SaaS Subscription Management vendor Blissfully have published their SaaS Trends report for 2019. This report is based on aggregated and anonymised data from their customers and provides a number of fascinating insights into the SaaS market. You can download the report here
The report confirms how dynamic and fragmented SaaS usage is across all industries and company sizes. One of the greatest challenges in managing SaaS is it is virtually frictionless – easy to purchase, easy to deploy, easy to adopt, and equally easy to abandon. This frictionless approach and lack of commitment creates a number of opportunities for ITAM teams to add value and reduce costs.
Blissfully report that 39% of the average mid-sized company’s SaaS stack changed in 2018. Either we’re using SaaS for short-term use cases and then discarding it (a benefit of subscription licensing) or we’re really bad at selecting the right tool for the job. The days of an organisation committing to a long-term company-wide deployment of a monolithic productivity solution are coming to an end. As IT Asset Managers we may have been adept at managing a 3-year commitment to a package, or potentially making a purchase and then bedding in to sweat an asset for as long as updates were available. With solution turnover like this it brings into question whether it is worth building a relationship with a vendor and making a long-term commitment. As I’ll explore below, there is a clear financial and productivity reason to do so.
Frictionless SaaS is further evidenced by the figures on agreement duplication. In organisations with over 1000 seats Blissfully report that there are on average 13 duplicate subscriptions – for example to Dropbox, or Salesforce, or Slack. This presents a great opportunity for ITAM teams to work with Procurement to consolidate department-level agreements and benefit from economies of scale. SaaS vendors who are dealing with the frictionless nature of the market should be extremely receptive to a consolidation committing a large customer to a long-term deal. In the SaaS world where subscriptions are typically sold monthly, a 3-year deal is a long-term deal.
Whilst not referenced directly in the report, part of the commitment problem is that there are many apps performing similar services. This is particularly evident in the market for storage and web-conferencing. It is often the case that companies will have paid subscriptions for Dropbox, OneDrive, and Box – or have capacity they’re not utilising. For example, Office 365 comes with at least 1TB of storage per subscription, but you may be using, and paying for, an older Dropbox subscription instead. This inability to decide on a common platform impacts productivity, affects security, and causes unnecessary costs. Capability duplication, whilst allowing employees to use the tools they prefer, can result in incompatibilities between packages or further sprawl as employees turn to integration middleware such as Zapier & IFTTT to stitch solutions together.
Average spend per year per employee on SaaS is equivalent to buying that employee a new laptop every year. For larger firms it’s equivalent to a new top-of-the range Macbook Pro & iPhone X. Every year! I’m sure most of us are used to sweating a hardware asset for 3 years or more – and we’d be managing an asset of that value through robust HAM procedures. This remarkable level of spend on intangible SaaS subscriptions requires similar attention.
One of the most insightful sections of Blissfully’s report is the SaaS Graph (see below) for an organisation. This maps employees, apps, and connections and highlights the compliance and security risks of uncontrolled SaaS deployment. Even for a small firm these connections number in the hundreds – with each connection a potential security or privacy breach.
This highlights the importance of tracking SaaS usage but also having robust defences in place – for example having a policy that mandates strong passwords, or that a SaaS app may only be used if it is capable of using two-factor authentication. When discovering and inventorying SaaS applications remember that free subscriptions present as much of a risk as paid subscriptions and ensure that the tools you are using are able to detect these too.
The overarching theme is a lack of control coupled with a willingness to chuck money at the wall and see what sticks. The level of spend represents a fundamental shift in how much we’re willing to pay for convenience and the latest tools. Managing a £300 Office Pro Plus perpetual license for a 5-year lifespan is very different to spending £200 a year on an Office 365 E3 subscription. Is this perhaps a sign of the immaturity of the SaaS market? I’m not so sure – Salesforce is 20 years old – but as the corporate appetite for SaaS continues to grow it is perhaps more of a demand-driven chaos.
As IT Asset Managers we have the opportunity to corral some of these behaviours and add some structure to the SaaS “Wild West”. Starting in April we’ll be delivering a major webinar series on how to get to grips with these issues – controlling spend, maintaining security, and ensuring employees have the right tools to get work done.