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Managing SaaS sprawl is no longer optional for growing businesses—it’s imperative.
For managed service providers (MSPs), the ability to tackle this pervasive issue offers not just a challenge… it’s an incredible opportunity to elevate your service offerings, grow client trust, and secure a competitive advantage in a crowded marketplace.
A recent presentation delivered by JumpCloud Director of Product Management Serhat Can at the 2025 JumpCloudLand user conference dives into the difficulties, risks, and challenges that SaaS sprawl creates for small- to medium-sized enterprises (SMEs)… and how their MSPs are the ones that need to lead them through it.
What Is SaaS Sprawl?
SaaS sprawl is the uncontrolled proliferation of Software-as-a-Service (SaaS) applications within an organization.
It’s often driven by departmental independence, frictionless procurement processes, and a rapid increase in specialized tools being adopted by employees. While SaaS applications are great for flexibility and efficiency, a lack of centralized management leads to chaos.
Imagine a garden with multiple gardeners planting whatever they like. Without coordination, the garden becomes overgrown with competing plants, duplicative flora, and unchecked weeds—just like organizations drowning in redundant SaaS tools, unmanaged accounts, and potential security risks.
The Rising Costs of “Invisible” SaaS
SaaS sprawl often leads to dramatic, hidden costs for a business.
According to the latest SME IT Trends report, IT leaders cite their inability to keep up with the speed of the business as the number one reason SaaS sprawl persists (39% of respondents, compared to 31% six months prior). End users want to be productive and get their work done.
Without that oversight, every individual becomes a variable cost center. Simply put, businesses often pay for licenses they don’t need or use.
This unsanctioned growth creates massive inefficiencies and security vulnerabilities, leaving MSPs to clean up the mess.
For MSPs, the challenge is real. Clients rely on you to manage sprawling environments. But without full visibility of SaaS applications, managing discovery, security, and compliance becomes nearly impossible. That leads us to the biggest risks of unmanaged SaaS.
The Risks of Unchecked SaaS Sprawl
SaaS sprawl can quickly spiral out of control, putting your organization at risk. From skyrocketing costs to potential data breaches, unchecked tools can wreak havoc on efficiency and security.
The good news?
Understanding these risks is the first step to tackling them head-on and keeping your clients protected.
1. Unmanaged Identities & Access Control
SaaS usage requires authentication via user identities. Seems like a duh statement, but the implications are anything but.
When applications are procured outside of IT’s control (aka shadow IT), MSPs are left grappling with unmanaged and unmonitored accounts. These “orphan” accounts become prime targets for attackers and open clients to data breaches.
You can’t manage (or secure) what you can’t see.
2. Security Vulnerabilities
Unapproved SaaS tools can slip through an organization’s security perimeter.
Consider this—88% of admins report concerns about devices or applications being managed outside IT, according to JumpCloud’s SME IT Trends Report for Q1 2025. Each unmonitored application is a backdoor waiting to be exploited.
3. Compliance Failures
Compliance frameworks like GDPR, HIPAA, and SOC 2 require organizations to document all tools accessing protected or sensitive data. Failing to track and manage SaaS applications is not just risky—it’s a legal liability that could result in steep fines for your clients.
4. Duplicate Tools & Increased Costs
Without centralized visibility, different departments often adopt overlapping tools, squandering IT budgets. For MSPs, unmanaged SaaS environments translate into inefficiencies and frustrated clients who question their IT spending.
This unsustainable SaaS chaos presents MSPs with an opportunity to step up and provide clarity, strategy, and control for their clients.
The MSP Solution
MSPs are in a unique position to take the lead in SaaS management.
By offering visibility into shadow IT, fortified security measures, and cost optimization strategies, they can help clients convert SaaS challenges into structured, efficient systems.
Here’s what MSPs stand to gain by addressing SaaS sprawl:
- Enhanced value: Deliver measurable cost savings, improved security, and compliance-ready environments to clients.
- Stronger relationships: By solving SaaS management challenges, MSPs position themselves as indispensable, long-term partners.
- Business growth: Differentiating your MSP with comprehensive SaaS management capabilities attracts new clients in competitive markets.
The Call for Action
SaaS sprawl may feel like an overwhelming problem, but with the right tools and strategy, MSPs can transform it into a competitive edge.
It starts with understanding your clients’ environments.
Ask them critical questions like:
- Do you know how many SaaS applications are currently active in your environment?
- Are all your SaaS tools necessary, and are they being used effectively?
- How secure are the applications your employees use daily?
Chances are, their answers will highlight the urgent need for SaaS management.
JumpCloud is here to help you—and your clients—gain control. Schedule a demo today to experience the full potential of a SaaS management solution.
