08.08.17

Do you need a Software Asset Management Tool for SaaS?


Eric Christopher

What SaaS means for your SAM strategy

SaaS has changed the way software is purchased and now Zylo is changing the way software is managed. According to a Gartner study:

“Overall, from 2015 to 2020, IT spending on enterprise application software will grow at a 8.6% rate (see “Forecast: Enterprise Software Markets, Worldwide, 2013-2020, 3Q16 Update” ). During this same period, SaaS growth will be 19.3%, and can be expected to reach $76 billion by 2020 (see “Forecast: Public Cloud Services, Worldwide, 2014-2020, 3Q16 Update” ). Strong SaaS revenue growth and corresponding client expenditure mean that IT leaders can no longer ignore the need to manage SaaS costs carefully.”

Capex versus opex has been a focus for IT purchases in the past, and it’s a strategic part of traditional Software Asset Management tools. But with the increase in SaaS application purchases at the enterprise, capex doesn’t exist with SaaS technology subscriptions. This shift can have a number of benefits, but now the CIO and CFO have to manage a greater amount of the opex recurring costs without an effective tool to measure and optimize it.

Why most companies don’t think they have a SaaS management problem … yet.

Many organizations don’t have strict procedures for purchasing SaaS applications or requesting access to licenses of existing SaaS applications since it’s so easy to purchase and IT and Finance are not always involved with many of the lower cost solutions. Getting visibility into all of the SaaS applications being purchased across the entire business, large and small, is often an arduous task and difficult to keep up to date. Without real-time data to showcase the catalog of SaaS applications purchased throughout the organization and the user data to track who is a provisioned user and if s/he is actually using the application regularly, many teams are missing a huge opportunity to corral one of the fastest growing expense categories in their organization.

This means that departments across the organization are acquiring new SaaS applications (sometimes with IT and other times without IT knowing), but often aren’t following through to cancel subscriptions or properly manage which team members have access to each application as teams and needs change over time.

Managing SaaS utilization is more complex and critical than ever

SaaS is often viewed as a solution to reduce complexity around software compliance and audit needs, which is partially true, but shifting gears to SaaS usage monitoring and rightsizing licenses is more important than ever, and complicated to execute well.

Actively tracking SaaS utilization is important because without knowing how services are being used across an organization, it’s impossible to quantify the value being delivered from each SaaS application.

With SaaS, it’s all about spend and usage optimization, not just compliance

It’s time for enterprises to move away from the sole focus on software license compliance and focus more on delivering cost savings and business value. SaaS optimization is an area of immediate impact that most organizations are missing today on both the spend and utilization fronts.

IT and Finance teams can identify cost savings opportunities by uncovering unused or overlapping subscriptions to SaaS applications or consolidating multi-channel spend for the same SaaS application. Getting real-time utilization provides the metrics to rightsize licenses and ensure upcoming renewals are negotiated for the number of licenses needed.

Yes, you do need a Software Asset Management Tool for SaaS

Technology is accelerating businesses, and the shift to the Cloud and SaaS is driving change faster than ever. As a result, technology spend and value are on the agenda in more and more executive meetings. Having one system of record to accurately report SaaS spend, active utilization and employee feedback is invaluable to making the best financial decisions for the organization. SaaS is not purchased or used like traditional software and cannot be managed like it.

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About the Author

Eric Christopher

Eric Christopher is CEO and Co-Founder of Zylo, the leading SaaS optimization platform that transforms how companies manage and optimize the vast and accelerating number of cloud-based applications organizations rely on today. After 14 years of buying and selling software, Eric knew there had to be a better way to manage cloud applications within a company. Eric started his career in sales at ExactTarget from 2002 to 2010. He spent the next six years in Chicago leading sales teams at Shoutlet and Sprout Social Inc., and founded Zylo in 2016.

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