How to Manage SaaS Spend During a Crisis

Over the past decade software as a service, more commonly known as SaaS, changed the way we work, and now the need for a remote workforce is doing the same thing.

It’s hard to believe it’s been 20 years since Salesforce’s famous “The End of Software” marketing campaign, which challenged incumbent, on-premises software and signaled the rise of SaaS as a business model. Fast forward to the present day, where 73% of organizations indicated nearly all their apps will be SaaS by 2021, which will be here before you know it. 

At G2, we have seen a substantial growth in software markets—as well as software products available—over the past few years. Software categories on G2 have grown from 728 categories in March 2018 to 1,426 categories in March 2020. Additionally, G2 had 30,428 software products represented in March 2018; as of March 2020, the total is close to 79,000 software products. 

Given the unprecedented global challenges we are facing today due to the COVID-19 health crisis, we are having to evolve the way we work, and SaaS plays a major role in the ability of employees to work remotely. SaaS spend management can help companies manage costs, and be smarter about how their budget is spent during this uncertain time.  

G2 recently conducted a survey* where we asked 676 business professionals about their experiences working during the current COVID-19 crisis. We asked respondents if their usage of business software applications has increased, decreased, or stayed the same: 56% stated that their use of business applications has increased. We also found that 47% of respondents expect their employer's software spending to increase in response to the COVID-19 outbreak.

Source: G2 Remote Work Survey*  - “How do you expect your employer's software spending will change in response to the COVID-19 outbreak?”

Now more than ever as unemployment rises during the coronavirus economic freeze, it is important for businesses to manage expenses—and that includes software costs. More than $40 billion is spent on unused SaaS tools each year, and this is where SaaS spend management can help. During this crisis, it’s imperative for businesses to ensure they aren’t wasting money on unused tools and licenses.

Due to the nature of SaaS, a company’s IT spend is now distributed across an entire organization, which leads to decentralized decision-making for the purchase of SaaS applications. 71% of organizations have an orphaned SaaS subscription, usually caused by the departure of the person who originally purchased the app on behalf of the organization. In addition, while companies of 200–500 employees typically use 123 apps, they would also have an average of 2,700 app-to-person connections. These statistics truly underscore the importance of tracking SaaS application utilization and spend.

In the wake of COVID-19, many organizations have stepped up and started to take action to assist businesses in a variety of ways, including the ability to stay connected, the opportunity to save money, and many others. Salesforce is offering its Social Studio for social community engagement for free for 90 days, PandaDoc is offering a free e-signature document signing solution, and Zoho is providing its Remotely offering for free to help businesses with communication and collaboration. 

G2 is also offering a free forever G2 Track subscription to ensure businesses aren’t wasting money on unused software tools and licenses. Businesses can utilize G2 Track to manage costs by uncovering overlapping or underused software subscriptions and licenses that create unnecessary costs. 

We understand that the current situation is creating, and will continue to create, challenges for organizations, and G2 wants to be able to help where we can. G2 Track can help companies manage costs and be smarter about their spend during this difficult time.  

*Survey Methodology: Data collected from 676 respondents from March 24–27, 2020. Individuals surveyed are businesspeople who are currently working remotely full-time, 88% of whom are working from home directly in response to the COVID-19 pandemic. Respondents reside in North America, APAC, or EMEA, come from all industries and roles, and comprise a mix of G2 users and outside respondents.