The shift to the cloud has created a massive shift in how businesses purchase, manage, and renew software assets. Ten years ago, business department leaders submitted requests to Procurement or IT for every software purchase. Today, software-as-a-service (SaaS) can be purchased by any employee with the click of a button. However, the prevalence of automatic renewal clauses in SaaS subscriptions makes charting a holistic renewal strategy a critical task.
SaaS use is growing rapidly – and will continue to do so for the foreseeable future. Gartner projects that SaaS will account for 45% of total application software spending by 2021. That spending is increasingly decentralized: today, individual business units control more than 50% of their organization’s tech budget, according to Zylo data.
And for many organizations, this shift to decentralized SaaS makes sense when compared to on-premise software asset management, because SaaS tools can:
- Offer lower per-solution costs
- Prove proof of concept prior to purchase
- Be easier to implement
- Scale with the business
However, regardless of company size or experience, the growing adoption of SaaS also challenges Procurement leaders who own software sourcing to find new ways to safeguard value, demonstrate ROI, and prevent risk with this large area of investment.
An especially challenging aspect of managing SaaS across a business is developing a SaaS renewals strategy. A sound SaaS renewal strategy will:
- Reduce the financial impacts of missed renewals and redundant purchases
- Increase visibility and awareness of an organization’s entire SaaS portfolio
- Improve organizational security and data protection
Download our SaaS Renewal Management Guide to learn some of the best practices and strategies for approaching software application renewals in the age of SaaS.