Software-as-a-Service has many advantages for organizations. From a management perspective, it takes care of itself. The software updates automatically behind the scenes, as often as needed. Users don’t have to wait months or even years to take advantage of the latest updates. Despite these positives, a recent survey by Blissfully, a SaaS management platform, found that as SaaS usage increases, there are a number of unintended consequences.
You could look at this as a general IT management problem, one we’ve been seeing since SaaS made it possible for users, teams, or departments to bypass their internal managers and get the tools they needed themselves. The beauty of the cloud is that it doesn’t require onerous implementations led by an MSP or internal IT organization. However, that doesn’t mean there isn’t a management component involved, or that MSPs can suddenly abdicate their overall management responsibilities. If anything, there is a greater need for oversight to make sure the management layer has control over cost and usage across an organization.
As an MSP, if you think that you’re seeing more SaaS usage among your clients, it’s not your imagination. In fact, the Blissfully report found that the average company spends $343,000 per year on SaaS, an increase of 78 percent over the previous year. Starting around 2014, the amount of SaaS spending really began to take off, and it’s been on a steady upward trajectory ever since, a trend that is unlikely to change in the coming years.
Impact on companies
The higher SaaS spend correlates to increased usage across companies, regardless of size. While the average employee uses eight SaaS applications, the number of SaaS applications across organizations goes up dramatically as the number of employees increases. The smallest companies average around 40 applications. That number increases to over 200 when you cross the 1000 employee mark.
While this is a positive trend from a pure applications management point of view, it is problematic because there is a lack of centralized oversight across the company. As the Blissfully report put it, “There are many more owners of SaaS, but no birds-eye view of usage or spend, leading to duplicate and orphaned subscriptions,” the report stated.
Of course, that’s precisely the problem that Blissfully (and other companies) are trying to solve. Packaging this data in a way that highlights potential problems of managing SaaS usage across an organization will better equip MSPs and their customers to recognize any issues and keep their SaaS spending under control.
The data in the report has been anonymized and sourced directly from 665 companies of all sizes within Blissfully’s customer base. About two-thirds of Blissfully’s customers are based in the US with the remainder divided up internationally. While it’s important to understand this isn’t necessarily like a scientific survey, it does provide some interesting data points for MSPs to understand issues related to managing SaaS applications across companies of all sizes.
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