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What Is Shadow Data? Examples, Risks and How to Detect It

December 27, 2023
3
Min Read
Data Security

What is Shadow Data?

Shadow data refers to any organizational data that exists outside the centralized and secured data management framework. This includes data that has been copied, backed up, or stored in a manner not subject to the organization's preferred security structure. This elusive data may not adhere to access control limitations or be visible to monitoring tools, posing a significant challenge for organizations. Shadow data is the ultimate ‘known unknown’. You know it exists, but you don’t know where it is exactly. And, more importantly, because you don’t know how sensitive the data is you can’t protect it in the event of a breach. 

You can’t protect what you don’t know.

Where Does Shadow Data Come From?

Whether it’s created inadvertently or on purpose, data that becomes shadow data is simply data in the wrong place, at the wrong time. Let's delve deeper into some common examples of where shadow data comes from:

  • Persistence of Customer Data in Development Environments:

The classic example of customer data that was copied and forgotten. When customer data gets copied into a dev environment from production, to be used as test data… But the problem starts when this duplicated data gets forgotten and never is erased or is backed up to a less secure location. So, this data was secure in its organic location, and never intended to be copied – or at least not copied and forgotten.

Unfortunately, this type of human error is common.

If this data does not get appropriately erased or backed up to a more secure location, it transforms into shadow data, susceptible to unauthorized access.

  • Decommissioned Legacy Applications:

Another common example of shadow data involves decommissioned legacy applications. Consider what becomes of historical customer data or Personally Identifiable Information (PII) when migrating to a new application. Frequently, this data is left dormant in its original storage location, lingering there until a decision is made to delete it - or not.  It may persist for a very long time, and in doing so, become increasingly invisible and a vulnerability to the organization.

  • Business Intelligence and Analysis:

Your data scientists and business analysts will make copies of production data to mine it for trends and new revenue opportunities.  They may test historic data, often housed in backups or data warehouses, to validate new business concepts and develop target opportunities.  This shadow data may not be removed or properly secured once analysis has completed and become vulnerable to misuse or leakage.

  • Migration of Data to SaaS Applications:

The migration of data to Software as a Service (SaaS) applications has become a prevalent phenomenon. In today's rapidly evolving technological landscape, employees frequently adopt SaaS solutions without formal approval from their IT departments, leading to a decentralized and unmonitored deployment of applications. This poses both opportunities and risks, as users seek streamlined workflows and enhanced productivity. On one hand, SaaS applications offer flexibility and accessibility, enabling users to access data from anywhere, anytime. On the other hand, the unregulated adoption of these applications can result in data security risks, compliance issues, and potential integration challenges.

  • Use of Local Storage by Shadow IT Applications:

Last but not least, a breeding ground for shadow data is shadow IT applications, which can be created, licensed or used without official approval (think of a script or tool developed in house to speed workflow or increase productivity). The data produced by these applications is often stored locally, evading the organization's sanctioned data management framework. This not only poses a security risk but also introduces an uncontrolled element in the data ecosystem.

Shadow Data vs Shadow IT

You're probably familiar with the term "shadow IT," referring to technology, hardware, software, or projects operating beyond the governance of your corporate IT. Initially, this posed a significant security threat to organizational data, but as awareness grew, strategies and solutions emerged to manage and control it effectively. Technological advancements, particularly the widespread adoption of cloud services, ushered in an era of data democratization. This brought numerous benefits to organizations and consumers by increasing access to valuable data, fostering opportunities, and enhancing overall effectiveness.

However, employing the cloud also means data spreads to different places, making it harder to track. We no longer have fully self-contained systems on-site. With more access comes more risk. Now, the threat of unsecured shadow data has appeared. Unlike the relatively contained risks of shadow IT, shadow data stands out as the most significant menace to your data security. 

The common questions that arise:

1. Do you know the whereabouts of your sensitive data?
2. What is this data’s security posture and what controls are applicable? 

3. Do you possess the necessary tools and resources to manage it effectively?

 

Shadow data, a prevalent yet frequently underestimated challenge, demands attention. Fortunately, there are tools and resources you can use in order to secure your data without increasing the burden on your limited staff.

