SaaS has seen tremendous growth in the past few years, and this growth is only expected to continue.
“We’re still in the midst of a SaaS explosion,” Daniel Stevenson from Blissfully told the crowd at SaaS Connect 2019.
Just as with any industry, there are trends that professionals should be keeping an eye on. Here are some of the things to be aware of.
How much are businesses actually using SaaS applications?
SaaS platforms are popular among companies of all sizes:
- The average company that works with Blissfully spends about $343,000 on SaaS applications.
- It’s distributed well across the organization, not just concentrated in one silo.
- The average applications are around 7.5 to 10.
- This number grows with mid-market companies, as specialization starts to become relevant.
In addition to this, free applications are becoming more prevalent. In fact, Daniel reports seeing a ratio of 3:1 free applications to paid subscriptions.
How hard are SaaS applications to manage?
The average 500-person organization uses about 123 SaaS applications. Managing all of that technology is a real challenge because 123 applications can represent more than 20,700 relationships or points of connection.
And all of these relationships have ramifications for companies when it comes to security. Consider what people and responsibilities all are connected via a single SaaS platform:
- Access credentials
- Data sharing
- Billing and recipients
- License renewals
- Contract owners
The variety of connections can make it all the more difficult for companies to manage these applications on their own, as each type of connection has its own needs.
How does company size factor into SaaS complexity?
Company size plays a big part in how businesses deal with SaaS applications and what sort of help they need.
- 1–50 employees. Businesses of this size spend about $21,000 on SaaS applications. At 15 employees, that’s about $1,300 to 1,400 per employee. This is fairly manageable, and companies of this size don’t necessarily have issues when it comes to spending on SaaS applications. They can be given the freedom to choose what they want.
- 51–100 employees. Companies of this size generally spend far more per employee because there may be three times the number of building owners in this scenario. So, gathering information about subscriptions, when licences need renewals and more gets far more difficult.
- 101–200 employees. Things get even more interesting here, as there may be 20 people in the organization being given billing responsibility for these SaaS applications. It makes keeping everything running smoothly that much harder.
- 201–500 employees. This is where things begin to get inefficient, and outside help is often needed. Companies like these often don’t understand how much they are spending on a per-team and per-employee basis.
That’s why managing SaaS subscriptions and vendors is key for larger companies. That kind of oversight ensures no money is spent unnecessarily.