A new role is emerging in the IT industry â€” the SaaS manager. In this article, Eric Christopher, CEO, Zylo, discusses in detail the reason for the emergence of this role and its importance.
There’s a new title emerging within progressive IT organizations â€“ the Software-as-a-Service (SaaS) Manager.Â
As organizations rapidly invest in SaaS to fuel business growth, we’re seeing this new profile emerge as organizations quickly realize that SaaS must be managed differently than traditional software.Â
SaaS Is Growing, Fueled by the Events of 2020
SaaS is a relatively new concept, but it’s one that’s quickly caught on. According to Bessemer Venture Partners’ State of the Cloud 2020 reportOpens a new window , the entire market capitalization of the public cloud surpassed $1 trillion last February, compared to less than $40 billion just ten years ago.
Then, the COVID-19 pandemic hit in 2020, forcing businesses to quickly undergo significant digital transformation. Early last year, companies scrambled to provision employees with the tools they needed to stay productive and connected while working remotely. And as a result, SaaS spending grew, despite hefty budget cuts in other areas. In fact, during the initial shift to remote work (February to April 2020), SaaS spending increased 26% year-over-year among Zylo customers.Â
This initial tool-up is now a year in the past. As more organizations explore the idea of hybrid and continued remote strategies, SaaS growth doesn’t show any signs of slowing. In fact, Gartner predicts global SaaS spending will reach $140 billion by 2022 â€” a 16% increase from 2020, and Bessemer Venture Partners anticipates that the cloud will become the dominant delivery model for all software within the next three years.Â
SaaS Has Fundamentally Changed the Way Software Is Acquired and Used
There are countless ways in which SaaS differs from traditional software. But one of the key differences is how SaaS is acquired.Â
While on-premise software is typically purchased and managed by the IT team, SaaS is often purchased throughout an organization. Research tells us that combined, business units and individuals control 58% of SaaS spending and a whopping 75% of application quantity. Oftentimes, acquiring a new SaaS application is as simple as inputting a credit card number.
While this ease of acquisition can be beneficial, it’s also problematic. Expensed applications often fly under the radar, which explains why the average organization underestimates how many SaaS applications it has by two to three times. And it’s impossible to manage what you don’t know exists!
Unmanaged SaaS growth creates unnecessary costs and risks for an organization. For starters, most companies have multiple applications with redundant capabilities or even instances of the exact same application purchased multiple times. What’s more, it’s common for an organization to be paying for licenses that aren’t even being used.Â
On-premise Software Management Is Ineffective for SaaS
To reduce the costs and risk of SaaS growth, it’s imperative to start managing SaaS. But because SaaS isn’t purchased or used like traditional software, it can’t be managed like it is. So, who’s the right person to manage SaaS?Â Â Â
In some organizations, SaaS management falls under the purview of software asset management (SAM) practitioners. But these teams are generally focused on on-premise, IT-purchased software, with an emphasis on centrally managed provisioning of licenses and users. SaaS is a completely different beast with applications purchased throughout the organization, so this isn’t the best approach.Â
In other organizations, someone in IT or procurement is tasked with managing SaaS using labor-intensive spreadsheets and manual efforts at identifying savings opportunities on top of their full-time job.Â
Worse yet, some organizations don’t proactively manage SaaS at all. If an employee or team wants a new application, they simply put it on their credit card and expense it. These businesses lack visibility into their full SaaS inventory, making it nearly impossible to measure and optimize adoption, reduce risk and identify cost savings opportunities.
None of these approaches are ideal or effective.
Now’s the Time to Hire a SaaS Manager
As SaaS continues to grow, so too will the number of organizations with dedicated SaaS managers. These specialists will lead the charge in creating and executing effective SaaS management programs that address the nuances of this type of software and establishing the KPIs that’ll be used to measure success.Â
The first priority of these SaaS managers will be to discover and track all SaaS within the organization, from enterprise software purchased by the IT team to free trials that auto-renew on employees’ credit cards. After gaining visibility, SaaS managers will be better positioned to identify opportunities to reduce redundant applications, consolidate subscriptions, and rightsize licenses. And, they’ll also collaborate with stakeholders, providing them with the information they need to make informed renewal decisions.Â
SaaS will only continue to grow, and ineffective management leads to unnecessary costs and risks. If your organization is investing in SaaS, now’s the time to hire a SaaS manager.Â