Data Breach Risks Associated with Shadow Data

The risks linked to shadow data are diverse and severe, ranging from potential data exposure to compliance violations. Uncontrolled shadow data poses a threat to data security, leading to data breaches, unauthorized access, and compromise of intellectual property.

The Business Impact of Data Security Threats

Shadow data represents not only a security concern but also a significant compliance and business issue. Attackers often target shadow data as an easily accessible source of sensitive information. Compliance risks arise, especially concerning personal, financial, and healthcare data, which demands meticulous identification and remediation. Moreover, unnecessary cloud storage incurs costs, emphasizing the financial impact of shadow data on the bottom line. Businesses can return investment and reduce their cloud cost by better controlling shadow data.

As more enterprises are moving to the cloud, the concern of shadow data is increasing. Since shadow data refers to data that administrators are not aware of, the risk to the business depends on the sensitivity of the data. Customer and employee data that is improperly secured can lead to compliance violations, particularly when health or financial data is at risk. There is also the risk that company secrets can be exposed. 

An example of this is when Sentra identified a large enterprise’s source code in an open S3 bucket. Part of working with this enterprise, Sentra was given 7 Petabytes in AWS environments to scan for sensitive data. Specifically, we were looking for IP - source code, documentation, and other proprietary data. As usual, we discovered many issues, however there were 7 that needed to be remediated immediately. These 7 were defined as ‘critical’.

The most severe data vulnerability was source code in an open S3 bucket with 7.5 TB worth of data. The file was hiding in a 600 MB .zip file in another .zip file. We also found recordings of client meetings and a 8.9 KB excel file with all of their existing current and potential customer data. Unfortunately, a scenario like this could have taken months, or even years to notice - if noticed at all. Luckily, we were able to discover this in time.

How You Can Detect and Minimize the Risk Associated with Shadow Data

Strategy 1: Conduct Regular Audits

Regular audits of IT infrastructure and data flows are essential for identifying and categorizing shadow data. Understanding where sensitive data resides is the foundational step toward effective mitigation. Automating the discovery process will offload this burden and allow the organization to remain agile as cloud data grows.

Strategy 2: Educate Employees on Security Best Practices

Creating a culture of security awareness among employees is pivotal. Training programs and regular communication about data handling practices can significantly reduce the likelihood of shadow data incidents.

Strategy 3: Embrace Cloud Data Security Solutions

Investing in cloud data security solutions is essential, given the prevalence of multi-cloud environments, cloud-driven CI/CD, and the adoption of microservices. These solutions offer visibility into cloud applications, monitor data transactions, and enforce security policies to mitigate the risks associated with shadow data.

How You Can Protect Your Sensitive Data with Sentra’s DSPM Solution

The trick with shadow data, as with any security risk, is not just in identifying it – but rather prioritizing the remediation of the largest risks. Sentra’s Data Security Posture Management follows sensitive data through the cloud, helping organizations identify and automatically remediate data vulnerabilities by:

  • Finding shadow data where it’s not supposed to be:

Sentra is able to find all of your cloud data - not just the data stores you know about.

  • Finding sensitive information with differing security postures:

Finding sensitive data that doesn’t seem to have an adequate security posture.

  • Finding duplicate data:

Sentra discovers when multiple copies of data exist, tracks and monitors them across environments, and understands which parts are both sensitive and unprotected.

  • Taking access into account:

Sometimes, legitimate data can be in the right place, but accessible to the wrong people. Sentra scrutinizes privileges across multiple copies of data, identifying and helping to enforce who can access the data.

Key Takeaways

Comprehending and addressing shadow data risks is integral to a robust data security strategy. By recognizing the risks, implementing proactive detection measures, and leveraging advanced security solutions like Sentra's DSPM, organizations can fortify their defenses against the evolving threat landscape. 

Stay informed, and take the necessary steps to protect your valuable data assets.

To learn more about how Sentra can help you eliminate the risks of shadow data, schedule a demo with us today.

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Discover Ron’s expertise, shaped by over 20 years of hands-on tech and leadership experience in cybersecurity, cloud, big data, and machine learning. As a serial entrepreneur and seed investor, Ron has contributed to the success of several startups, including Axonius, Firefly, Guardio, Talon Cyber Security, and Lightricks, after founding a company acquired by Oracle.

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We tackle Copilot security through two critical DSPM concepts: Sanitization and Governance.

