What is Shadow IT? An Outlook for IT Management in 2025

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Shadow IT has rapidly transformed into a critical discussion point in today’s digital landscape. So, what is shadow IT?

Shadow IT is defined as technology, tools, or services used without IT department approval.

As per Gartner, by 2027, 75% of employees will engage in Shadow IT activities, rising significantly from 41% in 2022​. This growth poses both opportunities and threats, including improved operational agility and heightened risks of data breaches or compliance failures.

Numerical analysis underlines the urgency. For example, unauthorised software accounts for over 50% of daily SaaS usage in more than half of surveyed businesses, with incidents occurring every 4.9 seconds. Moreover, Verizon’s DBIR reported that nearly one-third of breaches stem from vulnerabilities in shadow systems.

So, the 2025 future hinges on proactive frameworks. Models like the “Prevent-Identify-Assess-Respond” strategy help minimise these risks. However, as companies face increasing pressure to innovate, Shadow IT will likely evolve, demanding adaptive risk management and robust detection systems.

What is Shadow IT in IT Management?

Shadow IT refers to the use of software, tools, or technology solutions within an organisation without the approval or oversight of the IT department. This phenomenon often involves employees or teams adopting third-party tools or services for efficiency or convenience but operating outside official IT policies.

In IT management, shadow IT presents a dual-edged scenario. While it can drive innovation and address immediate operational needs, it simultaneously introduces security risks and data vulnerabilities.

A report by Gartner highlighted several enterprise breaches stemming from shadow IT resources. These include unvetted SaaS tools or personal devices accessing company networks, which lack standard security protocols.

Shadow IT’s prevalence is largely driven by the rapid adoption of cloud-based applications and consumer-grade tools. For example, 65% of unauthorised software usage in 2023 originated from sales and marketing teams, showing specific departmental trends​. These tools often bypass IT governance, creating the potential for data leaks and compliance violations.

Managing shadow IT effectively requires IT leaders to balance flexibility with control. Implementing robust asset monitoring, user education, and integration-friendly policies can help mitigate risks.

So, shadow IT is not just an IT management challenge—it reflects the evolving workplace dynamics in which employees prioritise convenience, sometimes at the expense of organisational security.

To understand how SaaS tools impact shadow IT management and save budgets, kindly read “What is SaaS Management? How Does It Kill Shadow IT & Save Budget?”

Why Shadow IT Happens

Shadow IT happens primarily due to the gap between organisational needs and IT provisioning. Employees often seek tools and software that deliver faster, more customised solutions than officially sanctioned systems. Gartner estimates that 75% of employees will use unauthorised tools by 2027, up from 41% in 2022, reflecting this growing trend​.

Rapid technological advancements and remote work are major drivers of shadow IT. During the pandemic, cloud-based software usage surged by 22%, with nearly 97% of these applications falling under shadow IT​.

For strategies to address related security concerns, learn more at “Types of Security Incident Management & How To Handle Them.”

Teams across industries—from marketing to HR—adopt unauthorised tools to streamline tasks, collaborate remotely, or analyse data more efficiently. However, this approach often overlooks the compliance, security, and data integrity risks associated with unvetted tools.

A significant factor is the slow pace of traditional IT departments in addressing emerging needs. Employees often perceive internal systems as cumbersome or outdated, prompting them to explore consumer-grade software with intuitive interfaces. For instance, ChatGPT emerged as a widely used shadow IT tool, with its usage growing 54% in late 2023 alone​.

Shadow IT also stems from the increasing decentralisation of IT budgets. Cledara research shows that more than 50% of IT spending now occurs outside traditional IT oversight​. While this enables departments to innovate, it raises security concerns due to fragmented control over organisational data.

What SaaS Tools Are Often Used in Shadow IT?

Shadow IT is often composed of SaaS tools such as productivity, collaboration, and analytics tools, which employees use for their work but in an informal manner. Some examples are:

  • Google Drive and Dropbox for storing files in the cloud
  • Microsoft Teams and Slack for chatting
  • Trello or Asana for project management.

