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How companies can slash ballooning SaaS costs • TechCrunch


When inflation and General economic uncertainties prompt C-suites to identify cost-cutting areas within their organizations, spending on software as a service (SaaS) becoming a key target.

SaaS is clearly a broad category that includes any centrally hosted software licensed on a subscription basis. But whatever the taste, SaaS is a growing line item in companies’ budgets—a line item that is threatening profits.

According to a recent report report from SaaS purchasing management platform Vertice, SaaS valuation inflation is growing four times faster than global inflation. Additionally, the survey shows that customers are putting 53% more into licensing than five years ago, $1 in every $8 businesses spend today on SaaS products.

“Most organizations have significantly grown their software vendor portfolio in the last 10 years…no wonder that vendor portfolio has more than doubled.” Stephen White, director-senior analyst, Gartner

That sounds like a huge pile of recurring cash. But it’s not surprising when you consider the average organization currently uses around 110 SaaS solutions, according to BetterCloudwith large companies using the 447 estimate.

Management has gone down sharply: Fifty-seven percent of IT teams told Workato said in a 2022 poll that it is under pressure to reduce spending on SaaS — a task easier said than done in organizations where teams and even entire departments rely on SaaS suites to successfully get things done. their job.

To understand the SaaS landscape in a time of cutting and cost reduction, we spoke with analysts at Gartner and PwC who study trends in the software procurement market.

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