1. Sanitization: Minimize Unnecessary Data Exposure

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Address Shadow Data and Oversharing

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How Sentra Helps

Sentra's DSPM solution leverages advanced AI technologies (like OCR, NER, and embeddings) to automatically discover and classify sensitive data across your entire Microsoft 365 environment. Our intuitive dashboards quickly highlight redundant files, shadow data, and overexposed folders. What's more, we meticulously map access at the identity level, clearly showing which users can access what specific sensitive data – enabling rapid remediation.

For example, in the screenshot below, you'll see a detailed view of an identity (Jacob Simmons) within our system. This includes a concise summary of the sensitive data classes they can access, alongside a complete list of accessible data stores and data assets.

sentra dspm identity access

2. Governance: Control AI Output to Prevent Data Leakage

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Why Output Governance Matters

Without proper controls, Copilot could inadvertently include sensitive details in its generated content or responses. This risk could lead to unauthorized sharing, unchecked sensitive data sprawl, or severe regulatory breaches. The recent EchoLeak vulnerability, for instance, starkly demonstrated how attackers might exploit AI-generated outputs to silently leak critical information.

Leveraging DLP and Sensitivity Labels

Microsoft 365’s Purview Information Protection and DLP policies are powerful tools that allow organizations to control what Copilot can output. Properly labeled sensitive data, such as documents marked “Confidential – Financial,” prompt Copilot to restrict content output, providing users only with references or links rather than sensitive details.

Sentra’s Governance Capabilities

Sentra automatically classifies your data and intelligently applies MPIP sensitivity labels, directly powering Copilot’s critical DLP policies. Our platform integrates seamlessly with Microsoft Purview, ensuring sensitive files are accurately labeled based on flexible, custom business logic. This guarantees that Copilot's outputs remain fully compliant with your active DLP policies.

Below is an example of Sentra’s MPIP label automation in action, showing how we place sensitivity labels on data assets that contain Facebook profile URLs and credit card numbers belonging to EU citizens, which were modified in the past year:

Additionally, our continuous monitoring and real-time alerts empower organizations to immediately address policy violations – for instance, sensitive data with missing or incorrect MPIP labels – helping you maintain audit readiness and seamless compliance alignment.

sentra mpip label automation sensitive data microsoft purview information protection automation

A Data-Centric Security Approach to AI Adoption

By strategically combining robust sanitization and strong governance, you ensure your regulated data remains secure while enabling safe and compliant Copilot adoption across your organization. This approach aligns directly with the core principles outlined by NIST and the EU AI Act, effectively translating high-level compliance guidance into actionable, practical controls.

At Sentra, our mission is clear: to empower secure AI innovation through comprehensive data visibility and truly automated compliance. Our cutting-edge solutions provide the transparency and granular control you need to confidently embrace Copilot’s powerful capabilities, all without risking costly compliance violations.

Next Steps

Adopting Microsoft 365 Copilot securely doesn’t have to be complicated. By leveraging Sentra’s comprehensive DSPM solutions, your organization can create a secure environment where Copilot can safely enhance productivity without ever exposing your regulated data.


Ready to take control? Contact a Sentra expert today to learn more about seamlessly securing your sensitive data and confidently deploying Microsoft 365 Copilot.

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Scaling Automated Data Security in Cloud and AI Environments

Modern cloud and AI environments move faster than human response. By the time a manual workflow catches up, sensitive data may already be at risk. Organizations need automated remediation to reduce response time, enforce policy at scale, and safeguard sensitive data the moment it becomes exposed. Comprehensive data discovery and accurate data classification are foundational to this effort. Without knowing what data exists and how it's handled, automation can't succeed.

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Sensitive Data Tagging and Classification Automation in Microsoft Purview

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Architecture Built for Scalable Security Automation

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API-First Architecture for Security Automation

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Why Sentra for Automated Remediation?

Sentra offers a unified platform for security teams that need visibility, precision, and automation at scale. Its advantages include:

  • No agents or connectors required
  • High-accuracy data classification for confident automation
  • Deep integration with leading security and IT platforms
  • Context-rich tagging to drive intelligent enforcement
  • Built-in data discovery that powers proactive policy decisions
  • OpenAPI interface for tailored remediation workflows

These capabilities are particularly valuable for CISOs, Heads of Data Security, and AI Security teams tasked with securing sensitive data in complex, distributed environments. 

