SaaS

How stopping SaaS sprawl can turn subscriptions into savings

A proper SaaS assessment allows businesses to review opt-out agreements, find unused tools, spot redundant licenses, and ensure expensive services aren’t automatically updated.
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Google

· 4 min read

Just a few years ago, organizations had only a handful of SaaS, aka Software as a Service aka over-the Internet applications. “On average, we are seeing 18 SaaS subscriptions and about $136,000 in total spend at each company,” said a 2018 report from IT platform provider Blissfully.

Now,, the options for cloud-based, over-the-Internet SaaS apps are endless—like the menu on your TV that you swear used to only have, like, 50 channels.

A “2021 State of SaaS Sprawl” report from platform-maker Productiv found that large enterprises (with 10,000-plus employees) use about 364 SaaS apps on average, and small organizations (less than 500 employees) have approximately 242. According to Gartner, SaaS “remains the largest public cloud services market segment, forecasted to reach $176.6 billion in end-user spending in 2022.”

While services like Slack, Google Workspace, and Zoom have become a part of the everyday workplace infrastructure, companies must find ways to take inventory of their SaaS sprawl so they don’t overspend, according to industry pros who spoke with IT Brew.

The spend trend. A greater number of tools means a greater chance that someone might just purchase a license with their Amex.

“I mean, all you need is a credit card,” said Frank Scavo, president of the consultancy Avasant Research. “You can go in for, like, $3 a month, or in many cases, free trial software.”

The majority of the software industry has moved to SaaS, said Liz Herbert, VP and principal analyst at the consulting firm Forrester, and the options range from survey and whiteboard tools to full-fledged supply-chain management or finance systems with price tags in the millions.

But there are cost savings to be had when you take inventory of your company’s SaaS apps. “You know, the number one piece of advice is to understand what you have across the whole picture,” according to Herbert. A proper SaaS assessment allows leaders within the company to review opt-out agreements, to find unused tools, spot redundant licenses, and ensure expensive services aren’t automatically updated.

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“I can’t even tell you how many times we’ve seen one team has one Slack contract and another team has another Slack contract,” said David Campbell, CEO of the SaaS-buying platform Tropic, who sees such moments as examples of inefficient purchasing. “Those types of decisions can save you hundreds of thousands, if not millions, of dollars, just by rationalizing and spending more thoughtfully.”

Go to the polls. Monitoring tools such as Zylo and Blissfully comb through assets like expense reports to find existing licenses and SaaS uses, but don’t underestimate a non-technical option: the good, old-fashioned company poll.

“I would send out a little informal survey, or even a formal survey, to all of the managers throughout the organization and find out, ‘What SaaS programs are you using on a regular basis?’” said Scavo. Teams can then find out which SaaS programs are not being supported by IT, or which SaaS products can be standardized, he told IT Brew.

Campbell likes taking the effort a step further: Poll all the users at your company about their “mission-critical” applications. Of course, you can always use a SaaS app for that, too.

“What you’ll almost always see is that they’re going to answer with the five to 10 tools they use, and their department might have another 20 that are just sitting on someone’s credit card automatically renewing, leftover from somebody that left the company,” said Campbell.

Such polls may spot inefficiencies, as well as the kinds of tools employees will be very upset to lose.

"You don’t want to save $2 million on redundant SaaS and have revenue loss or customer satisfaction dip because now the employees [are] annoyed,” said Herbert.

Like someone with a new TV who suddenly can’t find their favorite show.—BH

Do you work in IT or have information about your IT department you want to share? Email [email protected] or DM @BillyHurls on Twitter.

Top insights for IT pros

From cybersecurity and big data to software development and gaming. Our IT Brew newsletter delivers the latest news and analysis of trends shaping the IT industry, like only The Brew can.