The definition of software is rapidly evolving away from on-premise to the cloud. And like all forms of digital transformation, Software Asset Management (SAM) teams – and their tools – need to adapt or risk being left behind.
After years of exponential growth, Bessemer Venture Partners now predicts Software-as-a-Service (SaaS) will make up a majority of all software used in the next three years.
Software Asset Management teams need to prepare for this fast-approaching shift to the cloud. Yet, an April 2021 poll conducted by the ITAM Review found only 50% of information technology asset management (ITAM) and SAM teams regularly practice SaaS Management. Even more, only 15% use a dedicated SaaS Management solution in conjunction with their Software Asset Management system.
In order to stay relevant in today’s market, SAM teams need to look to the future, and the future is SaaS. It will not only help organizations evolve the key tools they use to get the job done, but adds a layer of job security—as we fully believe the SaaS Manager will soon become one of the most in-demand positions in enterprise tech.
How Managing SaaS Differs from SAM
For decades, the enterprise software lifecycle fell solely under IT control. They sourced and purchased software, vetted security compliance, and managed the on-premise deployment, before passing off license management to SAM teams.
In the early 2000s, software purchasing made its first shift away from IT, with department heads becoming the principal buyers of specialized software, serving functions like marketing, HR, design, and finance.
More recently, we’ve seen a shift to the end-user model, banking on low-cost licenses and freemium subscriptions to attract new customers. This shift flipped the buying power from IT to individual users, meaning any employee with a credit card can bring new software into the organization. Today, our SaaS Management Index shows that individual employees and lines of business (LOBs) make up the primary drivers of how SaaS enters an organization, with IT teams controlling just 27% of the SaaS spend.
This shift in purchasing power creates new challenges for Software Asset Management teams, and often bypasses traditional SAM oversight processes. Without governance, unmanaged SaaS quickly becomes problematic.
Top Risks of Unmanaged SaaS Include:
- Shadow IT: Shadow IT occurs when individuals or departments acquire software independently from IT, meaning the acquisition bypasses traditional vetting for cost, compliance, and other criteria. It typically leads to a proliferation of off-the-books applications, with the average large organization now paying for over 600 applications.
- Redundant Applications: Without centralized oversight, multiple teams and employees often purchase individual licenses for the same software. According to our data, the average large organization pays for roughly 90 applications purchased by more than one employee. Going the al-a-carte route also prevents IT and SAM teams from negotiating enterprise-level agreements for lower costs and additional features.
- Missed Renewals: The average large organization experiences approximately one SaaS application renewal every business day. Without regular oversight and monitoring, expensive auto renewals quickly pile up, sometimes even for unused software.
- Security Risks: Shadow IT leads to increased risk as applications unknown to IT security teams go unvetted for vulnerabilities that could cause data breaches or other issues. According to an IBM-Ponemon Institute cybersecurity study, the average data breach in the United States costs more than $8 million.
Most significantly, all of these risks—shadow IT, redundant applications, automatic renewals, and security breaches—drive up costs and waste valuable resources that could be better spent on solutions to help employees excel in their jobs. On the flipside, bringing SaaS Management into the SAM mix offers several benefits.
How Zylo Connects SaaS with Your Software Asset Management Tools
Zylo for Software Asset Managers allows you to continuously discover all software and track license usage and renewals across your entire tech stack, including IT-managed software and shadow IT.
Even more, Zylo easily drives cost savings by spotlighting redundant and unused licenses. You can also analyze your SaaS portfolio in conjunction with your on-premise software via our API connection to your Software Asset Management tools.
Take a look at how Zylo optimizes SaaS Assessment Management in a central system of record.
- Lower costs with data-driven insights: Discover your complete SaaS inventory — even mischaracterized software— so you can identify and remove redundant or unused applications.
- Make key decisions on the fly: See real-time recommendations to drive savings and automate workflows to deprovision licenses.
- Manage chargebacks with ease: Streamline SaaS software chargebacks between departments with key usage insights.
- Combine SaaS data with SAM: Pair usage and license data with your Software Asset Management tools to contextualize SaaS among on-premise assets.
Ready to learn how Zylo’s Software Asset Management Tools can help you tackle this new reality and start managing your SaaS today? Reach out for a personalized demo and product run-through.