3 ways to trim your SaaS costs
Software-as-a-Service (SaaS) has revolutionized the way businesses operate, providing convenient access to a wide range of applications and tools. However, without careful management, SaaS spending can quickly spiral out of control, leading to unnecessary costs.
As explained by Vertice, SaaS spend management is essential if you’re going to maximize the return on investment taken from each app in your portfolio. This typically involves real-time app discovery, portfolio management strategies, and software negotiation tactics.
Here, we explore three key strategies to help you reduce SaaS spend, including gaining better visibility of your SaaS spending, streamlining your SaaS portfolio, and negotiating savings across your stack. By implementing these tips, you can optimize your SaaS expenditures while maintaining the necessary tools for your business.
1. Gain better visibility of SaaS spending
Begin by conducting a comprehensive audit, taking stock of all your SaaS subscriptions and evaluating their usage and necessity. This can help to identify redundant or underutilized services that can be canceled or replaced with more cost-effective alternatives.
It’s a good idea to establish a centralized management system or use a SaaS management platform to track and manage all subscriptions within your organization. Encourage employees to provide feedback on the usefulness of specific tools too, as this visibility provides you with a clear overview of what software is being used, who is using it, and how much it costs.
Once you have a clearer idea of which teams are using which software (and how), consider consolidating licenses where duplication occurs and downgrading to lower-cost plans when possible.
2. Streamline your SaaS portfolio
Identify your core business needs and focus on investing in SaaS applications that directly support those needs. Avoid subscribing to overlapping tools or services that provide similar functionalities. Streamlining your portfolio not only reduces costs but also simplifies user experience and enhances productivity.
It’s a good idea to look for SaaS providers that offer comprehensive suites or integrated platforms rather than relying on multiple standalone applications. Integrated solutions can provide cost savings through bundled pricing and reduce the complexity of managing multiple subscriptions. Evaluate the compatibility and scalability of these integrated suites to ensure they align with your long-term goals.
3. Negotiate savings across your stack
Consider the purchasing power within your organization. If you have multiple teams or departments managing their own SaaS subscriptions, you may be inadvertently spending more than you need to on the same software (particularly if different teams use the same software for different purposes).
Significant savings could be made if purchasing decisions were centralized. Leverage the collective usage of your organization to strengthen your position during contract discussions, as you may be able to negotiate better terms, volume discounts, or enterprise agreements with SaaS vendors.
There are other ways of exploring potential discounts and cost-saving options too. Demonstrate your commitment to a SaaS vendor as a long-term customer and inquire about loyalty programs or incentives they may offer. Be prepared to discuss your specific needs and usage patterns, as well as your willingness to switch vendors if more favorable pricing or terms are available.
Consider options such as annual commitments or prepaid plans that often come with discounted pricing. Additionally, explore alternatives like usage-based pricing or pay-as-you-go models for applications that are sporadically used, as they can offer significant cost savings over fixed monthly subscriptions.
And finally, make sure to keep an eye on contract renewals. When approaching the end of a contract or subscription term, be proactive in reviewing your options. Research competitive offerings, compare prices, and negotiate with your existing vendor for better terms. Vendors often value customer retention and may be willing to provide discounts or incentives to retain your business.
