In every organization, there are the systems IT knows about—and then there are the ones they don’t. The latter is known as Shadow IT, and in 2025, it’s one of the fastest-growing security and compliance risks facing businesses.
Whether it’s a marketing team adopting a new design tool without approval, an employee storing files on a personal Google Drive, or developers experimenting with unsanctioned cloud services, shadow IT is everywhere. And while it often starts with good intentions, it can create serious consequences.
This article explores what shadow IT is, why it’s growing, and how businesses can address it without stifling innovation.
What Is Shadow IT?
Shadow IT refers to any software, hardware, or cloud service used by employees without explicit approval or oversight from the organization’s IT department.
Common examples include:
- Using personal Dropbox, Google Drive, or iCloud accounts for work files.
- Installing messaging apps like WhatsApp, Telegram, or Signal for team communication.
- Signing up for SaaS tools (e.g., project management or design software) without IT involvement.
- Running unauthorized servers or virtual machines in cloud platforms.
- Using personal devices for work-related tasks without proper security controls.
Shadow IT isn’t always malicious—it usually emerges because employees want to work faster, collaborate better, or fill gaps in official tools. But the lack of oversight introduces risk.
Why Is Shadow IT Growing?
Several trends are fueling the rise of shadow IT in 2025:
1. Cloud and SaaS Explosion
With SaaS tools available at the click of a button—and often for free or low cost—teams can bypass IT and adopt what works best for them.
2. Remote and Hybrid Work
Employees working outside the office often turn to convenient personal apps and devices, especially when official solutions feel restrictive.
3. “Shadow AI”
Employees are increasingly experimenting with AI-powered tools like ChatGPT, MidJourney, or code assistants without security vetting. These tools may store or process sensitive company data.
4. Slow IT Approval Processes
When official procurement and approval take weeks, employees find their own shortcuts to get the job done.
5. Rising Tech Literacy
Non-technical staff today are more comfortable experimenting with apps and integrations, blurring the line between business and IT.
The Risks of Shadow IT
Shadow IT introduces several risks that can’t be ignored:
1. Security Vulnerabilities
Unapproved apps may lack encryption, strong authentication, or patching, making them easier targets for hackers.
2. Data Loss and Leakage
Sensitive files stored in personal accounts can be lost if an employee leaves or compromised if their personal credentials are stolen.
3. Compliance Violations
Industries bound by regulations like HIPAA, GDPR, or PCI DSS must control where and how data is stored. Shadow IT can create violations without the business even knowing.
4. Increased Attack Surface
Every new SaaS app, device, or connection adds potential entry points for attackers—none of which IT has visibility into.
5. Operational Inefficiency
Multiple teams adopting overlapping tools leads to silos, inconsistent workflows, and wasted spending.
Real-World Examples of Shadow IT Problems
- Healthcare: Doctors using personal messaging apps to share patient data, creating HIPAA violations.
- Finance: Employees exporting sensitive spreadsheets into personal Google Drives for “convenience.”
- Retail: Marketing teams adopting unsanctioned AI tools that inadvertently expose customer data in prompts.
- Startups: Developers spinning up cloud servers without approval, later leaving them unpatched and exposed.
These aren’t hypothetical—they’re scenarios that have already led to breaches and fines worldwide.
Signs Shadow IT Exists in Your Organization
How do you know if shadow IT is a problem? Look for these red flags:
- IT discovers unexpected traffic in network monitoring.
- Cloud bills include services no one remembers approving.
- Employees use personal email accounts for file sharing.
- Teams complain the “official” tools don’t meet their needs.
- Security teams detect logins from unknown apps or devices.
Chances are, shadow IT is already present—it’s a matter of visibility.
How to Address Shadow IT (Without Killing Productivity)
The challenge with shadow IT is balancing security with employee freedom. A heavy-handed ban can frustrate teams and push them further underground. Instead, organizations should focus on visibility, education, and enablement.
1. Improve Visibility
- Use cloud access security brokers (CASBs) to detect unauthorized SaaS use.
- Monitor network traffic for unknown apps.
- Implement endpoint monitoring to track unapproved installations.
2. Foster a Security Culture
- Educate employees about risks of shadow IT.
- Encourage open communication—make it safe for employees to admit what they’re using.
- Reward employees for identifying useful tools rather than punishing them.
3. Offer Better Approved Tools
- Often, shadow IT arises because official tools don’t meet user needs.
- Conduct regular surveys to identify gaps and frustrations.
- Provide sanctioned alternatives that are easy, modern, and user-friendly.
4. Simplify IT Processes
- Speed up procurement and approval workflows.
- Implement self-service portals where employees can request tools.
- Allow sandbox environments where innovation is encouraged but controlled.
5. Implement Strong Access Controls
- Enforce least privilege access to data and applications.
- Require MFA across all business systems.
- Integrate identity and access management (IAM) solutions for centralized control.
The Role of Shadow IT in Innovation
Not all shadow IT is bad. In some cases, employees experimenting with tools can uncover productivity boosters or innovative solutions.
The key is to channel this innovation safely:
- Create “innovation labs” where employees can test tools with oversight.
- Encourage teams to propose new tools for official adoption.
- Recognize that agility and security can coexist with the right policies.
Shadow IT in 2025 and Beyond
Looking forward, shadow IT will likely evolve into shadow AI as employees experiment with generative AI, automation platforms, and machine-learning tools.
Organizations must:
- Develop policies around acceptable AI use.
- Monitor how employee input (like sensitive data in prompts) is stored and processed.
- Balance innovation with the risks of exposing proprietary data to third-party AI models.
The organizations that succeed will be those that treat shadow IT not only as a threat but also as a signal—a signal of what employees actually need to be productive.
Conclusion
Shadow IT is a growing threat because it’s so easy, accessible, and often well-intentioned. But left unchecked, it can undermine security, compliance, and efficiency.
The solution isn’t to shut everything down—it’s to shine a light on the shadows. By improving visibility, fostering a culture of openness, and providing employees with secure, modern tools, businesses can reduce risks while still empowering innovation.
In 2025, addressing shadow IT is no longer optional. It’s a core part of cybersecurity strategy—and one every organization must take seriously.
