Identity sprawl in cloud computing: The hidden cybersecurity risk tech companies must address

The modern digital enterprise has made an unspoken pact with speed. Software is delivered faster, employees work from anywhere, and decisions are made in real time. But buried beneath this agility lies a threat too sprawling to ignore: identity sprawl in cloud computing.

In a world where cloud applications, remote access tools, and AI-generated accounts are multiplying, organizations are now managing an average of 21 to 35 digital identities per user. In cloud-native DevOps environments, machine or AI identities can outnumber human ones by as much as 40,000 to 1. What was once a manageable list of credentials has ballooned into a fragmented, risk-laden sprawl—and it is quickly becoming one of the defining cybersecurity challenges of our time.

What is identity sprawl in cloud environments?

Identity sprawl refers to the uncontrolled proliferation of digital identities across cloud, SaaS, and on-premises applications. A single user might have separate logins for their CRM, HR platform, collaboration tools, legacy databases, and internal applications—all managed independently with little integration or visibility.

In a cloud-first, remote-enabled world, every tool seems to spawn its own user directory. Add to that the rise of AI agents and automation scripts with privileged access, and the complexity becomes exponential. According to a forward-looking Venture Beat article that showcases forecasts for 2025, 57% of security executives cite identity sprawl as a top priority, and 93% are actively taking steps to control it.

Cloud-native identity management challenges

Identity sprawl didn’t begin with AI, but AI has poured fuel on the fire. Automation platforms now spin up privileged accounts dynamically for short-term tasks or microservices, often without proper deprovisioning. These ephemeral identities live outside traditional IAM oversight and become attractive entry points for attackers.

AI-driven workflows are now the primary source of new identity creation—especially those with privileged access. As businesses adopt more SaaS applications and cloud-native tools, each with their own isolated identity stacks, the sprawl expands in tandem.

Identity sprawl security risks: credentials, breaches, and AI threats

The most alarming consequence of identity sprawl is its direct connection to security breaches. In 2025, nearly 80% of all breaches involved the use of compromised or stolen credentials, often stemming from fragmented, unmanaged identities. These are not hypothetical risks—these unfolded in real time and caught the organizations unprepared:

• The Dropbox Sign breach (2024) was traced back to a mismanaged service account with excessive privileges.
• The Colonial Pipeline ransomware attack (2021) originated from a single orphaned VPN account.
• The 23andMe data breach (2023) leveraged reused credentials from prior breaches to scrape genetic data.

These incidents highlight the reality: every unmanaged identity is an open door. When hundreds or thousands of such doors exist in parallel, attackers don’t need to force their way in—they just wait for one to be left ajar.

Identity sprawl and compliance: Audit failures and regulatory exposure

Identity sprawl also undermines compliance. Regulations like the GDPR, HIPAA, and ISO 27001 require organizations to demonstrate who has access to what—and why. When identities are scattered across dozens of systems, maintaining access logs, performing audits, and revoking stale credentials becomes an impossible task.

According to recent data, over 67% of organizations acknowledge they have identity sprawl but admit they don’t know how to remediate it. That lack of control translates directly into regulatory penalties, failed audits, and board-level scrutiny.

Operational inefficiencies and financial consequences of sprawl

The costs of identity sprawl go beyond security incidents:

• Productivity suffers: 64% of organizations report reduced employee morale due to credential fatigue.
• Operational overhead increases: IT teams spend inordinate time managing access requests, resetting passwords, and deactivating accounts.
• Technical debt compounds: 66% of IT leaders say identity sprawl has increased the complexity and cost of maintaining secure systems.

In one SaaS company with just 2,000 employees, identity sprawl had generated over 100,000 human and AI identities—many of them orphaned. The lack of visibility made it impossible to manage access effectively or respond to emerging threats in real time.

How cybercriminals exploit identity sprawl

Cybercriminals have adapted their playbooks to exploit identity chaos. With tools like AI-generated phishing kits, credential stuffing bots, and deepfake-driven social engineering, attackers are targeting the very gaps that identity sprawl creates.

• Credential reuse: Users often reuse passwords. Attackers use stolen credentials from one breach to access other systems.
• Orphaned accounts: These dormant identities often retain privileges long after an employee or service is gone.
• Shadow IT: Employees signing up for tools outside IT’s purview creates unmanaged rogue accounts.
• Lateral movement: Attackers exploit over-privileged identities to move laterally and escalate access.

The SolarWinds breach is a stark example. It wasn’t a brute-force attack—it was an identity with excessive, unmonitored privileges.

Why AI is both the driver and the fix for identity sprawl

AI has created a paradox in identity management. AI-driven systems have dramatically increased identity creation. Simultaneously, AI is key to mitigating sprawl.

Modern IGA platforms use machine learning to detect anomalies, automate provisioning, and reduce privilege creep. AI-powered user behavior analytics flag risky accounts, identify orphaned credentials, and ensure access is aligned with roles in real time.

