SaaS Sprawl: What It Is, Why It Matters, and How IT Can Take Back Control
It starts innocently enough… marketing signs up for a new design tool, sales tries out a different CRM, and HR tests a scheduling app. Fast-forward a year, and the average enterprise is juggling more than 275 SaaS applications. The catch? IT has direct oversight of barely half of them.
This uncontrolled growth, known as SaaS sprawl, isn’t just a budgeting headache. It introduces security blind spots, creates data silos, and makes user management a nightmare. For IT leaders, it’s the quiet problem that can quickly turn into a major operational and compliance risk.
In this post, we’ll unpack what SaaS sprawl is, why it’s on the rise, and how IT teams can rein it in without stifling the innovation and agility that SaaS makes possible.
What is SaaS Sprawl?
Before we can understand SaaS sprawl, let’s define SaaS. Software-as-a-Service (SaaS) refers to cloud-based applications accessed via the internet with just a subscription and a login. These can range from everyday productivity tools like Microsoft 365, Zoom, and Slack to business-critical platforms like Salesforce, HubSpot, and ServiceNow.
SaaS sprawl happens when these apps proliferate across an organization without centralized visibility or control, and it’s rarely the result of one big decision. More often, it’s the accumulation of small ones. A department signs up for a tool to solve an immediate need, another team adopts a similar app for a slightly different purpose, and before long, the organization is paying for multiple overlapping platforms.
The real challenge isn’t just the number of tools, but the lack of integration and governance around them. According to a report from the IBM Institute for Business Value, only 36% of enterprise tech executives say their investments in cloud, data, AI, and product engineering are managed as integrated portfolios defined by business objectives and a common architecture. In other words, most organizations don’t have a unified strategy for how technology fits together, which leaves plenty of room for duplication, inefficiency, and risk.
When SaaS adoption is decentralized, IT leaders often find themselves with incomplete visibility into what’s in use, who has access, and how those tools connect to core systems. That’s when costs spiral, data gets siloed, and security gaps emerge, all without anyone making an overtly “bad” decision.
Why SaaS Sprawl is a Problem
On the surface, SaaS sprawl might look like an efficiency win. After all, teams are finding tools that help them work faster. But without IT oversight, that same flexibility can quickly create bigger headaches.
1. Security risks
Every unmanaged app is a potential entry point for cyber threats. Shadow IT, or software adopted without IT approval, is a major contributor, and it’s more common than most realize. Some reports estimate that up to 65% of SaaS apps in use are not sanctioned by IT, meaning there’s no formal vetting of vendor security practices or compliance standards. This makes it harder to enforce policies, manage permissions, or respond quickly to incidents.
2. Data silos and integration gaps
When departments use separate tools for similar functions, data becomes scattered across platforms. This makes reporting harder, slows down cross-team collaboration, and increases the risk of errors. Inconsistent integrations also raise the chance of redundant data entry or lost information between systems.
3. User management challenges
Without centralized identity management, onboarding and offboarding become difficult to manage, not to mention risky. An unused account in a forgotten SaaS tool can linger long after an employee leaves, creating a security gap. Multiply this by dozens of platforms and the exposure grows quickly.
4. Rising costs
Licensing sprawl almost always leads to wasted budget. Research shows that 53% of apps go unused or underutilized. Overlaps between tools, like having two project management platforms or multiple file-sharing apps, add even more unnecessary spend.
The longer SaaS sprawl goes unchecked, the harder (and more expensive) it becomes to get it under control. That’s why proactive management is such a necessity.
How to Prevent and Manage SaaS Sprawl
Controlling SaaS sprawl starts with visibility. You can’t secure, integrate, or optimize what you don’t know exists, and for many IT leaders, that’s the first challenge.
1. Build a complete inventory
Start by mapping every SaaS application in use across the organization. This includes sanctioned tools and any “shadow IT” uncovered through network monitoring or expense reports. Even a simple inventory can reveal overlaps, unused subscriptions, and potential security gaps.
2. Establish governance policies
Set clear guidelines for how new SaaS tools are evaluated, approved, and integrated. This might involve defining an approval workflow, vetting vendor security practices, and aligning purchases to your architecture strategy.
3. Integrate identity and access management
Tie all SaaS applications to a central identity provider. This ensures new users are provisioned quickly and departing users have access revoked across all systems immediately, closing a major security gap.
4. Educate and engage business units
SaaS sprawl isn’t always intentional. When teams understand the risks, costs, and operational inefficiencies it creates, they’re more likely to involve IT in app selection and management. Position IT as an enabler, not a gatekeeper, to build trust.
5. Monitor usage and value
Track logins, feature adoption, and ROI for each application. If a platform is underused, you can consolidate licenses or explore alternative tools that better meet business needs.
By combining visibility, governance, and automation, IT can strike the balance between giving teams the tools they need and maintaining a secure, cost-effective environment.
Tools That Can Help Manage SaaS Sprawl
While policies and processes form the foundation of SaaS management, the right tools make it far easier to maintain control without adding manual workload to the IT team.
Microsoft Entra ID (formerly Azure Active Directory)
A strong identity and access management (IAM) solution is essential for keeping SaaS sprawl in check. Microsoft Entra ID allows you to centralize authentication with Single Sign-On (SSO), streamline provisioning and deprovisioning, and enforce conditional access policies across hundreds of SaaS applications. This not only improves security but also makes onboarding and offboarding far more efficient.
Microsoft Defender for Cloud Apps
Gaining visibility into shadow IT is a major hurdle for most organizations. Microsoft Defender for Cloud Apps (formerly Cloud App Security) automatically discovers cloud applications in use, assesses their risk level, and helps you enforce compliance policies. It can also alert IT to unusual activity patterns, helping to detect potential breaches early.
Combined, these tools give IT teams the visibility, control, and insights needed to manage SaaS environments proactively, and they work seamlessly with the Microsoft ecosystem many organizations already have in place.
Ready to Rein in SaaS Sprawl?
SaaS sprawl is a security, compliance, and efficiency challenge that grows harder to solve the longer it goes unchecked. With the right mix of visibility, governance, and automation, IT leaders can rein it in without slowing innovation.
At IX Solutions, we help you uncover hidden SaaS usage, streamline identity and access management, and make the most of the tools you already have in place.
Ready to get a handle on SaaS sprawl?Let’s start with an environment assessment to map what’s in use today and identify quick wins for security, cost savings, and productivity.