How Businesses Can Significantly Reduce Inflated SaaS Costs
As inflation and general economic uncertainties prompt C-suites to identify areas of cost reduction within their organizations, spending on software as a service (SaaS) become a prime target.
SaaS is obviously a broad category, covering any software that is centrally hosted and licensed on a subscription basis. But whatever its flavor, SaaS is an increasingly large item in business budgets, one that threatens profitability.
According to a recent report by SaaS procurement management platform Vertice, SaaS price inflation is growing four times faster than global inflation. Additionally, customers are spending 53% more on licensing than five years ago, according to the survey, with $1 out of $8 enterprises spend on SaaS products today.
"Most companies have grown their portfolio of software vendors significantly over the past 10 years...it's not uncommon for that vendor portfolio to more than double." Stephen White, Principal Analyst, Gartner
It can look like a huge pile of recurring money. But that's not surprising considering that the average organization now uses around 110 SaaS solutions, according to BetterCloud, with large enterprises using around 447.
Management fell aggressively: 57% of IT teams told Workato in a 2022 survey that they were under pressure to reduce SaaS spending — a task easier said than done in organizations where entire teams and even divisions rely on SaaS Suites to do their jobs.
To get a sense of the SaaS landscape in an era of cutbacks and cost reductions, we interviewed analysts from Gartner and PwC who study software procurement market trends.
As inflation and general economic uncertainties prompt C-suites to identify areas of cost reduction within their organizations, spending on software as a service (SaaS) become a prime target.
SaaS is obviously a broad category, covering any software that is centrally hosted and licensed on a subscription basis. But whatever its flavor, SaaS is an increasingly large item in business budgets, one that threatens profitability.
According to a recent report by SaaS procurement management platform Vertice, SaaS price inflation is growing four times faster than global inflation. Additionally, customers are spending 53% more on licensing than five years ago, according to the survey, with $1 out of $8 enterprises spend on SaaS products today.
"Most companies have grown their portfolio of software vendors significantly over the past 10 years...it's not uncommon for that vendor portfolio to more than double." Stephen White, Principal Analyst, Gartner
It can look like a huge pile of recurring money. But that's not surprising considering that the average organization now uses around 110 SaaS solutions, according to BetterCloud, with large enterprises using around 447.
Management fell aggressively: 57% of IT teams told Workato in a 2022 survey that they were under pressure to reduce SaaS spending — a task easier said than done in organizations where entire teams and even divisions rely on SaaS Suites to do their jobs.
To get a sense of the SaaS landscape in an era of cutbacks and cost reductions, we interviewed analysts from Gartner and PwC who study software procurement market trends.
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