Unlock the potential of your cloud investments and reduce costs with the expertise of Stilogic. Discover how we can assist your organization in effectively managing the SaaS lifecycle.
The Future of Digital Business
The software-as-a-service (SaaS) industry plays a vital role in digital transformation strategies and continues to soar to new heights. As the cloud economy expands, businesses are increasingly adopting SaaS and subscription-based models to deliver their core services.
According to Verified Market Research (VMR), the SaaS Management Platform market was valued at $113.82 billion in 2020 and is projected to reach $716.52 billion by 2028, with a remarkable compound annual growth rate (CAGR) of 27.5% from 2021 to 2028. This rapid growth necessitates organizations to find solutions that can effectively reduce unnecessary or wasteful spending on SaaS.
The SaaS industry has gained customer trust with its cloud-based data security and system availability. Additionally, the revenue generated by cloud services has attracted investor attention, giving rise to a new SaaS economy. Within this ecosystem, businesses are developing new applications and leveraging the best available SaaS applications to build business-specific solutions. However, the payment models of SaaS applications can pose challenges. Unlike traditional proprietary software models, SaaS platforms rely on recurring monthly or yearly payments, which can fluctuate based on the number of users accessing the platform.
Striking the Right Balance: Cost Reduction and ROI
Balancing operational costs while maintaining a healthy return on investment (ROI) can be a challenging task. However, according to a study by Forrester, companies are planning substantial investments in SaaS. So, how can organizations achieve the optimal balance between profitability and reducing the operational cost of SaaS to maximize their cloud investments?
SaaS Operations: Opportunities and Challenges
Managing and operating cloud assets differ significantly from traditional on-premises operations, requiring a deep understanding of effective practices and the ability to address any issues that arise.
The rise of remote working models and the ease of SaaS adoption can lead to SaaS sprawl within organizations. It is crucial for businesses to make strategic decisions regarding SaaS as part of their core digital business transformation to remain competitive. Organizations often use multiple solutions to cater to diverse departmental needs. However, these SaaS solutions often share features that can be leveraged for other processes without the need to purchase additional solutions. The use of shadow IT and unsanctioned applications for these purposes can add extra burden to operational expenses.
Having visibility and control over the authorization of SaaS applications enables organizations to apply the right security policies and controls. Uncontrolled growth of SaaS solutions can lead to significant governance issues within the ecosystem. Managing a vast amount of data across different parties becomes challenging without a designated super admin responsible for user access and control.
Elements of SaaS Operations and Management Lifecycle
Effective SaaS operations depend on several critical factors, including:
- SaaS Discovery: Identifying all SaaS applications currently in use within the organization, regardless of whether they were procured through IT or individual departments.
- SaaS Analysis: Evaluating the usage and cost of each SaaS application to determine their value and identify any associated risks or security concerns.
- SaaS Control: Implementing policies and procedures to manage the use of SaaS applications, including user access controls, data security, and regulatory compliance.
- SaaS Optimization: Streamlining the use of SaaS applications to reduce costs, enhance efficiency, and improve performance, such as through license optimization and vendor consolidation.
- SaaS Governance: Establishing guidelines, policies, and procedures to govern the use of SaaS applications, ensuring regulatory compliance, and monitoring adherence to guidelines.
Cloud Operating Methodology provides a high-level framework for effectively managing cloud/SaaS applications across the organization. It offers a blueprint to organize capabilities that deliver value to users through the systematic application of SaaS/cloud services.
However, challenges arise when numerous SaaS services are used within an organization. Visibility into SaaS spending and understanding the application landscape and operational dependencies across multiple teams can become difficult. Using multiple SaaS services increases touchpoints and user accessibility, potentially compromising security. This can lead to increased compliance spending and challenges in managing the organization’s reputation.
Considering these factors, having a robust framework that optimizes the operational challenges of a cloud-based SaaS ecosystem can be immensely beneficial. Analyzing SaaS discovery and utilization helps identify a roadmap for adoption, including the following stages:
- Discovery: Identify cloud/SaaS applications and build a comprehensive catalog by department and function.
- Analyze: Evaluate applications based on usage, integration points, security, and compliance.
- Automate: Streamline integration points and automate SaaS testing.
- Control: Gain insights into SaaS usage, secure SaaS operations, and manage user access.
- Optimize: Optimize SaaS users, access, licenses, and subscription costs.
Once the operational requirements and lifecycle management are established, the question becomes how to leverage them to drive business transformation and maximize SaaS ROI. An intelligent SaaS management platform can be a valuable tool in this endeavor.
Maximize Your Cloud Investments
Organizations lacking standardized governance for multiple SaaS applications may face negative impacts on SaaS growth. By understanding the usage patterns of SaaS tools, organizations can optimize their ROI.
Implementing discipline in SaaS usage and management helps companies procure only what they need and pay for what they use, minimizing recurring and wasteful expenditures on SaaS tools. This approach also enhances the security and compliance of the ecosystem, adding value to business operations. If you are seeking to address the challenge of managing your SaaS budget, please contact us to learn how Stilogic can assist your company in maximizing your cloud investments.