2022 was a year of great change for most companies.
Heading into the year, most organizations were continuing to scale operations. We were entering a post-Covid era, where organizations were starting to get comfortable with a truly hybrid structure, after having quickly outfitted their workforce to work from home after the onset of the pandemic in 2020-2021. Organizations were investing heavily in the the tools and technology that employees needed to thrive in this new environment. SaaS became the modern workplace, with most organizations opening up their tech stacks to ensure that employees could connect, experiment, and find new ways to do their jobs.
That was true for the team at Grubhub.
“In 2022, growth was super critical in our industry. And with that comes a lot of folks buying stuff or thinking they need stuff, and not as much of Grubhub saying no,” said Brett Bartolai, Senior Director, Procurement at Grubhub. “That’s what led to such a large footprint of software applications that we have today.”
As the year went on though, the public markets continued their downward trajectory, valuations shrunk, and the private markets constricted. Revenue growth slowed, and revenue churn increased. The word “recession” became a real threat to businesses. About halfway through the year, most companies began assessing their business fundamentals – top-line revenue and bottom-line costs. As a result, Q3 and Q4 saw a quick (and sometimes blanket) approach to business optimization, with most companies looking to impact/lower costs that are flexible and operational in nature, i.e. Operational Expenditures (OpEx).
2023: The Year Software Management Goes Mainstream
After a tumultuous 2022, what I’m seeing now is that 2023 is ushering in a new normal – one focused on responsible growth. A new normal where business fundamentals matter and the mantra of “growth at all costs” is getting replaced with “grow smart and do more with less.”
As more organizations embrace this idea of responsible growth, more will turn toward software management – and specifically SaaS management – to curb their OpEx costs today and develop programmatic strategies to keep spending in line for years to come.
How Companies are Weathering the Storm
As the Chief Customer Officer at Zylo, I have the unique purview of seeing how economic conditions have impacted our customers and how they are approaching this initiative to lower OpEx. On average, we’ve found that the two largest drivers of controllable operating expenditure are: 1) employee headcount and 2) subscription software (i.e., SaaS). And many of our customers have turned to these two areas to start the bottom-line optimization that would be critical for ongoing success.
This has proven reality for Coupa. Gürkan Berkan, Director of IT Compliance at Coupa shared with me on the SaaSMe Unfiltered podcast, “[At Coupa], we are encouraged to be more detail-oriented and are taking a look at our spend more carefully… We’re slimming down as necessary.”
More specifically, our Zylo customers fell into one of two camps:
- OpEx savings has become a critical and immediate company goal or
- A Reduction in Force (RIF) was completed quickly, and realizing ongoing savings post-RIF has become an ongoing goal
Where does your company fall? Are you looking to drive down costs to avoid any employee impact? Are you post-RIF, looking to continue the cost optimization push and ensure the full realization of cost savings value in the wake of departing employees?
In either case, Zylo has you covered. As a pioneer of the SaaS management space, the team here at Zylo has long known about the power of getting visibility into your SaaS to tame your spend, reduce risk and create efficiencies.
If you want to learn exactly how our customers are reducing their OpEx to reach their savings goals with SaaS Management, I’ll be sharing the best practices we use in my next post, which you can check out here.