How to avoid financial waste in SaaS?

By Fernando Arditti.

Software as a Service (SaaS) has become a valuable tool for many companies’ operations. Offers efficiency, flexibility and scalability. However, improper use of SaaS can lead to significant financial waste.

According to a recent report by Vertice, annual SaaS expenses can range from $500,000 for companies with 100 to 399 employees to $4.3 million for companies with more than 2,000 employees.

British company Vertice, a startup that specializes in managing enterprise SaaS portfolios, points out that after payroll costs, spending on software is the second largest expense for many companies. Gartner predicts that by 2024, SaaS revenue is expected to grow to $244.20 billion.

Understand waste in SaaS

Companies often look for multiple SaaS tools without a clear integration or usage strategy. This leads to ongoing payments for underutilized or even forgotten vehicles. Additionally, not actively monitoring these contracts may result in unnecessary automatic renewals or the use of more expensive plans.

Therefore, we see that businesses need to take a more strategic approach to avoid this scenario and optimize spend. With benefits such as cloud scalability, flexibility, and agility, software as a service is today’s dominant application delivery mechanism.

Today, many SaaS companies, whether B2B or B2C, have turned to customer identity and access management (CIAM) solutions.

This allows developers to focus on their core products while CIAM platforms are updated with the latest privacy and consensus management features defined by the government, such as those required by the General Data Protection Law in Brazil.

Another main reason for waste in SaaS is the lack of usage tracking. For this reason, It is important to look for solutions with advanced monitoring and analysis capabilitiesIt allows companies to see exactly how their teams are using the tools, which helps identify underutilized subscriptions and allows them to be adjusted or canceled when necessary.

We’re talking flexibility, scalability and constant updates here. As businesses grow, they can easily scale their subscriptions and ensure they always only pay for what they actually need.

Currently, it is worth emphasizing that constant support and regular updates enable companies to use the latest and most efficient versions of tools, maximizing their value and minimizing the need to invest in additional solutions.

For example, recently WSO2 released the Identity Server 7.0 update, the latest version of its open source identity and access management (IAM) software. In other words, we see that the key to success lies here. providing developers with an incredible experience that maximizes their performance productivity and flexibilityallowing greater adaptation to the needs of businesses, customers and partners.

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Fernando Arditti is vice president and general manager of WSO2 in Latin America.