Zylo, an enterprise SaaS Management provider, has released its 2023 SaaS Management Index Report to help businesses understand their tech stack, reduce SaaS waste and uncover budget to avoid layoffs. The report, based on 102,000 workers in US tech companies, highlighted that, on average, 44% of businesses' SaaS licenses were wasted or underutilized. Despite this, SaaS investments continued to grow, with software spend predicted to grow to 42% of total tech spend by 2027, up from 34% in 2022. The report found that businesses wasted $17m in unused SaaS licenses annually and that companies with over 10,000 employees spend over $224m on SaaS but only utilize 50% of their licenses.
The report identified cutting redundant SaaS applications as a prime opportunity to reduce spend before slashing headcount, with the top three areas of redundancy being online training classes, team collaboration and project management. Zylo co-founder and CEO, Eric Christopher, noted that software optimization is "your greatest missed opportunity" for companies looking to reduce costs and navigate budget constraints. He urged companies to understand their tech stack, reduce SaaS waste, and uncover budget to avoid layoffs.
According to Ben Pippenger, co-founder and Chief Business Development and Strategy Officer at Zylo, as the SaaS space grows, companies need to manage their existing tool stack before purchasing new applications. Removing redundant functions is an effective first step to help organizations take control of their SaaS portfolios. The report also highlighted the fact that, on average, companies added six new apps to their tech stack every month, and one in every six employees expenses SaaS applications.