Rationalizing Your SaaS Portfolio
When the pandemic hit in 2020, businesses had to scramble to maintain operations while their employees were scattered near and far. SaaS applications played a big role in making that possible, as evidenced by the estimated market for SaaS more than doubling from 2019 to 2023.
Business units directly made most of these SaaS purchases, leading to an explosion in shadow IT. Rather than simply renewing contracts for the same number of licenses previously purchased, now is the time to examine and rationalize your SaaS portfolio.
Visibility is the first step
Before you can start the process of getting your SaaS footprint under control, you must have a clear picture of the assets that are in use in your organization. The Snow Software SaaS dashboard, for example, makes it easy to see information such as the total number of SaaS accounts, total monthly cost, percentage of users without login activity by application, and dozens of other useful metrics.
Visibility can come from a variety of sources such as accounts payable, credit cards, vendor APIs and SSO. However, these methods often miss unsanctioned and free applications. They also fail to provide reliable, accurate usage data. This data is critical to determining which applications are contributing value to the business and which are wasting resources. For this information, you must go straight to the source – the user.
Leveraging a combination of agents, browser extensions and vendor APIs, Snow SaaS Management allows you to go beyond simple login information to see how often and for how long someone is using an app and which features they’re accessing. Once gathered, Snow normalizes, categorizes and augments this raw data. It does so with additional information such as application type, privacy risk, license metric type, license requirement and other application-specific data.
Armed with this visibility, you can begin the process of SaaS app rationalization and start saving money by:
- Eliminating waste
- Optimizing the license type for each of the apps you keep
- Identifying redundant and/or unsanctioned applications and consolidating on a single solution
Eliminating waste in technology purchases
When technology purchases are decentralized and there’s no visibility into which applications are in use throughout the business, waste is almost unavoidable. In the rush to meet the demands of today’s fast-paced business environments, business units often (and understandably) make purchase decisions without a clear and complete view into what they actually need.
Snow SaaS Management makes it easy to uncover this waste. For example, below is a sample Snow SaaS dashboard focused on licenses for Adobe Creative Cloud.
From this dashboard, you can instantly see waste in several different areas:
- There are 278 licenses that have been assigned but are unused. They cost €9,403 per month.
- There are 342 unassigned licenses. Essentially, they’re just sitting on a shelf.
- There are 121 users in the Adobe portal that have no license assigned to them. These 121 users purchased licenses outside of the standard procurement process while there were 620 existing licenses that either weren’t being used or hadn’t even been assigned to a user, resulting in double wastage.
License optimization
Many SaaS applications have different subscription tiers with very different cost structures. Matching each user with the appropriate tier represents perhaps the most significant opportunity for cost savings. Once again, however, visibility and the right data is essential. You must know how someone is using the app and the specific components they are accessing to select the appropriate tier.
For example, Microsoft® 365 has multiple tiers that are defined by availability of individual application components as well as how those components are accessed — cloud/browser version or the cloud/browser and desktop versions combined. Employees leveraging only a single access point or requiring only the basic MS Office suite of applications may be on license tiers that are far more expensive than necessary.
Adobe offers distinct license tiers based on the number of applications available. They have an “all apps” license that provides access to 20+ apps and a “single app” version that allows you to pay for each app separately. The breakeven point is roughly two and a half apps. If you’re using three or more and paying for them individually, you’re likely overpaying versus the “all app” license.
While the Microsoft 365 and Adobe Creative Cloud portals both provide significant information regarding users and usage, they come with an important limitation: they only provide SaaS-based usage data. As these are both hybrid applications with SaaS usage and desktop installation, you need usage data from both environments for a comprehensive view.
Redundancy
Applications focused on common use cases such as video conferencing, instant messaging, file storage, project management and graphics software are often sources of redundancy. Snow SaaS Management’s normalization engine helps highlight this by tagging applications identified during the discovery process with an application type. That makes it easy to see, for example, that you have five different file storage applications present throughout the organization, and that a significant percentage of those licenses are going unused. You might see that an entire department is using an unsanctioned project management app and purchasing more and more of it over time.
In the example below, I filtered by application type to focus on project management software.
Next, I filtered by the “Denylisted” column to see the project management apps that had been specifically prohibited from use. I can see that there are 246 users of prohibited software throughout the organization, and that number has been growing steadily over the past year. It’s probably time to reach out to these users to try to understand why they’re using a prohibited app instead of one sanctioned by the company.
Snow SaaS Management gathers all this information and presents it in a user-friendly dashboard that makes it easy to uncover insights. These insights allow you to eliminate unnecessary licenses, uncover usage of unsanctioned software and realize efficiencies by standardizing on a single solution whenever possible.
Conclusion
SaaS applications have been a major contributing factor to enabling remote work. Their onboarding speed and ease of use make them a natural fit in today’s fast-changing business environment. The siloed nature of SaaS purchases, however, has led to waste within SaaS portfolios.
Any efforts to rein in that waste must start with visibility. You must discover what applications are in the environment — paid, free, sanctioned and unsanctioned — and what users are doing with each application.
With the proper visibility, SaaS rationalization provides the opportunity to realize significant cost savings. Learn more from our guide to Rightsizing Your SaaS Costs, or request a demo and discover how you can shine a light on shadow IT and regain control of your organization’s software environment.