Identity sprawl drivers: Remote work, SaaS, AI agents, and shadow IT

Several macrotrends in the sphere of IT are fueling the identity sprawl crisis:

• Remote and hybrid work: Users access systems from multiple locations and devices.
• SaaS expansion: New tools create more identity silos.
• AI and bots: Machine identities massively outnumber human ones.
• Mergers and acquisitions: Integrating systems leads to unmanaged accounts.
• Shadow IT: Employees adopt tools without IT’s approval, creating blind spots.

These trends are irreversible. The solution lies in treating identity as a core layer of cybersecurity strategy.

How to manage identity sprawl in cloud environments

Security leaders must make identity hygiene a strategic priority. That means more than just installing an SSO solution. It requires a full-spectrum approach:

Make visibility the top priority across all identities

Achieving total visibility across user, service, contractor, and machine identities is a prerequisite for controlling identity sprawl. CISOs should implement centralized identity directories and logging systems that normalize identity data across platforms. Real-time dashboards, integrated with analytics, should map access rights and historical usage. This visibility enables faster risk assessment, ensures governance coverage, and supports accurate life cycle management. Identity blind spots—especially in SaaS or unmanaged tools—should be prioritized for discovery and remediation.

Automate the JML life cycle

Manual account provisioning and deprovisioning invites inconsistency and error, especially at scale. Automating the JML life cycle enables consistent and policy-based user onboarding, role transitions, and offboarding. CISOs should ensure JML workflows are tightly integrated with HR systems, IAM platforms, and business unit processes. This reduces orphaned accounts, enforces time-bound access, and ensures prompt revocation. Automating JML not only improves identity hygiene but also reduces help desk burden and accelerates user productivity.

Conduct quarterly identity audits and remediation sprints

Quarterly identity audits should not be passive reviews but proactive remediation sprints. CISOs must drive audit programs that prioritize high-risk access paths, dormant entitlements, and deviations from role-based baselines. These reviews should be automated and presented via executive dashboards, empowering business units to own accountability. By closing gaps identified during audits promptly, organizations maintain compliance, reduce exposure, and reinforce a security culture rooted in measurable outcomes.

Champion secure-by-default identity practices

CISOs must ensure identity security is the default, not an afterthought. Enforce phishing-resistant MFA, passwordless logins where feasible, and adaptive access policies based on device health or user behavior. These controls should apply across all user types—including vendors and machine accounts. By designing secure access mechanisms that are intuitive, CISOs can improve adoption rates while reducing risky work-arounds. Embed security into the user experience without creating unnecessary friction.

Treat third-party and shadow IT identities with the same scrutiny

Third-party applications and shadow IT pose some of the highest identity risks due to a lack of governance. CISOs should implement discovery mechanisms to identify unsanctioned tools and ensure they are brought under governance. Apply the same access control rigor to external vendors, contractors, and machine identities as internal users. Establish onboarding and offboarding protocols, require contractual access limits, and review entitlements regularly. Visibility and policy parity are key to mitigating third-party risks.

Leverage AI for predictive threat modeling

AI can enhance the detection and mitigation of identity threats stemming from sprawl. CISOs should invest in machine learning models trained to identify anomalies such as privilege escalation, credential stuffing, or dormant privileged accounts. These models enable predictive threat scoring and prioritized remediation. Over time, AI-driven insights can refine access policies and reduce manual governance overhead. Embedding AI in identity governance creates a scalable and intelligent layer of defense.

To address the mounting risks posed by identity sprawl, CISOs must adopt a multi-disciplinary and operationally embedded approach to identity management.

Integrate IGA into your Zero Trust architecture

Position IGA solutions as foundational to Zero Trust adoption. Ensure they cover life cycle automation, continuous policy enforcement, dynamic risk-based access, and exception handling. Emphasize the need for least-privilege enforcement, contextual access evaluation, and automatic deprovisioning.

Identity is the new cybersecurity perimeter

As the cloud becomes the new data center and AI becomes the new workforce, identity becomes the new security perimeter. Organizations that thrive will see and control every identity across their environment. Identity sprawl isn’t just a side effect of digital growth—it’s a critical risk. Addressing it now builds security, trust, and resilience.

Key takeaways for CISOs

In today’s cloud-first landscape, the CISO’s mandate includes architecting identity-centric defenses. IAM is no longer optional—it’s the foundation of cloud security. The following takeaways are critical for security leaders:

• IAM must be treated as the control plane of the cloud. It determines who accesses what, under what conditions.
• Weak IAM is the leading cause of breaches. Overprivileged accounts and compromised credentials dominate incident reports.
• IAM powers Zero Trust strategies and adaptive access control, enabling real-time and context-aware decisions.
• Compliance success hinges on IAM’s ability to log, monitor, and restrict access. It is the core of audit readiness.
• AI-driven IAM tools reduce overhead and increase visibility, particularly in multi-cloud environments.
• Machine identities must be managed with the same rigor as user accounts to avoid silent breaches.
• IAM is a shared responsibility—HR, IT, developers, and security must collaborate.
• Interoperability is key. CISOs should favor IAM solutions that span hybrid, on-premises, and multi-cloud workloads.

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