Organizations can anticipate to spend nearly $10,000 per worker on software program as a service in 2023, in accordance with a brand new examine by SaaS administration firm Productiv. The year-over-year evaluation from 2021 to 2023 surveyed 100 million SaaS licenses utilizing Productiv’s personal companies, primarily inside the US.
Which SaaS apps do organizations use essentially the most?
The common division now makes use of a mean of 87 SaaS apps, a progress of 27% between 2022 and 2023. The 5 hottest SaaS apps total are:
- Lucidchart
- Salesforce
- Atlassian Cloud
- DocuSign
This listing has remained principally the identical since 2021, with the 5 apps listed above swapping locations however remaining within the prime 5. Zendesk is one other common app amongst buyer success groups, whereas Figma seems within the prime 5 for engineering groups.
Engineering groups have a tendency to make use of essentially the most SaaS apps, with a mean of 108 apps. The IT and safety groups noticed essentially the most progress in SaaS app utilization between 2022 and 2023, with a rise of 33% principally in level answer and ROI instruments.
SEE: Uncover how software program as a service impacts your corporation.
SaaS spending rises whilst governance improves
SaaS adoption continues to rise regularly. The common SaaS portfolio grew by 32% over the previous two years.
When damaged down by the scale of the group, the information exhibits that:
- Small and medium-sized enterprise SaaS portfolios grew by 5%.
- Mid-market portfolios elevated by 41%.
- Enterprise portfolios elevated by 49%.
“Our knowledge show the trail to rapid motion for CFOs is to higher establish and consolidate SaaS apps, given the associated fee discount pressures presently dealing with each firm,” stated Jody Shapiro, chief govt officer and co-founder of Productiv, in a press launch. “Shopping for and renewing software program by no means stops, however the very best procurement practices require collaborative selections utilizing knowledge throughout IT, procurement, finance and purposeful management on what software program to buy, renew, downsize and consolidate.”
SEE: Obtain this customizable software program procurement coverage from TechRepublic Premium
Some SaaS hides within the shadows
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Shadow SaaS are apps bought and utilized by staff outdoors of the approval and data of the IT staff. IT might not understand how a lot these apps price, how they’re used or to what extent they’re used.
The most typical shadow SaaS apps are Evernote, Coursera and Canva.
The quantity of shadow SaaS in organizations decreased between 2022 and 2023, displaying that organizations have develop into extra conscious of the bloat and extra successfully took governance actions to scale back sprawl. Nonetheless, shadow SaaS should still account for greater than half (51%) of the functions within the common SaaS portfolio.
Productiv detected shadow SaaS apps utilizing Google Social Login and worker expense experiences.
Organizations slowly reduce down on unused apps
One other space by which organizations can enhance effectivity when it comes to what SaaS they use is lowering unused apps. Of the surveyed organizations, 53% of SaaS licenses went unused. License utilization elevated barely (2%) from 2022 to 2023. Firms utilizing extra apps per class and rising license utilization on the similar time recommend organizations are enhancing their rationalization and consolidation efforts, Productiv stated.
The apps with the bottom share of license utilization are Greenhouse, Asana and Jira. Productiv famous that nobody sort of app dominated the listing of unused licenses.
ChatGPT makes waves amongst shadow SaaS
The stylish AI app ChatGPT might depend as shadow SaaS if staff use the free or subscriber tiers with out IT being concerned.
“Given our report reveals widespread shadow use of ChatGPT, it’s time for corporations to determine the best way to foster innovation utilizing ChatGPT with out safety dangers,” stated Aashish Chandarana, chief info officer of Productiv, in a press launch.
Within the circumstances Productiv discovered, staff most frequently use ChatGPT for writing emails and advertising and marketing content material, summarizing assembly notes, researching points, writing code and discovering coding bugs. The advertising and marketing, engineering and product departments use ChatGPT essentially the most.
Adjustments in SaaS spending: Contract lengths shorten
As extra corporations transfer to distant work, many discover that shorter (one-year) contracts are preferable as a result of they permit for extra flexibility. Lowering contract lifetime can be a method for organizations to scale back overhead prices.
One-year contracts accounted for 79% of all contracts in 2020 and 85% of all contracts in 2022. Three-year and longer contracts declined essentially the most year-over-year.
In 2023, SaaS spend per worker averaged $9,643. Giant companies spent a mean of $7,492 per worker in 2022, whereas medium-sized companies spent $10,045 and small and medium-sized companies spent $11,196. The big companies spent much less as a result of they acquired quantity reductions and enterprise-wide licensing agreements, in addition to higher effectivity of scale with consumption-based apps, Productiv stated.
“To keep away from shadow IT, organizations have to develop acceptable SaaS governance insurance policies that assist groups take their free and bought apps out of the shadows and make sure the proper stage of company insurance policies for procurement, safety and compliance,” Chandarana stated.
SEE: Obtain this customizable shadow IT coverage from TechRepublic Premium
In terms of consolidating SaaS, organizations ought to make sure that the IT, finance and procurement groups are working from the identical knowledge to forestall shadow SaaS from creeping in, Chandarana stated.
“Having a granular understanding of what software program you personal, how it’s getting used right down to the staff and have stage will allow you to make sensible selections that drive worth out of your software program stack and make a significant contribution to productiveness, monetary effectivity and enterprise progress,” he stated.