT budget spent on SaaS
- Inefficient collaboration among teams
Finance Department
SaaS sprawl leads to redundant apps with overlapping functionalities, resulting in:
- Overlapping SaaS subscriptions
- Paying for more features than needed
- Different teams using different apps with the same features
- Underutilized applications
- Paying for more licenses than needed
Executive Company Stakeholders
Ensuring that an organization’s SaaS apps align with their strategic goals is critical. Executive stakeholders need to have a clear understanding of how each tool contributes to the company’s objectives.
Another critical area when it comes to SaaS sprawl is risk management. Uncontrolled SaaS sprawl can expose the company to various risks, including data breaches, compliance violations, and operational disruptions. Executives must prioritize risk mitigation to protect the company’s interests.
Informed decision-making requires accurate data about the organization’s SaaS usage. Executives need visibility into the SaaS landscape to make strategic decisions about technology investments and resource allocation.
Best Practices for Managing SaaS Sprawl
1. Identify All SaaS Usage
You can’t secure what you cannot see. Start the SaaS sprawl management process by discovering and listing every SaaS tool used across your organization. Utilize automated tools like JumpCloud to identify all the applications in use, track subscription details, and monitor user activity. This continuous discovery process helps maintain an up-to-date inventory, minimizing the blindspots in your SaaS landscape.
2. Centralize SaaS Applications
Centralizing the management of SaaS applications can significantly reduce redundancy and improve employee productivity. Implement a centralized platform where all approved SaaS apps are listed. This approach allows IT and procurement teams to regain control while making it easier for employees to find sanctioned apps in one place without having to ask IT teams.
3. Educate Employees
Educating employees about the implications of SaaS sprawl and the importance of adhering to approved tools is vital. Conduct training sessions to inform staff about the risks associated with unauthorized applications and the benefits of using standardized solutions. Having a single source of truth for which apps are authorized is critical to empowering employees to make informed decisions when selecting SaaS tools.
4. Implement SaaS Adoption Guidelines & Policies
Establish clear policies for SaaS adoption to ensure consistency and compliance. Define criteria for selecting new SaaS applications, outline the approval process, and set usage policies. These guidelines should be the north star for all teams. They’ll help standardize SaaS procurement and usage, minimize the risk of sprawl, and ensure alignment with organizational objectives.
5. Improve Onboarding and Offboarding
Remember that new employees are often unaware of your standardized saaS usage policies. Similarly, SaaS accounts left open by departing employees can become entry points for threat actors, leading to security breaches, wasted budgets, and data sprawl.
To avoid these risks, make sure that new employees are quickly provisioned with the necessary SaaS tools. Similarly, implement thorough offboarding procedures to revoke access and manage licenses when employees leave the organization to prevent unauthorized usage and potential security risks.
Also read: IT Onboarding: A Comprehensive Guide for IT Admins
6. Conduct SaaS Audits
Regularly conducting SaaS audits helps identify and address inefficiencies and compliance issues. Review all SaaS subscriptions, assess usage patterns, and evaluate the relevance of each application. SaaS audits provide insights into underutilized tools, redundant applications, and potential cost-saving opportunities, enabling informed decision-making and optimization of SaaS investments.
7. Invest in Asset Management
IT asset management (ITAM) helps automate SaaS management and minimize IT sprawl. And SaaS applications are just one aspect of what ITAM can manage. The right tool can help you track all the hardware, software, and network assets in your infrastructure. This includes procurement, license management, retirement, and more.
How JumpCloud Puts an End to SaaS Sprawl
As we’ve learned, maintaining centralized and intentional management of all your assets is key to combating SaaS sprawl. JumpCloud, a cloud-based identity and device access management solution, is designed to help you do just that.
JumpCloud offers a browser extension that helps IT admins discover every SaaS application used in their organizations as well as understand usage patterns, from how many there are to who has access to which application. It allows admins to block access to applications or warn users about unauthorized access, and it can display all unauthorized/authorized apps in one place for admins to inventory and troubleshoot.
To regain control over your environment, try JumpCloud Free today.
