What is Shadow IT?

January 29, 2024

Code42 Author

A business women working on her personal computer in the shadows

Shadow IT is any information technology an employee uses without IT approval, including software, applications, services, and devices. Unauthorized tools can put a company at risk of compliance violations or data breaches.

Unfortunately, the rapid adoption of cloud services has made shadow IT more prevalent, exposing organizations to security hazards.

Examples of shadow IT

Shadow IT consists of unsanctioned applications and hardware, with the software typically being well-known brand names.

Some examples of shadow IT applications and cloud-based services are:

Slack, Trello, and other productivity tools
Gmail, Google Drive, and other Google Suite elements
Dropbox, Box, and other peer-to-peer collaboration tools
Apple AirDrop and other Bluetooth-based sharing tools
WhatsApp and other messaging apps
Microsoft Office 365 tools
Generative AI tools

Another way for shadow IT to creep into an organization is through devices. A few examples of shadow IT hardware include:

Personal laptops
Tablets
Smartphones
USB flash drives
Hard disk drives (HDDs)
PCs

Why does shadow IT occur in businesses?

Shadow IT occurs in businesses because employees may need to work differently than their organization’s current tools allow them to do. In fact, a recent study found that 32% of workers use unapproved communication and collaboration tools.

For example, an organization may block specific actions on their email application, so an employee uses their personal Gmail to complete the work. Another example could be a third-party vendor uses a particular project management software, so an employee accesses it on their device to communicate with them.

While accessing unapproved apps and software isn’t typically malicious, shadow IT does introduce various risks.

The emerging threat of mirror IT

Whereas shadow IT focuses on unsanctioned technology, a threat called mirror IT is emerging in software your company has approved.

Mirror IT is a sanctioned application where employees have personal and professional accounts and use the personal one to share data insecurely. Examples of this technology include Google Drive, Gmail, Slack, and OneDrive.

The best way to detect mirror IT is with a comprehensive data protection solution that has complete visibility into all data movement and automatically prioritizes security risks based on the context of the file and user — not just the destination someone moves it to.

Eliminate your shadow IT data blind spots with Code42 Incydr

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What are the risks of shadow IT?

There are four primary risks of shadow IT:

Security gaps: Unsanctioned file sharing and collaboration tools can create situations where employees move IP intentionally or unintentionally without security knowing.

Operational or security concerns related to banned apps: Banned technology may not comply with privacy laws, regulations, or a company’s data protection standards.

Inefficient operations: If different employees unknowingly purchase duplicate or similar solutions, it can create “app sprawl,” wasting company time and money.

Loss of data access: If an employee stores company files on a personal drive, the business loses access to those assets.

While shadow IT can be a large security hazard, if a company manages it appropriately, it can drive employee efficiency and performance.

What are the benefits of shadow IT?

The principal benefit of shadow IT is the boost in productivity and collaboration. Business leaders could also see employees’ ingenuity as critical in fostering a culture of speed, agility, flexibility, and innovation.

Security teams can harness this advantage of shadow IT while safeguarding company data by:

Streamlining the technology procurement process to eliminate bottlenecks
Using security tools that help them maintain control over system permissions
Implementing a comprehensive data protection solution that has complete visibility of data movement — whether to unsanctioned or sanctioned apps
Educating employees on the risks of shadow IT

Establishing constructive ways of addressing shadow IT can promote efficiency while protecting the business.

What are the challenges of shadow IT?

In the dynamic landscape of the modern workforce, shadow IT poses significant challenges for organizations. One major hurdle is the lack of awareness within security departments about the applications in use by employees, making it impossible to provide proper support and protection. The risks associated with unsanctioned applications, such as file sharing and collaboration tools, can also lead to sensitive data leaks.

Beyond just security concerns, shadow IT can result in “app sprawl,” where different departments unknowingly acquire duplicate solutions, leading to wasted time, money, and collaboration inefficiencies.

To mitigate shadow IT challenges, organizations must gain full visibility into their data landscape, monitor file movements to both authorized and unauthorized application use, and educate end-users on security best practices to ensure a secure and streamlined environment.

Protect your organization from the risks of shadow IT

Addressing shadow IT can be intimidating. Where do you even start, when there could be small leaks from hundreds of different applications? Traditional data protection software and data policies only cover what you think is at risk. Code42 offers a solution that detects data movement to both sanctioned and unsanctioned applications.

Code42 Incydr is an intelligent data protection solution that identifies all risky data movement – not just the exfiltrations that security has classified – helping you see and stop potential data leaks from employees. Incydr automatically detects data movement to untrusted cloud apps, blocks unacceptable exfiltrations, and tailors security’s response based on the offender and the offense. Employees who make security mistakes are automatically sent educational training to correct user behavior and reduce shadow IT risk over time.