Subtra blog image The SaaS black hole

The SaaS black hole & how to beat it

The software landscape was forever changed in 1999 when Salesforce arguably became the first company to realise the full potential of Software-as-a-Service (SaaS). Fast forward to the present day, and SaaS is now the standard for software distribution. In 2020, an estimated 70% of SMEs worldwide have moved the majority of their software to the cloud. The global SaaS market is projected to be worth USD 307 Billion by 2026; clearly suggesting a long road for substantial growth potential.

SaaS application usage is the norm across companies of all sizes and industries. It is reported that today, the average company pays for 20 times more applications than they did five years ago. SaaS applications are also the standard across all teams and departments, with non-engineering application spend increase from 10% in 2010 to 80% in 2020.

“With great power comes great responsibility.”

To reference the Parker principle, the growth in usage is coupled with the need for increased accountability. With the explosion and availability of SaaS, any employee can log on and purchase software. The concept of having a “gatekeeper” for software purchases and the distribution of licenses are long gone, which in turn can create several hurdles for companies.

No transparency

Firstly, there is no transparent view of software spending, usage, licenses and ownership. A mid-size company with between 100 and 1000 employees uses an average of 185 SaaS applications. The application-to-person connection for the same company is 4,406, which is considerably greater than before.

Subscription wastage

There is also the ever-increasing trend in duplicate signups for software applications, unused licenses and orphaned subscriptions, which results in a direct wastage of money and resources. The average number of duplicate applications per company is 3.6 and the overall SaaS waste is nearly doubling year on year.

Inefficient SaaS management

The majority of companies either have no or inefficient SaaS management processes. This typically constitutes manual, ad hoc tracking on a spreadsheet. Companies use applications to automate and streamline almost all aspects of their business; however, their SaaS usage is a big black hole.

Security and compliance

The rapid growth of application usage has made it increasingly difficult for companies to know who uses which software, thus creating new security and compliance use cases. To comply with GDPR, SOC 2, and other privacy regulations, security applications moving to the cloud grew nearly 100% over the last two years.

Companies looking to overcome these challenges are turning to efficient SaaS management processes. But what does efficient SaaS management mean? 

SaaS management is to proactively monitor and manage the buying, onboarding, licensing, renewal, and off-boarding of all your software applications. That means having a record of the entire lifecycle for all your applications’ spending, licenses, usage, users and compliance data. This also includes automating your workflows to ensure that every change that happens is recorded for auditing purposes.

There is a solution. 

Subtra’s subscription management platform helps companies overcome their SaaS management challenges from one central place. There are many benefits to Subtra’s innovative subscription platform.

Subtra provides total transparency and control of your company’s SaaS spend. The platform also helps automate subscription procurement processes. Moreover, finance divisions can accurately track and project subscription spend across the entire company.

Subtra’s goals are to reduce spiralling costs through spend controls and to provide real-time insights and reporting. Furthermore, to reduce waste by proactively informing companies of duplicate and orphaned subscriptions. The platform helps streamline business processes and create operational excellence through robust approval workflows and smart accounting integrations.

Since last year, duplicate applications have increased by an astonishing 80%, while SaaS spend at companies is growing by an average of 25% per year. For many companies, especially startups and scaleups, subscription spending (SaaS, PaaS, IaaS) constitutes their highest cost. SaaS spend per employee per annum is topping at USD 13,000. Of this, around USD 4,000 is wasted, which means a company of 100 employees could be losing around USD 400,000 per year.

Ask yourself this, how much does your company spend on SaaS applications? If you don’t know the answer, maybe it’s time to look at what Subtra can offer.

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