Software as a Service (SaaS) has transformed the way companies access and utilize software. With its lower pricing, user accessibility, and faster time to value, SaaS has become the preferred choice for many organizations. However, without effective SaaS management, companies may face challenges such as uncontrolled growth, wasted expenses, and security risks. Here are five stats that highlight the importance of SaaS management:
- In 2023, SaaS spending is projected to reach $197 billion, growing at a rate of 17.9%. By 2024, it is expected to exceed $232 billion. These figures demonstrate the significant investment companies are making in SaaS applications to drive their businesses forward.
- On average, companies have 238 SaaS applications in their tech stack. Managing these applications can be a daunting task, especially when it comes to employee onboarding, license renewal, and identifying inactive licenses. Without proper management, organizations risk overspending on unnecessary licenses.
- 30% of SaaS licenses are inactive or underutilized, resulting in wasted expenses. This highlights the importance of regularly assessing and optimizing SaaS usage to ensure that companies only pay for the licenses they truly need.
- 83% of IT leaders are concerned about the security risks associated with SaaS applications. As more data is stored and accessed through cloud-based SaaS solutions, addressing security concerns becomes paramount. Effective SaaS management includes implementing security measures, monitoring data access, and mitigating insider threats.
- SaaS application renewals can be a significant expense for organizations. On average, companies spend 17% of their SaaS budget on renewals. It is crucial to have a clear understanding of renewal dates, contract terms, and negotiation strategies to minimize costs and optimize the value of SaaS applications.
In conclusion, these stats highlight the need for effective SaaS management to control expenses, optimize value, and mitigate security risks. By implementing robust SaaS management strategies, companies can ensure that they make the most of their SaaS investments and drive their digital transformation initiatives forward.
The Average Company Has about 300 SaaS Applications
According to recent data from the 2023 SaaS Management Index, the average company now has around 300 SaaS applications in their technology stack. This statistic signifies the growing trend of technology spending shifting towards lines of business.
Traditionally, IT departments were solely responsible for managing and purchasing software solutions. However, as technology continues to play a crucial role in every aspect of business operations, lines of business are taking ownership of their technology needs. This shift empowers teams to choose and implement SaaS applications that cater specifically to their unique requirements.
The significant increase in the number of SaaS applications per company indicates the expanding influence of non-IT departments in technology decision-making. Marketing, sales, HR, and other departments now have the flexibility to select SaaS applications that best align with their goals, without relying solely on IT.
This trend has implications for technology spending. With more autonomy and ownership in the hands of different departments, technology spending is no longer centralized within the IT budget. Instead, it is dispersed across various departments, leading to a more distributed and democratized approach to technology investment.
As the number of SaaS applications continues to rise, companies must prioritize effective SaaS management and governance to avoid issues like overspending, security risks, and uncontrolled growth. By implementing robust SaaS management practices, organizations can harness the benefits of this growing trend while ensuring efficient and secure operation of their extensive SaaS application portfolio.
1 in 6 Employees Expense SaaS Applications
One prevalent trend in the realm of SaaS applications is the increasing number of employees who are expensing these tools as part of their tech stack. In fact, statistics reveal that approximately 1 in 6 employees now take the initiative to expense SaaS applications for their work needs.
This shift in expense responsibility has significant implications for the overall tech stack within organizations. As employees have the flexibility to choose and utilize SaaS applications that align with their specific requirements, it undoubtedly leads to a more diverse and varied collection of tools being used across departments.
A notable aspect of this trend is the manner in which employees cover these expenses. Many employees resort to using their personal credit cards to purchase SaaS applications and subsequently seek reimbursement from their organization. This reliance on personal credit cards highlights the willingness of employees to invest in tools that enhance their productivity and efficiency.
However, this approach also poses challenges in terms of governance and security. When employees use personal credit cards, it can create difficulties in tracking and managing expenses. Moreover, organizations face the task of ensuring that the SaaS applications being expensed comply with their security and data protection policies.
In conclusion, the growing prevalence of employees expensing SaaS applications highlights the evolving nature of the tech stack within organizations. While it empowers employees to choose tools that best suit their needs, it also presents challenges in terms of governance and security. Organizations must strike a balance between enabling employee autonomy while maintaining control and oversight over the tools being utilized.
