Zylo, the enterprise leader in SaaS Management, has unveiled findings from its 2024 SaaS Management Index, the industry’s longest-running benchmark report focused specifically on SaaS spend, adoption, and management trends. Now in its sixth year, the 2024 report analyzes data from 30M SaaS licenses and $34B+ in SaaS spend under Zylo’s management.
As organizations navigate the evolving business landscape, optimizing SaaS spend has become more critical than ever. While new research from the report shows a shift towards cautious software purchasing, shrinking SaaS portfolios, and lower per-employee spend, an urgent challenge has emerged: wasted SaaS licenses and hidden redundancies. On average, companies leave $18M in wasted spend on the table — a 7% increase from 2022.
“Inefficient SaaS management isn’t just a cost problem; it’s an innovation killer,” said Ben Pippenger, co-founder and Chief Strategy Officer at Zylo. “When budgets bleed out through waste and hidden costs, that’s money you can’t invest in new business initiatives. Companies taking charge of their SaaS environments can free up millions in cost savings for reinvestment.”
The report reveals:
- A license graveyard: Companies are only using half (49%) of their provisioned licenses.
- Redundancy runs rampant: The average company has 15 duplicative online training apps, 11 project management tools, and 10 team collaboration apps.
- Security gaps loom large: While 82% of IT/Software Asset Management leaders surveyed said security is a top priority in 2024, nearly two-thirds (65%) of employee-expensed apps have a risk score of “Poor” or “Low.” Only 2% were considered “Excellent.”
- Shadow IT persists: More than one-third of a company’s applications are shadow IT, and 67% of IT leaders cited rogue software purchases among their top SaaS challenges.
- New SaaS purchasing has slowed, but AI tools are booming: AI became the fastest-growing app category and was a popular category expensed by employees in 2023.
These challenges demand immediate action in 2024 – a year focused on rationalization and security. To effectively rein in SaaS sprawl and establish ongoing governance controls, enterprises are increasingly prioritizing the continuous discovery and categorization of SaaS alongside the on-premises strengths of Software Asset Management tools.
“Enabling employee-led purchasing of software without oversight has become unsustainable, resulting in unmanageable budgets and significant risks. This challenge has been magnified with the rapid growth of SaaS in recent years,” said Eric Christopher, co-founder and CEO of Zylo. “The good news is that companies can regain control over their applications using platforms like Zylo. Through inventory visibility, data-driven insights, and workflows, companies can now effectively manage thousands of software licenses and hundreds of application renewals.”
The 2024 SaaS Management Index highlights five opportunities for businesses to transform SaaS management pain points into strategic wins — from working cross-functionally to reinvesting savings into innovation. Regaining control of their software environments, leaders can thrive amid economic uncertainty and position their organizations for tech-driven growth.
To access the full SaaS Management Index Report, visit Zylo.com.
Image credits: Freepik
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