What is Shadow IT?

17 Jul 2025

What is Shadow IT ?

Shadow IT might sound like a term straight out of a spy movie but it's a real and growing threat to businesses of all sizes, the scariest part is that it is probably already happening inside your organisation, whether you know it or not.

In this blog post, we will break down:

• What Shadow IT is (in both technical and plain English terms)
• Why it’s so dangerous
• Real-world examples
• How to detect and manage it effectively

What is Shadow IT?

In Technical Terms:

Shadow IT refers to any hardware, software, cloud service or IT system used within an organisation without the approval, knowledge or oversight of the official IT department.

It includes unsanctioned:

• SaaS apps (Dropbox, Google Drive, WeTransfer, Personal One Drive)
• Cloud services (Google Drive, AWS instances)
• Devices (personal laptops, phones on company Wi-Fi)
• Communication tools (WhatsApp, Slack, Zoom)

In Layman’s Terms:

Think of Shadow IT as employees “going rogue” using their own apps and tools to get their job done faster or easier, without checking with IT.

Imagine someone saving client data to their personal Google Drive or using a free design app to finish a task, it may feel harmless, but it can open massive security holes.

Why Do Employees Use Shadow IT?

Because they’re trying to be productive, Shadow IT isn’t always malicious.

It’s often driven by good intentions, such as:

• Speed and convenience, “I need this done now and IT takes too long.”
• Better tools, “The company app is clunky, so I use a tool I like better.”
• Lack of awareness, “I didn’t realise that app wasn’t approved.”

Why Shadow IT is Dangerous

For IT & Security Teams:

• Zero visibility: You can’t protect what you don’t know exists.
• No patching or updates: Unapproved tools may be outdated or vulnerable.
• No data control: Sensitive data could be stored or shared insecurely.
• Increased attack surface: More entry points for hackers and malware.

For Business Leaders:

• Compliance violations (GDPR, ISO 27001)
• Data loss risk: what happens if an employee leaves with business-critical data stored in their personal apps?
• Brand damage: breaches due to poor cyber hygiene erode trust and client confidence.

Real-World Examples of Shadow IT

• A sales team starts using a free CRM like HubSpot without telling IT, storing client contact data in a system with no backup policy.
• A remote employee shares client files via their personal Dropbox instead of the company’s secure SharePoint system.
• Developers spin up AWS cloud servers for testing without security policies or monitoring, leading to exposed databases.
• A marketing team uses a design tool with an embedded tracking script, opening the door to a data exfiltration attack.

How to Detect and Manage Shadow IT

Step 1: Discover It

Use technical tools like:

• CASB (Cloud Access Security Brokers)
• SIEM solutions (e.g. Microsoft Sentinel, Splunk)
• Network traffic analysis to detect unsanctioned tools or unusual behaviour

Layman’s terms: These tools help the IT team see who’s using what apps, even the hidden ones.

Step 2: Understand Why

Before shutting down tools, ask: Why are people bypassing IT?

Often, it’s because:

• The official tools are hard to use
• They weren’t trained properly
• They didn’t know the policy

Step 3: Educate & Empower

Run continuous cybersecurity and awareness training to help employees understand:

• Why unapproved tools are risky
• What tools they should be using instead
• How to request new tools if needed

Use real examples to show what can go wrong.

Step 4: Implement Policy & Control

• Define a clear Acceptable Use Policy
• Provide secure alternatives (e.g. Microsoft Teams instead of WhatsApp)
• Use Zero Trust Architecture, assume no device or app is safe by default

Shadow IT Isn’t All Bad (Wait, What?)

Surprisingly, Shadow IT can be a source of innovation.

It often highlights gaps in your current toolset or workflows. When users find better tools, it can reveal what’s missing in your tech stack, if you listen.

The key is to bring those tools into the light, vet them and secure them rather than ignore or block everything.

Final Thoughts: Don’t Fight Shadow IT, Fix the Root Cause

Shadow IT is a symptom of a deeper issue: misalignment between IT controls and business needs.

To eliminate the risk, you must:

• Improve collaboration between IT and business teams
• Educate users on secure behaviour
• Make your official tools the path of least resistance

Want Help Reducing Shadow IT?

If you're unsure what apps your team is using or how much risk you're exposed to, we can help you:

Discover shadow apps in your environment
Lock down high-risk services
Replace them with secure, approved alternatives
Train your team to stay protected

LoughTec’s Security Operation Centre SOC has Managed Application Control (MAC) to allow whitelisting and blocking of applications to assist in these matters and help implement risk reduction accordingly.

LoughTec are cyber security experts, if you want to find out more on how LoughTec can help protect your business in many ways, see some further recommended information and options below.
 

Click to find out more about how much a cyber attack could potentially cost your business. 

Click to find out more about Security Operations Centre SOC 24-7-365 protection.

Click to find out more about Staff Cyber Security Awareness Training.

Click to find out more about Ransomware Protection.

You can also see more about us in our case studies and testimonials sections.