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We’re all deep in the trenches of planning for 2024. The last 12-18 months have been all about cost-cutting, with a laser focus on profitability. On the other hand, 2024 will be a year of big tech bets.
If you want your organization to grow, you need to tap into those bets. You can’t rely on cost-cutting alone.
Eric Tan, CIO and Chief Security Officer at Flock Safety, agreed. “I think we’re going to see something very interesting happen in ‘24,” shared Tan. “I think wallets are going to start to open. I think we’re going to start hiring again.” If we can all agree the tides are shifting in 2024, you need to know how to fund those initiatives.
But, how do you secure funding, aside from analyzing your budget?
Most organizations are still being extremely careful about new investments, scrutinizing new purchases, and keeping tech budgets tight. Let’s be honest: tech budgets don’t have a lot of wiggle room on a good day, much less in the last few years.
Although we have optimism for the next year, software prices are also at an all-time high—even outpacing inflation, usually.
Gartner forecasts IT spend at 8% YOY growth, with software specifically growing at 14%. We’re also seeing ballooning software prices, from 9% increases in Salesforce renewals to a whole 20% increase in Google Workspace.
Flat budgets and rising prices might seem antithetical to our “big budget, claim your destiny” rhetoric, but there is an Excalibur hidden in plain sight: software optimization. In this blog, you’ll learn how to embark on your tech quests that lead your company to victory in 2024.
The Hidden Weapon in Your Software Estate
While many organizations—like yours, probably—have cut costs in the past 12-18 months, there are still ample opportunities to save within your software budgets; you just need to know where to look.
Your SaaS stack is probably a hulking beast of burden with untold redundancies and duplicate licenses hidden in its many shaggy limbs. You might keep this beast of a SaaS stack on a barely functional leash, like a SaaS spreadsheet. But, if you can wrangle in your SaaS stack fully and establish centralized visibility with your software portfolio, you can save big bucks and invest those funds right back into the business, driving innovation and enabling big bets.
Let’s consider this simple fact: 51% of licenses are wasted in any given 30-day period. Now, put that in the context of how much an organization spends on their SaaS—maybe how much your company spends on SaaS. That’s a lot of money down the drain, to the tune of $18 million in waste, on average.
Let’s figure out how you can wrangle your beast of a SaaS stack and unlock money for big bets in 2024.
4 Ways to Save Money on SaaS to Fuel Your 2024 Tech Bets
There are many ways to optimize your SaaS stack. Let’s look at four highly actionable tactics: enterprise agreements, eliminating redundancy, rightsizing licenses, and using price benchmarks.
Leverage Enterprise Agreements
When you have multiple subscriptions for the same application, you’re not getting economies of scale. If you combine those subscriptions into one agreement for your whole enterprise, then you can (potentially) lock in better pricing. More licenses typically mean a lower cost per user, so you can compile into a single subscription and get more licenses from it at a lower cost per license.
Eliminate Application Redundancy
Next, you can eliminate redundancy. While some redundancy is ok, there are applications with a lot of functional overlap that would be better to just cancel. Consolidating users onto one or a handful of preferred tools can get you to an economy of scale in your contract pricing. Not to mention it helps you reclaim some of the money you were spending on canceled applications. Reduce redundancy and save money.
Rightsize SaaS Licenses
Another way to fund your 2024 tech bets is to rightsize the licenses you keep. We like to say, “Pay for what you use, use what you pay for.” Rightsizing your SaaS licenses to a quantity that makes sense for your company means you can reduce waste and overall costs.
Brad Pollard, former CIO at Tenable, saw the effects of optimization first-hand. He and his team used Zylo’s SaaS management tool to identify redundancies, group licenses into enterprise agreements, and rightsize their licenses.
“We ended up saving a ton of money that we were reallocating to other projects,” said Pollard. “We ended up staying flat on budget, not losing any functionality, and then having money to do innovation and new projects.”
You can be a hero like Brad and free up the budget to make these big, 2024 bets.
Use Price Benchmarks
As a final tip, figure out how your SaaS pricing with vendors compares to other similar organizations. If you find out you’re overpaying, you now have meaningful leverage at the negotiation table. While it can be challenging to negotiate down, especially in today’s market of ever-increasing prices, this can be a wise and impactful lever to bring to the table.
Guide to Managing SaaS Costs
Learn MoreSeize Cost Savings to Fuel Innovation in 2024
2024 will be here before we know it. You need to be ready for those big tech bets. As CIO, you can create the budget for AI and other innovation investments by getting your arms around your SaaS stack and ensuring it’s optimized. Start with visibility. Then, wrangle that beast in, trim it down to size, and reap what you sow.
Zylo has the tools to help you pry your Excalibur from the stone and cut your stack down to a manageable size while empowering you to manage it for the long haul. Start saving money on your SaaS today. Discover the steps you need to take in our Guide to Managing SaaS Costs.