Key Takeaways on SaaS Management - Gartner Market Guide

The 2022 Market Guide for SaaS Management Platforms (SMPs) from Gartner provides an in-depth understanding of the SaaS Management space and the outlook of this rapidly growing domain. The following are some of Gartner report’s key takeaways.

Key Takeaways:

• Companies are spending 15-20% more on SaaS every year, and Gartner expects this trend to steadily grow. On average, companies use over 125 different SaaS applications, which costs $1,040 per employee per year.
• The market remains rather fragmented. Many people mistake SMPs for software asset management (SAM) and security tools for SaaS, such as cloud access security broker (CASB), security service edge (SSE), and SaaS security posture management (SSPM).
• While the use of SaaS is on the rise, procuring it can be risky and expensive if not properly implemented and monitored. According to Gartner, around 25% of SaaS licenses are not regularly used by employees. SMP vendors even claim that up to 50% of these licenses are not entirely maximized.
• The Gartner SMP Market Guide highlights the importance of investing in SMPs to manage the complexity of SaaS environments and gain better visibility and control over SaaS spend.
• According to the report, companies that don't manage SaaS life cycles centrally will be five times more likely to experience a cyber incident or data loss due to misconfiguration.
• Companies that do not secure central visibility and coordination of their SaaS life cycles are also likely to overspend on SaaS by 25% due to unnecessary or incorrect licenses and overlapping tools.
• By 2027, 4 out of 10 companies will adopt a centralized management system to handle their SaaS subscriptions, an increase from under 25% in 2022. The demand and budget for SaaS management will continue to grow as companies recognize the magnitude of unmanaged SaaS costs. SMPs will be widely used to monitor and enforce SaaS adoption and accurately measure return on SaaS investments.
• SMPs will be used for automating employee onboarding and offboarding practices as well as proactively managing SaaS renewals and costs.

The Capabilities and Benefits of SMPs

Gartner has explored in detail the capabilities and benefits of Subscription Management Platforms. Streamlining an entire subscription management process is made possible with the core functions and features of an SMP.

SMP Capabilities

SMPs primarily enable the following functions:

1. Discover –identify authorized and unauthorized SaaS use and costs.
2. Manage – simplify the management of SaaS applications by centralizing configuration and policy management within a single dashboard.
3. Automate – automate administration with templates, workflow engine, and Artificial Intelligence (AI)-based actions.
4. Optimize – surface analysis, insights, alerts, and automation to optimize SaaS licenses and costs.
5. Protect – provide insights and alerts to optimize license and cost and safeguard companies’ identities and data by ensuring compliance with corporate or regulatory standards.
6. Govern – Report, alert, and measure SaaS availability and the efficiency of integrations with SaaS apps and other IT tools
7. Enable – offer an employee-friendly application catalog for easy SaaS requests and help drive adoption and maximize Return-on-Investment ROI with thorough analysis, insights, and alerts

SMP Benefits

Compared to other adjacent market tools, Gartner pointed out that an SMP offers numerous distinct advantages, and it can empower leaders to better take charge of their IT processes and be on top of their game.

1. Better visibility and control over SaaS.

Being fully aware of everything that is going on in your SaaS management department enables you to make more informed decisions and make proactive initiatives to optimize your SaaS procurement and regulate SaaS costs before it goes out of hand.

2. Increased ROI by promoting adoption and optimizing entitlements.

As highlighted in Gartner’s report, 25-50% of provisioned SaaS licenses are not maximized by employees. Monitoring SaaS adoption across your entire organization is crucial to ensure that the standard processes are enforced and your SaaS investment will generate ROI and the best outcomes.

3. Improved management and decision-making related to SaaS contracts, renewals, and costs.

Because ownership is not centralized, and there are too many teams being involved in the SaaS lifecycle, decision-making becomes more complicated and time-consuming than necessary and you’re running the risk of keeping your SaaS management processes inefficiently handled. IT leaders can do better with qualified SMPs like Talisman at their disposal.

4. Reduced unauthorized usage through curated store experience.

Shadow IT or the unauthorized use of SaaS applications can pose more risks than you imagine. From compliance issues to data loss to cybersecurity risks, your IT infrastructure can get compromised if this loophole is not managed accordingly. An SMP can offer IT departments an efficient solution for avoiding shadow IT and other system inefficiencies.

5. Simplified onboarding of new employees and SaaS apps and improved off-boarding workflows.

With SMPs like Talisman, onboarding and offboarding are made more efficient as IT leaders or staff can easily provision and deprovision access to SaaS. With this software provisioning capability and full visibility in terms of SaaS management, automated onboarding and employee offboarding become more effortless.

6. Decreased IT overhead through automation.

Instead of employing more people for SaaS management, an SMP can independently oversee SaaS subscription management. Gartner estimates that SMP costs are just equal to the salary of one full-time employee, which is worth the investment given that a single employee cannot cover the full scope of SaaS spend management and cannot streamline a SaaS life cycle like an SMP can.

