Proven Strategies to Prevent SaaS Sprawl in Rapid-Growth Tech Companies

If your company is scaling fast, your SaaS stack is probably, often without visbility and control. Teams purchase tools independently to solve immediate problems. Over time, you’re left with overlapping apps, unused licenses, and shadow IT running across departments.

In fact, Help Net Security revealed that 73% of security professionals say they’ve used SaaS applications in 2023 that weren’t approved or supplied by their organization’s IT team. It’s not just about wasted spend but access risks, compliance gaps, and data loss.

In this guide, you’ll learn what’s driving SaaS sprawl, why it’s especially dangerous in high-growth tech environments, and how to control it before it becomes unmanageable.

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TL;DR

• SaaS sprawl happens when decentralized purchasing, shadow IT, and inconsistent offboarding go unchecked, especially during rapid growth.
• Use tools like CloudEagle.ai to discover all active apps, map owners, and track usage in real-time to uncover duplicates and underused licenses.
• Route all SaaS purchases through IT or procurement and automate approvals, renewals, and license reclamation to maintain control without slowing teams down.
• Set up real-time alerts for unapproved tools, educate employees on risks, and conduct regular audits to eliminate shelfware and ensure policy compliance.
• CloudEagle.ai helps you tackle shadow IT, manage contracts, streamline procurement, and maintain a lean, secure, and cost-efficient SaaS environment.

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What is SaaS Sprawl?

SaaS sprawl happens when different teams across your company start purchasing and using unapproved SaaS apps independently without central visibility or governance.

It starts small: a marketing team signs up for a new analytics tool, engineering tests a code review platform, and sales uses a freemium CRM to track leads. Multiply that behavior across departments, and suddenly, you're juggling hundreds of tools, most of which you didn't even know existed. 

And knowing that you are using duplicate applications is another headache. In that case, you need to use a platform like CloudEagle.ai to know which applications are redundant. Here’s an image where the platform showing how many duplicate applications you have:

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The problem isn’t the number of tools but the lack of control and visibility. With no clear ownership or tracking, redundant subscriptions pile up, sensitive data gets exposed, and costs spiral without warning.

What Causes SaaS Sprawl?

SaaS sprawl doesn’t happen overnight. It happens while you’re focused on scaling fast, onboarding new teams, and giving people the flexibility to choose their own tools. Without clear controls, it’s easy to lose sight of what’s been bought, by whom, and why.

Here’s what typically drives it:

Decentralized Purchasing

If every department can buy its own tools without involving procurement or IT, you'll quickly find yourself paying for overlapping platforms. It’s not that teams are careless, they just want to move fast. But without guardrails, you lose visibility and control.

Shadow IT Becomes the Norm

When employees sign up for SaaS tools without approvals, they create blind spots in your ecosystem. These tools often store sensitive data but fall outside your security policies. In fact, a Gartner report noted that “by 2027, 75% of employees will acquire, modify, or create technology outside IT’s visibility”, a sign that shadow IT is becoming business-as-usual.

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Lack of a Unified Inventory

If you’re still using spreadsheets to track tools, you’re flying blind. Without a real-time data on your SaaS inventory, you won’t know who’s using what, how often, or whether the license is still needed.

Inconsistent Offboarding

When someone leaves the company and their SaaS access isn't revoked immediately, you risk keeping unused accounts alive, accounts that still cost you money and could be misused.

Growth Without Governance

As you scale, the tool landscape expands. But unless you’re actively setting policies, enforcing workflows, and reviewing usage, SaaS sprawl becomes inevitable.

In the words of Kevin Mandia, CEO of Mandiant, 

“Security isn’t something you buy, it’s something you do. And it starts with visibility.” 

If you’re not seeing the full SaaS picture, you’re not in control of your stack.

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Tips to Prevent SaaS Sprawl in Rapid-Growth Tech Companies

1. Get complete SaaS visibility

When every team buys its own tools, visibility becomes the first casualty. You can’t optimize what you can’t see, so the first step is discovering all the SaaS apps used across your company, whether purchased centrally or not.

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That’s why full SaaS visibility is non-negotiable. Without it, you’re making it impossible to optimize costs, manage risk, or even make informed renewal decisions. Here’s how to build a clear picture of what’s running across your stack:

• Pull data from multiple sources like expense reports, SSO tools (like Okta or Azure AD), browser plugins, and even employee surveys. This helps surface both paid and freemium tools.
• Map each app to a team, use case, and owner so you’re not just seeing what’s used but why and by whom.
• Track login frequency and license usage to flag underused or duplicate tools early.