44% of SaaS Licenses are Inactive
The statistic that 44% of SaaS licenses are inactive holds significant implications for the cost and value of SaaS tools within organizations. When nearly half of the licenses go unused, it means that a considerable portion of the investment made in these applications is not being utilized effectively.
One potential reason for underutilization is the presence of hidden or misattributed applications. In large organizations, it is common for various departments or teams to acquire SaaS tools without proper communication or central oversight. As a result, licenses may be purchased and allocated but remain unused because employees are unaware of their existence or do not have access to them.
Another reason for underutilization is the mismatch between license quantities and actual needs. In some cases, licenses may have been purchased in bulk to meet potential demand, but the actual usage falls short of expectations. This can lead to a surplus of licenses that go unused, resulting in unnecessary costs.
To optimize license utilization, business and IT leaders should take proactive steps. Firstly, they should conduct regular audits to identify hidden or underutilized applications and reallocate licenses accordingly. Additionally, organizations should implement better monitoring and tracking systems to ensure that licenses are used effectively and efficiently.
Furthermore, conducting user surveys and feedback sessions can help identify the specific needs and preferences of employees, allowing companies to align license quantities more accurately with actual requirements.
By optimizing license utilization, organizations can reduce unnecessary costs, maximize the value of their SaaS investments, and ensure that employees have access to the tools they need to enhance productivity and efficiency.
Most Companies Renew One SaaS Application Every Day
Renewing SaaS applications is a regular task for businesses, and it is crucial to handle these renewals strategically. According to recent statistics, it has been found that on average, companies renew one SaaS application every day. This highlights the importance of proactive planning and careful management of these renewals.
One of the challenges that organizations face is the unplanned renewals of SaaS applications. Sometimes, companies may have automatic renewal clauses in their contracts, which can lead to unexpected charges if the renewal is not actively managed. Without proactive planning, businesses may end up paying for services they no longer need or want.
To effectively manage SaaS application renewals, it is essential for companies to build a calendar to track renewal dates and notification periods. This calendar can serve as a central hub for monitoring and managing renewals, enabling organizations to stay on top of upcoming expirations and take necessary action in a timely manner.
By having a dedicated renewal calendar, businesses can proactively assess their needs and make informed decisions. It allows them to evaluate the value and relevance of each SaaS application before the renewal period, and make decisions on whether to continue, modify, or terminate the subscription. Such strategic decision-making can help optimize costs, streamline operations, and ensure that companies are utilizing the most effective tools for their specific requirements.
In conclusion, with most companies renewing one SaaS application each day, proactive planning and careful management of renewals are crucial. Building a calendar to track renewal dates and notification periods is essential for strategic decision-making, optimizing costs, and ensuring that organizations are using the most suitable SaaS applications for their needs. By actively managing renewals, businesses can stay in control of their SaaS expenses and drive greater value from their software investments.
Companies Spend about $4,600 per Employee on SaaS
According to recent studies, companies spend approximately $4,600 per employee on SaaS (Software as a Service) applications annually. When you consider the total cost of cloud-based software and divide it by the number of employees, this figure can be quite staggering. In comparison, the cost for employers to provide healthcare insurance to the average employee and their dependents is slightly less than $11,000 per year.
This highlights the significant investment that businesses make in SaaS applications and raises the question of whether they should have a comprehensive strategy in place for managing these expenses. Just like healthcare benefits, SaaS applications have a direct impact on employee experience and productivity.
Research shows that having the necessary technology to perform their job efficiently greatly influences employee satisfaction. In fact, 92% of employees state that access to the right technology affects their overall satisfaction at work. Outdated technology is a major concern, with one out of three employees admitting they would consider leaving their job if the technology they use is outdated.
Furthermore, 73% of respondents believe that there are tools or technology that could help them produce higher quality work. This highlights the importance of providing employees with the necessary SaaS applications to support their work and enhance their productivity.
In light of these findings, IT and business leaders are faced with a choice: either proactively develop new ways for employees to access and acquire approved software or reactively deal with the risks and costs associated with shadow IT. Having a comprehensive strategy for managing SaaS spend per employee can not only optimize costs but also improve employee satisfaction and productivity.