Automate Data Remediation and Strengthen Cloud Security

Today’s cloud and AI environments demand more than visibility, they require decisive, automated action. Security leaders can no longer afford to rely on manual processes when sensitive data is constantly in motion.

Sentra delivers the speed, precision, and context required to protect what matters most. By embedding automated remediation into core security workflows, organizations can eliminate blind spots, respond instantly to risk, and ensure compliance at scale.

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As we move deeper into 2025, the cybersecurity landscape is experiencing a profound shift. AI-driven threats are becoming more sophisticated, cloud misconfigurations remain a persistent risk, and data breaches continue to grow in scale and cost.

In this rapidly evolving environment, traditional security approaches are no longer enough. At Black Hat USA 2025, Sentra will demonstrate how security teams can stay ahead of the curve through data-centric strategies that focus on visibility, risk reduction, and real-time response. Join us on August 4-8 at the Mandalay Bay Convention Center in Las Vegas to learn how Sentra’s platform is reshaping the future of cloud data security.

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These trends point to a critical shift: attackers are no longer just targeting infrastructure or endpoints. They are going straight for the data.

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The acceleration of multi-cloud adoption has introduced significant complexity. Sensitive data now resides across AWS, Azure, GCP, and SaaS platforms like Snowflake and Databricks. However, most organizations still struggle with foundational visibility - not knowing where all their sensitive data lives, who has access to it, or how it is being used.

Sentra’s approach to Data Security Posture Management (DSPM) is built to solve this problem. Our platform enables security teams to continuously discover, identify, classify, and secure sensitive data across their cloud environments, and to do so in real time, without agents or manual tagging.

Sentra at Black Hat USA 2025: What to Expect

At this year’s conference, Sentra will be showcasing how our DSPM and Data Detection and Response (DDR) capabilities help organizations proactively defend their data against evolving threats. Our live demonstrations will highlight how we uncover shadow data across hybrid and multi-cloud environments, detect abnormal access patterns indicating insider threats, and automate compliance mapping for frameworks such as GDPR, HIPAA, PCI-DSS, and SOX. Attendees will also gain visibility into how our platform enables data-aware threat detection that goes beyond traditional SIEM tools.

In addition to product walkthroughs, we’ll be sharing real-world success stories from our customers - including a fintech company that reduced its cloud data risk by 60% in under a month, and a global healthtech provider that cut its audit prep time from three weeks to just two days using Sentra’s automated controls.

Exclusive Experiences for Security Leaders

Beyond the show floor, Sentra will be hosting a VIP Security Leaders Dinner on August 5 - an invitation-only evening of strategic conversations with CISOs, security architects, and data governance leaders. The event will feature roundtable discussions on 2025’s biggest cloud data security challenges and emerging best practices.

For those looking for deeper engagement, we’re also offering one-on-one strategy sessions with our experts. These personalized consultations will focus on helping security leaders evaluate their current DSPM posture, identify key areas of risk, and map out a tailored approach to implementing Sentra’s platform within their environment.

Why Security Teams Choose Sentra

Sentra has emerged as a trusted partner for organizations tackling the challenges of modern data security. We were named a "Customers’ Choice" in the Gartner Peer Insights Voice of the Customer report for DSPM, with a 98% recommendation rate and an average rating of 4.9 out of 5. GigaOm also recognized Sentra as a Leader in its 2024 Radar reports for both DSPM and Data Security Platforms.

More importantly, Sentra is helping real organizations address the realities of cloud-native risk. As security perimeters dissolve and sensitive data becomes more distributed, our platform provides the context, automation, and visibility needed to protect it.

Meet Sentra at Booth 4408

Black Hat USA 2025 offers a critical opportunity for security leaders to re-evaluate their strategies in the face of AI-powered attacks, rising cloud complexity, and increasing regulatory pressure. Whether you are just starting to explore DSPM or are looking to enhance your existing security investments, Sentra’s team will be available for live demos, expert guidance, and strategic insights throughout the event.

Visit us at Booth 4408 to see firsthand how Sentra can help your organization secure what matters most - your data.

Register or Book a Session

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