Slack’s former CIO Stephen Franchetti once said, “Visibility isn’t just about cost—it’s about risk and redundancy.” Without it, you end up paying for overlapping features, missing out on bulk discounts, and exposing your company to compliance violations.

Once you have a clean inventory, you can finally move from reactive SaaS management to strategic planning.

2. Centralize and Automate Procurement

Decentralized purchasing might feel efficient in the short term, like teams get what they want, when they want. But in high-growth environments, it turns into chaos fast. Legal reviews get skipped, budgets aren’t tracked, and suddenly you’re paying for ten tools that do the same thing.

Centralizing SaaS procurement doesn’t mean slowing teams down. It means giving them a structured, scalable way to buy software without compromising compliance or budget discipline. Here’s what you should focus on:

• Route all SaaS purchases through a centralized workflow, ideally tied to your procurement or IT ops team. This ensures each tool goes through security, legal, and budget checks before approval.
  
  
• Automate repetitive tasks like vendor evaluations, contract uploads, and renewal calendar entries. Tools like Coupa, Zip, or even custom Workato recipes can eliminate the back-and-forth.
  
  
• Maintain a preferred vendor list with pre-approved tools, pricing benchmarks, and contract terms. This shortens procurement cycles while keeping spend aligned with strategy.

When software buying is centralized, you not only avoid redundant apps, you build leverage for future negotiations. Over time, this structure prevents sprawl while giving teams the tools they need to move fast without creating risk behind the scenes.

3. Educate Users on Using Unapproved Applications

You need to build awareness across teams, not through long-winded policies, but through real examples and ongoing nudges. Run short sessions or lunch-and-learns that focus on why unapproved apps are risky not just for IT, but for the business as a whole. Frame the message around productivity and security, not compliance.

You can also use real-life incidents to show the ripple effect of these decisions, like how one unused shadow tool, still connected to company systems, exposed credentials that led to a phishing attack. These stories stick.

Moreover, integrate micro-reminders directly into workflows. For instance, Slack messages or Chrome plugins that notify users when they’re interacting with unvetted tools. But these nudges must be paired with a simple, transparent intake process, so employees feel like they have a sanctioned path to innovation instead of going rogue.

4. Set automated alerts to prevent unsanctioned apps

To catch shadow IT early, you need real-time alerts that flag unusual app usage the moment it happens.

As soon as someone starts using an unapproved tool, stakeholders should get notified. You don’t need to block usage immediately, but the alert gives you a chance to review, assess, and respond before things spiral.

In 2022, Block Inc. revealed a data breach affecting 8.2 million Cash App Investing users after a former employee accessed sensitive customer data. Exposed details included names, account numbers, and some trading info, though no Social Security or payment data was compromised. A $15 million settlement followed, with affected users eligible for claims..

5. Conduct Regular SaaS Audits

Keeping SaaS sprawl in check means you need a steady, ongoing process to audit your SaaS environment. Regular audits help you verify which applications are actively used, identify redundant or underused subscriptions, and spot any security gaps.

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Set a quarterly or biannual cadence to review all SaaS applications, contracts, usage reports, and access logs. This gives you a clear picture of your software landscape and keeps spending aligned with actual business needs. Audits also ensure compliance with internal policies and external regulations, reducing risk.

By committing to regular SaaS audits, you maintain control, reduce waste, and protect your organization from hidden risks, all without stifling your team’s agility.

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Risks of Ignoring SaaS Sprawl

Letting SaaS sprawl grow unchecked isn’t just a budgeting issue. It opens up operational, security, and compliance risks that quietly build up until something breaks. Here’s what can go wrong if you don’t take control:

• Security Gaps: Untracked apps can become weak entry points, especially if they store sensitive data or have admin access.
• License Waste: You may be paying for tools no one uses—without visibility, shelfware silently drains your budget.
• Compliance Trouble: Incomplete records can derail audits and delay certifications like SOC 2 or ISO 27001.
• Poor Onboarding and Offboarding: New hires may not get access on time and ex-employees may keep theirs longer than they should.
• Fragmented Collaboration: Using different tools for similar tasks creates silos, hurting productivity and data consistency.

Ignoring SaaS sprawl is like ignoring leaks in a ship. At first, it’s just a few drops. But over time, it can sink operations, burn budget, and put your entire security posture at risk.