These tools are often chosen because they are easy to use and can be deployed without IT management’s permission. 

Another area of interest is using artificial intelligence applications, which is another new paradigm. ChatGPT, for instance, was found to be among the SaaS solutions used for 0.26% of the total usage in Q4 2023, a rise of 54% within one quarter. Similarly, data visualisation tools like Tableau and Power BI  are widely used to analyse data and create charts and graphs in a very short time without depending on enterprise-level tools. 

On the other, bigger side, sales and marketing teams are the most active in the use of shadow IT, which is evidenced by the fact that they are behind 65% of illegal software usage. This trend highlights the importance of the availability of tools that address the needs of particular departments, for instance, CRM or lead generation. 

These include the risks of using the tools, such as security risks since the security measures cannot be verified, no integration with central systems like the Active Directory, and risk of data loss or theft through improper protection measures since there are no standard controls in place to manage access. However, using cloud storage tools such as Google Drive makes it easier to work with others, which may, in turn, lead to the sharing of sensitive information within the organisation.

The Strategy of Mitigation for Shadow IT in 2025

A strategy for mitigating shadow IT in 2025 must balance operational agility with security controls. The key is leveraging centralised systems like Active Directory for access management while incorporating real-time monitoring to detect unauthorised tools. Gartner suggests employees will engage in shadow IT, highlighting the urgency for proactive measures​.

First, enhance visibility into SaaS usage. Implement tools to monitor and map software usage across networks, identifying rogue applications. One good tool you can try is Octobits.

Research shows that shadow IT accounts for more than 50% of SaaS usage in many organisations, with incidents occurring every 4.9 seconds​. Early detection can prevent risks like data breaches and compliance violations.

For a deeper look at response tools, you can see “7 Security Incident Management Software in 2024—In-Depth Review.”

Second, streamline IT provisioning. Employees often resort to shadow IT when official processes are too slow. By offering pre-approved tools and reducing procurement delays, organisations can limit the need for unauthorised software.

Third, policies should be established around cloud storage usage. Centralising data on secure platforms like OneDrive or SharePoint reduces fragmentation and improves oversight. To better understand the processes, please explore “IT Security Incident Management: Definition, Importance, & Process.”

This approach also ensures better integration with information technology systems like Active Directory for consistent user management.

Fourth, educate employees about shadow IT risks. Many employees adopt unauthorised tools without realising the implications. Regular training can build awareness about data security and compliance responsibilities.

Finally, deploy automated risk assessment frameworks. Using AI-driven systems to evaluate the potential impact of new applications ensures quick, data-backed decisions. A practical framework like “Prevent-Identify-Assess-Respond” can provide a structured approach​.

How Octobits Helps Your Strategy of Mitigation for Shadow IT in 2025

Managing SaaS shadow IT is simpler with Octobits. Our platform provides IT teams and MSPs with a centralised dashboard, enabling visibility into all cloud-based software and tools your employees use, whether authorised or not​.

As a SaaS shadow IT management tool, Octobits integrates seamlessly with major systems like Microsoft 365 and AWS, giving you comprehensive control over tools and cloud storage. It also consolidates alerts, helping you detect shadow IT usage early to prevent data breaches​.

By automating reporting and simplifying Active Directory integration, Octobits supports secure access management without disrupting workflows. Plus, with free access until December 2024, it’s never been easier to enhance your SaaS shadow IT management strategy while cutting costs​.

Let Octobits help you stay proactive in managing shadow IT risks, empowering your IT team to focus on innovation with confidence.

In Closing

The rise of shadow IT reflects a changing workplace dynamic where employees prioritise convenience, often bypassing IT controls to meet their immediate needs. Addressing these challenges requires a collaborative approach between IT teams and employees, supported by tools like Octobits to enhance visibility and control.

But managing shadow IT is not just about mitigation; it’s about fostering a culture of transparency and accountability. Organisations that adapt to these challenges will be better positioned to thrive in the ever-evolving digital landscape. So, the next time you consider strategies for innovation and security, start by asking: What is shadow IT?

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