Where Does Cost Get Wasted on SaaS? Insights for Businesses

Wasted SaaS spend is common for businesses that are using more than 50 or 100 SaaS and AI apps. With more number of apps, tracking utilization and spending becomes increasingly challenging.

Where exactly do spend leakages occur? And how can businesses (of all sizes and industries) curb SaaS waste? Learn in this brief yet insightful guide.

Key Takeaways:

  • It is common for businesses to face SaaS waste in terms of license costs and renewals.
  • Inactive licenses, underusage of apps, hidden subscriptions are some of the core areas where SaaS cost waste occurs.
  • CloudFuze Manage helps organizations identify SaaS waste areas and recommend actions to eliminate wasteful spend.

Unused Licenses

One of the most common areas where SaaS waste occurs is unused licenses. In many companies, unused licenses can contribute to more than 20% to 30% of SaaS spend waste. When the licenses your organization has bought are only partially used, full value from the license investments cannot be gained.

To identify unused licenses, you can use an advanced SaaS and AI app management and governance tool like CloudFuze Manage. With CloudFuze Manage’s license intelligence feature, you can:

  • Track license usage
  • Check cost per user
  • View potential savings
  • Check the frequency of license renewals (monthly vs annually)

Underusage of Apps

In many organizations, even when licenses are assigned, users do not fully use the apps. This way, the organization does not gain maximum value from their license investments. Therefore, it is important to check usage patterns in each app to identify the apps that have the highest underusage.

With CloudFuze Manage, you can check user activity in each SaaS and AI app. Our tool’s Cost Breakdown report also shows the potential SaaS costs you can save from optimizing license allocation and apps usage.

User Activity in SaaS Apps

Using Overlapping Apps

Using overlapping apps (similar apps with similar functionalities) is also one of the main causes of significant SaaS waste in terms of license purchases and renewals. Many organizations end up buying SaaS apps and AI tools that server similar functions which makes them redundant and leads to increased SaaS cost waste.

The key is to carefully review each app before purchasing; check if a similar app already exists in your company’s digital stack. For example, if you already have a project management app, yet users are demanding another project management app, it is best to check and understand if the existing app can meet the requirements.

Hidden Subscriptions of Shadow IT and AI Apps

Lastly, hidden subscriptions of apps that haven’t been approved by the IT team are silent budget killers that lead to significant wastage of SaaS spend. Also known as shadow IT, unauthorized apps (apps that users sign up for without the IT team’s knowledge or visibility) remain hidden and are hard to track.

To identify and control hidden apps, it is best to use a tool with dedicated shadow IT and unauthorized AI app usage detection functionalities like CloudFuze Manage. Using the tool, you can spot all hidden apps and uncover spend leakages.

Shadow IT apps

Curb SaaS Waste with CloudFuze Manage Today

CloudFuze Manage gives you instant visibility in the areas where your organization is spending unnecessarily. Whether it is app underusage or hidden app subscriptions, you can uncover every layer and achieve significant cost savings.

See how CloudFuze Manage can help you save costs through a live demo. Contact us today!

Interested in more deep details? Watch on webinar on managing 100+ SaaS and AI apps without facing SaaS cost waste or security and compliance issues:

Frequently Asked Questions

1. What are the common areas where cost gets wasted on SaaS solutions?

Inactive licenses, app underusage, and using similar apps are some of the areas where cost gets wasted on SaaS and AI apps. Having full visibility over these areas helps eliminate SaaS waste.

2. What strategies can organizations implement to minimize SaaS cost wastage?

Ensuring all licenses are allocated is one of the best ways to eliminate SaaS cost wastage in any organization. Other steps like identifying hidden subscriptions of shadow IT apps and curbing redundant app license purchases are also helpful in lowering and eliminating SaaS cost waste.

3. What companies offer services to optimize SaaS spend in enterprises?

CloudFuze helps enterprises optimize their SaaS spend through CloudFuze Manage, a 360° SaaS and AI app management and governance platform. The tool provides instant and complete visibility into the entire SaaS and AI app stack and helps IT and finance teams spot cost-saving areas.

Take Control of Your SaaS Stack Today

Use CloudFuze Manage to securely manage all your SaaS apps. Manage users and licenses, optimize spending, cut unnecessary costs, identify and eliminate shadow IT, ensure compliance, and do a whole lot more!