7. Enhanced collaboration among teams involved in the SaaS life cycle.

With automation and access to data and insights, collaboration is made better and more efficient. No more bottlenecks, no more confusion, and no more SaaS management inefficiencies.

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Market Direction and the Growth of SMP Landscape

The five-year old SMP market still has a long way to go, but its promise is undeniable and more and more IT leaders will turn to the SMP landscape to optimize their workflows and maximize their IT investments and initiatives.

For now, SMP vendors report moderate adoption growth. Some vendors target small to medium size organizations while some focus on larger enterprise clientele. Enterprise adoption, however, remains low and siloed. This low adoption is mainly due to too many teams being involved in the SaaS life cycle and a general lack of centralized ownership.

Gartner, however, anticipates market changes in terms of demand over the next 12-18 months. Adoption is likely to improve as collaboration and partnerships across different departments become more organized. More and more companies are feeling the burden of SaaS sprawl, and more and more organizations are looking to bring order to chaos. The SMP landscape is a straightforward solution to this dilemma, and with its robust benefits, SMP adoption will soon be a necessity rather than an option.

On the supply side, the SMP landscape will become even more active as SAMs and SaaS security and adjacent market vendors are bound to expand their features and become SMPs. Not to mention continued investor interest in the SMP market. Gartner predicts more mergers and acquisitions among SMPs and adjacent tool vendors. Gartner estimates that by 2027, more than 50% of companies will utilize SMPs.

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Primary Use Cases of SMPs

According to Gartner, SMPs have three primary use cases:

1. Operations and Automation

The first primary use case of SMPs revolves around operations and automation. IT admins have a lot of tasks and responsibilities, and with SMPs to help automate and streamline SaaS management, IT staff can save a lot of time with automated templates for configuration, API-based integration, and other time-saving features and functionalities.

2. Optimization

This primarily refers to cost and usage optimization. When various organizational departments purchase SaaS applications without proper approval or coordination, a lot of inefficiencies and redundancy can occur. This SaaS sprawl challenge is becoming evident in more and more organizations, and a Subscription Management platform can offer the optimization necessary to manage software applications and optimize SaaS usage and costs.

3. Office productivity management

Although the SMPs available nowadays don’t have the capabilities to address multiSaaS environments yet, the function can be executed with complementary support from other adjacent tools like software asset management.

SaaS Management - Gartner Recommendations & Best Practices

The Gartner Market Guide for Future Leaders has been an insightful report to empower IT leaders to embrace the SMP landscape and its full benefits. Let’s discuss the key recommendations and best practices we can adopt from Gartner’s documentation.

SaaS Management Gartner Recommendations

To effectively manage the life cycle of SaaS using an SMP, Gartner suggests that future leaders who are responsible for SaaS and/or digital workplace management should take the following steps:

• Work with procurement, finance, LOB and asset management, IT security, digital workplace, and application leaders to cover all SaaS life cycle phases and maximize ROI.
• Conduct research on SMP market dynamics, generally available capabilities, and proven use cases to define achievable requirements.
• Develop a well-balanced business case that compares the cost of an SMP and resourcing with smart objectives that align with your organization's strategic value, including clear and agreed-upon measures of objective and subjective (or tangible and intangible) benefits.

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5 Best Practices of SaaS Management

Whether you have or are adopting an SMP for your business, we recommend these five best SaaS management practices:

1. Develop an effective SaaS policy - A comprehensive policy should be developed to ensure that all stakeholders understand what is expected of them regarding the adoption and use of SaaS applications.
2. Perform due diligence - Before signing up for a SaaS application, it is vital to perform due diligence to ensure that the application meets your organization's security, compliance, and other requirements.
3. Monitor usage and costs - Monitor usage and costs associated with SaaS applications on an ongoing basis to guarantee that you’re getting the most out of your IT investments. SMPs like Talisman can help you do constant monitoring 24/7, helping you optimize SaaS management from top to bottom.
4. Make use of automation - Automate as many aspects of SaaS management as possible, such as onboarding, off-boarding, access control, and reporting.
5. Leverage an SMP - Implement an SMP to automate the discovery, management, and optimization of your organization's cloud applications to increase ROI and reduce the risk associated with unmanaged SaaS sprawl. Join our waitlist today and discover how Talisman can help your business scale better and protect your runway!

The amount of SaaS spend across organizations worldwide will continue to rise. As the market matures, it is highly recommended to take advantage of an SMP to automate the discovery, management, and optimization of cloud applications. This will help companies maximize ROI and reduce the risk and costs associated with unmanaged SaaS subscriptions. Furthermore, companies should work with vendors to address skills gaps and develop a comprehensive policy that outlines expectations for stakeholders when it comes to the adoption and use of SaaS applications.

Implementing a SaaS Management system is highly recommended whether you are a small to mid-sized startup or an unstoppable unicorn.