If you’re like most American adults, you’ve subscribed to multiple streaming services. On average, American households pay for three streaming subscriptions per month. Yet if you don’t actively use all of these services, the costs add up with no real value to your family. Now apply that analogy to large-scale enterprises—this is SaaS sprawl.
SaaS sprawl often occurs without proper IT oversight. This leads to decentralized purchasing, redundant applications, and increased security risks. To address this issue, companies can implement strategies like centralized procurement, employee education, and SaaS audits. TenHats can provide strategies for optimizing SaaS usage.
What Is SaaS Sprawl?
SaaS sprawl is when you have more software-as-a-service (SaaS) applications within an organization than necessary. It occurs when multiple departments or employees purchase and use SaaS applications without proper IT oversight or coordination.
Key characteristics include:
- Lack of visibility
- Redundant applications
- Increased security risks
The sprawl of SaaS apps can also lead to inefficiencies, higher costs, and data management challenges across your organization.
Shadow IT
While related, SaaS sprawl differs from shadow IT, which specifically involves the use of unapproved technology without IT knowledge. Sprawling SaaS applications encompass the broader issue of unmanaged SaaS application growth. This includes both approved and unapproved apps.
How SaaS Sprawl Occurs
SaaS sprawl occurs through a combination of factors, such as:
- Decentralized purchasing
- Bring-your-own-device policies
- Increased popularity and accessibility of SaaS apps
Decentralized purchasing allows individual departments or employees to acquire SaaS tools independently, often without IT approval or oversight. This lack of centralized management results in redundant applications and inefficiencies across the organization.
The rise of bring-your-own-device (BYOD) policies worsens the issue. This allows employees to easily install and use SaaS applications on their personal devices, bypassing traditional IT controls.
There has been an increased popularity and accessibility of SaaS applications. This is thanks to their easy activation and often free or low-cost versions, making it simple for employees to adopt new tools quickly.
Shadow IT contributes significantly to sprawl. As much as 41% of employees may sign up for applications using their business emails, leaving IT teams unaware of the tools being used across the organization. This decentralized approach to SaaS adoption leads to a lack of visibility, increased security risks, and challenges in managing the overall SaaS ecosystem.
The Impact Sprawling SaaS Subscriptions Has On Your Business
SaaS sprawl can have significant negative impacts on your business, particularly as the number of applications grows unchecked. One of the most immediate effects is increased costs, as organizations often pay for redundant or underutilized applications.
Security risks also escalate, with each new application potentially introducing vulnerabilities or data breaches if not properly vetted and managed. Inefficiencies and redundancies can also arise when different departments use overlapping tools, leading to siloed information and decreased productivity.
Compliance issues become more complex, as well. Each SaaS application may handle sensitive data differently, making it challenging to ensure GDPR or HIPAA compliance.
Another issue is that the proliferation of SaaS subscriptions creates difficulty in managing and organizing data across multiple platforms. This fragmentation can hinder decision-making processes and limit the ability to gain comprehensive insights from company-wide data.
How To Fix Saas Sprawl
Gain visibility
Conducting comprehensive SaaS audits helps organizations identify all applications in use, including shadow IT. Implementing SaaS management platforms provides real-time insights into:
- App usage
- Costs
- Security risks
This visibility enables IT teams to reduce sprawl and improve efficiency by eliminating redundancies, optimizing licenses, and making informed decisions about the SaaS portfolio.
Centralize SaaS procurement
Centralizing SaaS procurement establishes a single process for evaluating and approving new applications. It creates an approved list of vetted apps, preventing unauthorized purchases and redundant tools. It also enables better oversight and alignment with organizational needs while reducing security risks and ensuring compliance across the company.
Educate employees
Training staff on approved applications allows your organization to ensure that employees are proficient in using sanctioned tools, reducing the need to seek alternatives. Raising awareness about the risks of unauthorized SaaS usage encourages employees to adhere to company policies and avoid introducing unsanctioned applications into the workplace.
Optimize SaaS stack
Optimizing your SaaS stack reduces sprawl by eliminating redundant applications and streamlining your software ecosystem. This process involves:
- Identifying and removing overlapping tools
- Consolidating licenses across departments
- Negotiating better deals with vendors
By centralizing and rationalizing your SaaS portfolio, you can gain better control over your software environment, effectively curbing SaaS sprawl.
Implement governance policies
Implementing governance policies reduces sprawl by developing clear guidelines for SaaS adoption and establishing approval processes for new applications. These policies create a structured framework for evaluating and integrating new SaaS tools, ensuring they align with organizational needs and security standards.
By centralizing decision-making and enforcing consistent evaluation criteria, governance policies prevent the uncontrolled proliferation of applications and promote a more streamlined, secure SaaS environment.
How TenHats Can Help
TenHats can help. We’re an IT MSP (Managed Service Provider) that offers a solution to the growing challenge of sprawling SaaS apps. Many companies struggle to assess the ROI of their SaaS applications or even identify who’s using them, leading to inefficient spending and potential security risks.
We can help you optimize your SaaS spending by:
- Gaining visibility into your SaaS ecosystem
- Understanding which services are being underutilized
- Learning which services can be canceled
Our comprehensive approach to IT management includes strategies for controlling SaaS proliferation, ensuring that your business maintains a lean and effective software environment.
