SaaS Consolidation in 2025: Benefits, Risks & How to Do It

If your company feels weighed down by too many SaaS tools, you’re not alone. Over time, it’s easy to end up with overlapping apps, multiple contracts, and rising subscription costs that don’t always match the value you’re getting. 

That’s where SaaS consolidation comes in. It’s about stepping back, looking at the big picture, and deciding which tools you really need to keep—and which ones can be cut or combined. With a clear consolidation strategy, you can cut unnecessary spending, simplify management for your IT team, and make everyday work smoother for your employees.

What Is SaaS Consolidation?

SaaS consolidation is the process of reducing overlapping applications or duplicate purchases. It results in a leaner, easier-to-manage environment where every app serves a clear purpose and drives value for the business.

Why SaaS Consolidation Matters for Cost and Control

SaaS consolidation is a critical lever for cost control and efficiency in the following areas:

• Lower costs: Fewer duplicate licenses and overlapping apps mean reduced subscription spend and more predictable budgets.
• Better vendor terms: Consolidation gives you leverage in negotiations, since larger, centralized contracts often secure discounts.
  
• Simplified management: With fewer tools to support, IT spends less time on maintenance, troubleshooting, and updates.
  
• Improved compliance: A smaller portfolio streamlines access reviews, security checks, and audits, reducing risk across the organization.

Key Drivers of SaaS Consolidation

The main drivers of SaaS consolidation include:

• Too many redundant tools across departments
• Budgets strained by unchecked spend
• IT burden from managing a bloated stack
• Security and compliance gaps multiply
• Frustrating employee experience

Companies usually don’t decide to consolidate SaaS tools without a clear reason. Instead, they see specific issues piling up that make consolidation the smart move.

Too Many Redundant Tools Across Departments

When separate teams adopt different apps for the same purpose, inefficiencies grow. According to the 2025 SaaS Management Index, redundancy is common. The top most redundant functions included:

• Online Training Class – 14.2 applications on average per organization
• Project Management – 9.9 applications on average per organization
• Team Collaboration – 9.5 applications on average per organization

Employees end up duplicating work, while IT must support multiple systems that solve the same problem. Consolidation resolves these overlaps by unifying teams on shared platforms.

Budgets Strained by Unchecked Spend

Duplicate subscriptions and unused licenses quietly drain resources. In 2025, our data showed that license waste per organization averaged $21M annually. Finance leaders notice rising SaaS spend without clear business value, forcing action. Consolidation addresses the issue by cutting waste and centralizing contracts.

IT Burden from Managing a Bloated Stack

Every additional application requires more integrations, permissions, and troubleshooting. As portfolios expand, IT struggles to keep pace with maintenance and support. That’s because, in 2025, IT only managed just 26% of spend and 16% of apps. Consolidation eases that load by shrinking the footprint of tools IT must oversee.

Security and Compliance Gaps Multiply

The more apps in play, the harder it is to enforce consistent security standards. Shadow tools can slip through, leaving blind spots for auditors. Consolidation reduces the number of access points and data flows, closing those gaps.

Frustrating Employee Experience

Switching between dozens of tools slows productivity and causes friction. Employees waste time learning redundant apps or struggling with inconsistent processes. Consolidation streamlines their experience by focusing usage on a smaller, unified set of applications.

AI Adoption’s Impact on SaaS Consolidation

AI adoption drives consolidation because it expands shadow usage, increases spend for AI features and consumption fees, and raises the stakes for security and compliance.

Key impacts at a glance:

• Feature convergence inside existing platforms increases tool overlap
• Shadow AI signups widen the portfolio and create governance gaps
• Budgets shift as AI add-ons and usage fees accumulate
• Security and compliance scrutiny intensifies around data access and model use
• Standardization pressure grows as teams expect AI-enabled productivity

Bringing AI into your business does not just mean adding new tools. It often requires rethinking the ones you already have. As more features like automation and analytics appear inside SaaS platforms, the overlap between apps becomes harder to ignore.

According to the State of FinOps Report (April 2025), 63% of organizations now track AI spending, up from 31% the previous year. That sharp jump shows how quickly budgets are shifting and why cost optimization and governance have become priorities for finance and IT leaders.

Our data shows that between 2021-2023, the total average number of applications per company steadily declined. However, as AI began to take hold in 2024, we saw portfolios increase in size to an average of 275 applications.

For most teams, the lesson is simple: do not just layer AI on top of an already crowded stack. Retire tools that duplicate new capabilities and free up budget before hidden expenses like compute, storage, and usage fees pile up.

At the same time, a leaner stack makes it easier to stay compliant and secure as AI policies become more stringent. Consolidation gives you the breathing room to adopt AI without letting costs or risks get out of control.

Benefits of SaaS Consolidation

The main benefits of SaaS consolidation include:

• Improved collaboration and communication
• A clearer IT infrastructure
• Cost savings across the stack
• Stronger security and compliance

Improved Collaboration and Communication

When everyone works in the same systems, it’s easier to share information and align on processes. Reducing SaaS sprawl helps eliminate miscommunication, duplicate work, and version control issues. Teams spend more time using tools productively and less time switching between them.

A Clearer IT Infrastructure

Consolidation reduces the complexity of your technology environment. With fewer apps to maintain, integrations are cleaner and systems run more reliably. IT can manage access and updates with less effort, while employees navigate a simpler, more consistent toolset.

Cost Savings Across the Stack

Every duplicate subscription or underused application adds to your bill. Consolidating trims those costs and makes vendor negotiations easier, leading to better contract terms. Over time, predictable renewals and reduced waste improve the accuracy of your budgeting.

