TL;DR: Shadow IT might seem harmless, but it's quietly draining budgets, weakening security, and complicating operations. For MSPs, it's not just a nuisance—it's a hidden cost center. Josys gives MSPs the visibility and control they need to reduce risk and bring unapproved tools back under governance.
Introduction
Shadow IT refers to any apps, software, or online tools that employees use without IT approval. It’s become a growing issue for businesses of all sizes. For MSPs, this is a real challenge. You’re expected to keep your clients secure, compliant, and efficient—but that’s nearly impossible when dozens of unapproved tools are running behind the scenes.
Most employees don't mean to cause harm. They use tools they know and like to get things done. But when these tools live outside of IT’s oversight, they can introduce a host of hidden issues: from security vulnerabilities to budget surprises to compliance gaps.
This article breaks down what shadow IT really costs MSPs and their clients—and how you can manage it without slowing teams down.
Why Shadow IT Keeps Growing
The rise of cloud software and easy sign-up tools has made it simple for employees to find their own solutions. Teams don’t want to wait weeks for tool approval, especially when a quick sign-up solves their problem.
From freemium tools to monthly app subscriptions, it's never been easier to go around IT. And while some tools genuinely help teams move faster, they often leave a trail of hidden risks.
For MSPs, this isn’t just a policy issue. It’s a signal that clients aren’t getting what they need from their current toolset. But if left unchecked, this behavior erodes IT control and creates bigger problems down the road.
Financial Waste That Adds Up
Shadow IT can quietly eat into budgets. One $10/month app may not seem like much, but multiply that by dozens of teams and hundreds of tools, and the costs escalate quickly.
When tools are purchased outside of IT, there's no chance to consolidate licenses, negotiate better pricing, or manage renewals. In many cases, businesses pay for software no one uses—simply because no one knows it's there.
For MSPs trying to optimize IT spend, this is a major blind spot. If you don’t know what’s being used, you can’t optimize costs. The result? Incomplete audits, bloated budgets, and missed savings.
Security Risks and Compliance Gaps
Unapproved tools often lack basic security protections. Many don’t support secure authentication, encryption, or access controls. That makes them easy targets for breaches.
Worse, sensitive data often ends up in personal or consumer-grade accounts—think Dropbox, Google Docs, or messaging apps. This creates obvious problems for regulated industries like healthcare and finance. Shadow IT frequently violates privacy laws and data handling regulations without anyone realizing it.
MSPs end up shouldering the blame when something goes wrong. If an unapproved app leads to a breach or compliance fine, clients often point to their IT partner for answers.
Productivity and Support Headaches
Tools adopted outside of IT may help individual teams in the short term, but over time they slow down the whole organization. When teams use different systems for the same tasks, collaboration gets harder. Documents live in silos. Versions get confused. Support teams are stuck trying to fix issues in apps they’ve never seen before.
This fragmentation leads to inefficiency and frustration. It also creates long-term technical debt. The more ad hoc tools in use, the harder it becomes to upgrade, consolidate, or support the environment down the line.
For MSPs, that means more time spent firefighting and less time adding value.
The New Role of the MSP
Blocking unapproved tools no longer works. People will always find workarounds. Instead, MSPs need to enable smart, secure technology use.
That means giving clients better visibility into what’s being used, offering faster approval paths, and guiding them toward secure, approved alternatives.
When clients find a tool that helps them, offer to validate it. If it checks out, help them onboard it properly. This keeps teams productive while maintaining IT control.
This shift—from gatekeeper to enabler—positions MSPs as trusted partners who empower innovation rather than stifle it.
How Josys Helps MSPs Take Control
Josys is built to help MSPs manage SaaS sprawl and shadow IT. The platform automatically uncovers all the apps running in your client environments—not just the ones that were approved.
You get real-time insights into:
- Who’s using what tools
- How much each tool costs
- Which apps are inactive or redundant
- Where potential security risks exist
Josys makes it easy to:
- Centralize software approvals and renewals
- Eliminate wasted licenses
- Flag risky or duplicate tools
- Build a clean, secure software stack
Instead of chasing rogue apps, MSPs can use Josys to bring them into the light, standardize tool usage, and deliver better results for clients.
Wrapping Up
Shadow IT is growing fast, and it’s not going away. But that doesn’t mean you have to accept it as the cost of doing business.
With better visibility and smarter processes, MSPs can turn shadow IT from a threat into a chance to lead. It starts by knowing what’s out there. Then you can guide clients toward secure, efficient software strategies that save money and reduce risk.
Josys helps you do exactly that.
Want to reduce risk and uncover hidden SaaS costs for your clients? Book a demo with Josys to get started.
