SaaS sprawl and shadow IT: what IAM teams need to fix

TL;DR: High-growth companies are overbuying SaaS, with organisations over 1,000 employees using about 500 applications on average and wasting one-third of that budget on unused licenses, according to Zluri. The governance issue is no longer just cost containment: unmanaged app usage creates access, renewal, and control gaps that IAM teams cannot ignore.

NHIMG editorial — based on content published by Zluri: SaaS Management How High-Growth Companies Can Reduce SaaS Spend

By the numbers:

• In 2018, a company spent around $343,000 on SaaS, which is a 78% increase compared to the previous year.
• around 33% of all SaaS software spend is wasted across organizations
• around 80% of employees

Questions worth separating out

Q: How should security teams govern shadow IT in SaaS environments?

A: Start by treating shadow IT as an inventory and access problem, not just a policy violation.

Q: Why do overlapping SaaS apps create more risk than simple budget waste?

A: Because each extra application adds its own identity boundary, permission model, and offboarding path.

Q: What signals show that SaaS license management is working?

A: Look for fewer premium licenses left idle, a shorter gap between usage decline and downgrade, and a clear owner for every renewal decision.

Practitioner guidance

• Inventory all SaaS applications and owners Create a single register that includes sanctioned and unsanctioned tools, named business owners, renewal dates, and the identities tied to each app.
• Right-size licenses from observed usage Compare premium tiers against actual feature consumption and downgrade roles that do not use advanced capability.
• Eliminate overlapping tools before entitlement tuning Map duplicate functionality across collaboration, file storage, task management, and analytics tools, then retire the weaker or unused option.

What's in the full article

Zluri's full blog post covers the operational detail this post intentionally leaves for the source:

• App comparison examples for consolidating overlapping SaaS tools across teams and functions.
• Step-by-step usage analysis for deciding when to downgrade or remove premium licenses.
• Practical procurement questions for identifying shadow IT before renewals and spend reviews.
• Operational guidance on mapping transactions, contracts, and subscriptions to individual users and applications.

👉 Read Zluri's analysis of how high-growth companies can reduce SaaS spend →

SaaS sprawl and shadow IT: what IAM teams need to fix?

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