Stronger Security and Compliance

A smaller, standardized stack limits exposure points and makes it easier to enforce security policies. With fewer apps handling sensitive data, compliance reviews run faster and you reduce the risk of shadow IT.

Overcoming the Most Common SaaS Consolidation Challenges

Consolidation brings clear benefits, but the process also comes with hurdles. The biggest challenges usually fall into four areas:

• Data migration
• User adoption
• Ongoing maintenance
• Vendor management

Data Migration

Shifting data from one platform to another can be time consuming and risky if you do not plan ahead. Issues often arise when formats do not match or when historical data is incomplete.

How to Solve Data Migration Challenges

• Audit the data you plan to move and map it carefully to the new system
• Use migration tools when possible to streamline the process
• Test with a small sample first to reduce the risk of losing information
• Address issues early before they escalate into larger problems

User Adoption

Even if consolidation makes sense financially, employees may resist changes to their daily tools. Productivity declines when people feel compelled to use unfamiliar systems.

How to Improve User Adoption During Consolidation

• Explain the reasons for consolidation and show employees the benefits they will gain, such as fewer logins and simpler workflows
• Provide training in advance so users are comfortable before the switch
• Involve influential employees early to encourage adoption within their teams

Maintenance

Reducing the number of applications does not eliminate the need for upkeep. Renewals, upgrades, and vendor updates can still create challenges if you do not monitor them closely.

How to Handle Maintenance After Consolidation

• Maintain license tracking in a single system and set reminders for renewals
• Assign ownership for each major tool so someone is accountable for updates
• Schedule regular reviews to confirm each app continues to support business goals

Vendor Management

Consolidation often means renegotiating contracts or ending long-standing agreements. Without a clear strategy, you may miss opportunities for savings or get stuck with unfavorable terms.

How to Manage Vendors During Consolidation

• Track all contracts in one place for better visibility
• Use actual usage data to strengthen negotiations with vendors
• Reach out early to explore discounts for longer commitments or bundled services

Deciding When to Cut Versus Consolidate

Every SaaS application should earn its place in your environment. Cutting is the right choice when a tool:

• Goes largely unused or shows consistently low adoption
• Does not integrate with core systems
• Duplicates another app’s functionality without adding unique value

Consolidation makes sense when multiple tools provide value but fragment workflows. Standardizing on the strongest option reduces complexity while preserving capability.

For example, if different departments each use their own project management tool, moving everyone onto one system:

• Lowers costs by eliminating overlapping subscriptions
• Improves collaboration across teams
• Simplifies training and support for IT

The decision comes down to usage and fit. Apps that fail to gain traction should be cut, while tools with strong adoption but overlapping value are better candidates for consolidation.

Technology’s Role in Simplifying Your SaaS Stack

Trying to manage consolidation with spreadsheets or ad-hoc reports leaves blind spots. Contracts get overlooked, usage data remains incomplete, and shadow IT creeps in.

SaaS Management Platforms (SMP) provide the visibility needed to:

• Centralize license, spend, and usage data
• Identify redundant tools before renewals
• Uncover adoption gaps that signal waste
• Surface security or compliance risks tied to unsanctioned apps

With this insight, decisions are based on real usage rather than assumptions. An SMP also streamline renewals and enforce governance policies, ensuring consistency across the business.

When supported by technology, consolidation becomes an ongoing process instead of a one-time cleanup. You can continuously monitor your stack, adjust to new needs, and prevent costs from creeping back in. That proactive approach keeps spend in check and ensures only the most valuable applications remain.

How to Consolidate Your SaaS Stack, Step by Step

Follow these core steps to make consolidation smoother and more effective.

1. Evaluate Current Software Needs: Review every tool in your stack. Track usage, costs, and integrations to see which apps deliver value and which do not.
   
2. Set Clear Goals: Define what you want from consolidation, such as lower spend, simpler IT, or stronger collaboration. Goals give you a benchmark for success.
   
3. Choose the Right SaaS Solutions for Your Business: When tools overlap, keep the one with the best adoption, strongest features, and reliable integration. Retire the rest.
   
4. Plan the Transition: Map out a timeline, communicate with users, and provide training so teams can adapt quickly.
   
5. Monitor and Adjust: Track results after rollout. Review usage and costs regularly to keep your stack lean and aligned with business needs.

SaaS Consolidation in Action: A Real-World Example

Adobe faced growing complexity in its software environment as its business scaled substantially.

• Software had become the company’s third-largest expense.
• Many tools slipped through procurement and expense systems with little oversight.
• Spend was growing faster than revenue .

Cynthia Stoddard, Adobe’s CIO at the time, realized they needed better insight into their full software portfolio.

By working with Zylo, Adobe:

• Discovered more than 2,600 software titles (they previously estimated around 1,800) using Zylo’s AI- and machine-learning discovery tools.
• Rationalized across the organization, consolidating dozens of tools and standardizing to 400 preferred titles.
• Achieved $60M in cost savings and avoidance.
• Reharvested more than 20,000 unused software licenses.

“Visibility into our portfolio was table stakes for the success of our program. We could not begin to manage our software if we could not understand the full scope of it.”

— Vinod Vishwan, Sr. Director of Business Planning & Operations at Adobe

Simplifying SaaS Consolidation with Zylo

Consolidation succeeds when you can see the full picture of your stack, accurately measure usage, and act on that data with confidence. Zylo gives you the visibility to identify overlap, the insights to guide decisions, and the automation to keep your environment lean long after the first round of cuts.

With Zylo, consolidation is an ongoing discipline that saves money, reduces risk, and creates a software stack that actually works for your teams. Explore how Zylo’s Discovery & Inventory solution can give you the visibility to cut waste and streamline your portfolio. To see it in action, request a demo today.

Frequently Asked Questions About SaaS Consolidation