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How to Identify and Measure SaaS Sprawl

You can’t manage what you can’t see. The first step toward controlling SaaS sprawl is knowing exactly what tools your teams are using, both sanctioned and shadow IT. Here are some effective steps you need to remember:

• Start with a Discovery Audit: Use SSO logs, expense reports, and browser plugins to detect apps in use across your company.
• Map Apps to Owners and Teams: Once identified, assign app ownership. Knowing who’s accountable for each tool helps reduce redundancy and tighten oversight.
• Check Usage and Cost Data: Review usage logs and license data to see which tools are actually used and which ones are shelfware. Compare this with contract terms and renewal dates.
• Tag High-Risk or Redundant Apps: Flag tools that duplicate functions (e.g., multiple project management platforms) or lack vendor security compliance.
• Maintain a Real-Time SaaS Inventory: A living, searchable inventory gives you visibility at all times and forms the foundation for informed decision-making.

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Using CloudEagle.ai to Prevent SaaS Sprawl in the First Place

CloudEagle.ai is a comprehensive SaaS management and governance platform that can help you discover, optimize, renewa and govern all your SaaS from a single dashboard.

CloudEagle.ai will help you identify unsanctioned apps entering your system and send automated alerts. With complete app visibility, you can rationalize your SaaS stack by eliminating redundant, duplicate apps and mitigate SaaS sprawl through effective applications rationalization.

With over 500 direct integrations, the platform provides detailed, feature level usage data into applications, licenses, spending, and vendors. 

License Management

CloudEagle.ai gives you granular visibility into how every tool in your stack is being used. Whether data is pulled via direct integrations or imported through Excel, the platform surfaces feature-level insights that go far beyond basic license counts.

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From a single dashboard, you can monitor license types, see which users are active or idle, review login behavior, and track spending tied to individual licenses. This level of detail helps eliminate guesswork and spot underused tools before they drain your budget.

You can also configure usage-based alerts to flag when it's time to upgrade high-usage users or downgrade inactive ones. App admins can run regular audits, reclaim unused licenses, and offboard users efficiently, keeping your SaaS portfolio lean and tightly managed.

Tackle Shadow IT

Shadow IT significantly contributes to SaaS sprawl, and CloudEagle.ai addresses this by offering full transparency into all applications used across teams, including those not officially approved. When unapproved apps are detected, CloudEagle.ai alerts IT teams, enabling prompt action to manage and reduce unnecessary software.

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After identifying these apps, you can choose to remove them, substitute them with more secure alternatives, or merge overlapping tools. Additionally, CloudEagle.ai supports policy enforcement to ensure that only authorized applications remain in use throughout the company.

‍Contract Management

As your company expands, managing SaaS contracts can become increasingly complex. CloudEagle.ai addresses this challenge by providing a centralized platform to monitor and oversee all your contracts. This ensures you stay informed about renewal deadlines, pricing structures, and contract terms—helping you avoid missed dates and unfavorable agreements.

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Using AI-driven metadata extraction, CloudEagle.ai captures critical information such as start and end dates, along with renewal conditions. It also sets up automated alerts, enabling you to prevent unwanted auto-renewals, negotiate improved terms, and optimize software usage accordingly.

Procurement Workflows

CloudEagle.ai streamlines procurement with automated workflows that enhance transparency and reduce delays. When a purchase request is submitted, relevant stakeholders are automatically notified via Slack and email, ensuring prompt action.

You can track progress in real-time to accelerate the procurement process. These workflows also handle critical tasks such as license reclamation, renewals, user provisioning, and deprovisioning, enabling efficient and seamless software management.

Self-Service App Catalog

The self-service app catalog is key to app rationalization by offering employees a carefully selected list of approved and relevant applications. This ensures access only to software that meets your company’s security, compliance, and value criteria.

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By directing employees toward these vetted apps, it minimizes the risk of redundant or unnecessary software entering the environment. This promotes better app consolidation and decreases the total number of applications in use across the company.

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Conclusion

Preventing SaaS sprawl is essential for rapidly growing tech companies aiming to stay secure and cost-effective. Without clear visibility, centralized control, and proactive user education, your SaaS environment can quickly spiral out of control, exposing you to security risks and unnecessary expenses.

CloudEagle.ai supports companies in managing SaaS sprawl and maximizing the value of their software investments. By delivering centralized insight into application usage, expenses, and renewal timelines and integrating with more than 500 SaaS apps, the solution provides you with the data needed to make informed, budget-conscious decisions.

Schedule a demo to discover how CloudEagle.ai can streamline your SaaS portfolio and drive significant cost reductions.

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