2023 SaaS Management Index Report finds reducing application waste could impact massive layoffs
Zylo, the enterprise leader in SaaS Management, today releases its 2023 SaaS Management Index Report. The report aims to help businesses understand their tech stack and relieve budget constraints associated with underutilized SaaS applications, redundant functionality and inefficient purchasing.
More than 102,000 workers in U.S.-based tech companies have been laid off in mass job cuts so far in 2023. While a round of layoffs is one way to reduce short-term expenses, it does not solve the need to stabilize organizations in the long term. Software spend is a prime place to start.
Zylo’s “SaaS Management Index” report found that, on average, 44% of businesses’ SaaS licenses are wasted or underutilized. Yet, SaaS investments continue to grow. In fact, Forrester predicts that software spend will grow to 42% of total tech spend by 2027, up from 34% in 2022.
Within the report are several highlighted opportunities for smart consolidation in tech stack spending amid economic uncertainty. Key findings include:
- The average organization wastes $17M in unused SaaS licenses every year
- Enterprise organizations (10,000 employees+) spend over $224M on SaaS but only utilize 50% of their SaaS licenses
- 70% of SaaS application contracts were renewed in 2023, despite being underutilized
- The average organization adds six new apps to its tech stack every month
- About one in every six employees expenses SaaS applications
“For companies looking to reduce costs and navigate budget constraints, software optimization is your greatest missed opportunity,” says Zylo co-founder and CEO Eric Christopher. “Our report shines a spotlight on software optimization and smart consolidation so organizations can understand their tech stack, reduce SaaS waste, and uncover budget to curb the need for layoffs.”
The report also identified cutting redundant SaaS applications as a prime opportunity to reduce spend before slashing headcount. The top three areas of redundancy to target are online training classes, team collaboration, and project management. Collectively, these equate to over 44 applications that overlap in functionality and drastically impact SaaS spend.
“As the SaaS space grows, it is paramount that companies manage their existing tool stack before purchasing new SaaS applications,” says Ben Pippenger, co-founder and Chief Business Development and Strategy Officer at Zylo. “Removing redundant functions is a great first step to help organizations to take control of their SaaS portfolios.”
To review the full 2023 SaaS Management Index report or for more information on Zylo, visit zylo.com/reports/2023-saas-management-index.
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