5 Clever Ways To Optimize SaaS Spend

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min read time
March 29, 2023
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As the growth continues, businesses must be careful about how much money they spend on these IT applications. This expansion makes it challenging to monitor pricing and ensure they get the best return on their investment.

By 2023, the Software-as-a-Service (SaaS) industry will be worth over $195 billion. This industry is rapidly growing and has quickly become the most crucial technology for the success of a business. 

With this development in the SaaS industry, many businesses are looking to adopt SaaS applications in their tech stack. By 2025, around 65.9% of spending on software is expected to go to SaaS technologies. 

Though SaaS applications benefit organizations, uncontrolled SaaS spending can significantly impact your revenue. This arouses the need for SaaS spend optimization to prevent businesses from overspending on SaaS applications and increasing their ROI. 

As a result of the economic uncertainty in 2023, businesses have already started to optimize their SaaS spend, and this article will provide effective strategies to help reduce SaaS expenses.

What is the need for SaaS spend optimization?

Previously, an organization's expenses would be managed by one department—finance.

But, with an increase in autonomy for employees and IT spend, it has become harder to track and manage these expenses. SaaS has altered the game, making it much more difficult for IT teams to manage their budgets across the organization.

By optimizing SaaS spend, businesses can effectively manage their budgets, prevent shadow purchases, avoid overspending on SaaS, and ensure that they are only paying for the services they need.

This can help improve the organization's overall financial health and enable it to allocate resources more efficiently toward other critical areas of the business. A SaaS spend management platform can assist you here.

It is essential to make strategic decisions about SaaS spend optimization, as it can save thousands of dollars every month that would’ve otherwise gone to waste.

How to optimize your SaaS spend

You have now decided to reduce your SaaS spend. But where do you begin? Here are some ways that can help you control SaaS spending.

1. Eliminate duplicate, redundant, and unused apps

More than 35% of spending on SaaS is wasted in organizations. Many companies have given employees the autonomy to spend on IT solutions as and when required, which often results in them buying similar applications due to communication gaps.

Ultimately, they end up paying for different apps that serve the same purpose. Having multiple duplicate applications in an organization, like employee collaboration apps, web-conferencing applications, and project management tools, can waste company resources.

An image of CloudEagle's dashboard showing duplicate applications

When there is no proper SaaS spend management system to control all SaaS subscriptions in one place, you won’t know which applications are being consistently used by your teams.

There will be a few unused apps by your teams; your IT team won’t be able to identify these redundant applications if they don’t have visibility into your tech portfolio.

An image of CloudEagle dashboard showing unused applications

By using a SaaS management platform, you can identify all the applications that currently exist in your SaaS stack, including those that are being used, duplicated, or redundant. It is recommended to remove these redundant apps, as the finance team is still paying for them, which can result in savings on SaaS expenditures.

2. Enhance license management

The management of licenses is crucial to waste reduction and optimization in general. Often, companies overspend on licenses and pay a substantial amount of money.

Each year, approximately $34 billion in licensing waste is generated between the United States and the United Kingdom alone. Additionally, due to improper offboarding of employees, companies also end up paying for unrevoked licenses.

Use license management equipped SaaS spend optimization software to ensure that there are no unused or under-used licenses that a company is paying for.

These days, most businesses keep an inventory of all the SaaS apps they use, including details on the license, people who have access, and the data used. This facilitates efficient licensing management, which reduces costs and minimizes SaaS expenditure.

Another effective technique to improve the licensing management process is to automate license tracking. It assists in keeping track of licenses and identifying usage trends to identify the best opportunities to optimize that distinctive license.

3. Streamline SaaS renewals

Renewing an existing SaaS subscription is usually done annually or biannually. As a result, a subscription gets renewed without anyone’s knowledge, leading to needless spending. Still, most apps now offer auto-renewal, which many forget to switch off manually.

With the help of a SaaS spend optimization tool, companies can have full visibility into their SaaS stack and regularly review their software renewal strategy.

Spend management platforms like CloudEagle is equipped with SaaS renewal workflows to help finance teams stay proactive about renewals.

An image of SaaS renewal workflow of CloudEagle

These workflows begin 90 days in advance and escalate to various members of the team until someone acts on them and renews the contract, thus saving needless expenses.

Image showing a quote from Pratibha Mehta of Falkonry

Check out this exciting customer story of how Falkonry streamlined SaaS renewals using CloudEagle →

4. Follow the ‘Pay only for what you use’ approach

One of the most convenient ways businesses optimize SaaS spending is by following a  usage-based pricing approach rather than paying a fixed subscription fee during the upcoming renewal/transaction window.  

To make this possible, you’ll need a SaaS management platform to check app usage details. Understand how your users are utilizing the applications and licenses and prepare a renegotiation plan.

A dashboard image of CloudEagle to help optimize SaaS spend

If the teams are not utilizing some features of a SaaS application, you can renegotiate with the vendors to exclude those features from future transactions. If your team lacks the bandwidth to renegotiate, you can seek help from assisted-buying experts to negotiate for you and slash your spending. 

For example, suppose you’ve purchased 100 licenses for HubSpot, and only 60 are used. In that case, you can eliminate the unused licenses during the next renewal window and request vendors to charge you only for the licenses you’re using. 

Or, if you’re yet to purchase the application, communicate with your team to understand their requirements and necessary features clearly. Negotiate the pricing for the features and licenses you need instead of paying the list price for applications.

5. Streamline SaaS buying

Spending on SaaS increases year over year by more than 20%. A SaaS buying tool equipped with procurement workflow and assisted buying services can help companies find the best deals on SaaS applications and track and control spend to maximize their value.

Streamlining software procurement processes with a centralized procurement platform can save an organization time, money, and other resources. Also, SaaS buying partners assist clients in avoiding pricey contract pitfalls through effective negotiation.

Shadow IT is also prevalent in organizations that lack a centralized procurement process. And guess what? Shadow IT leads to increased SaaS spending.

So, to optimize your SaaS spend, one of the best practices is to streamline your procurement process using a tool like CloudEagle.

Optimize SaaS spending with CloudEagle

Use a complete SaaS lifecycle management platform like CloudEagle to reduce your SaaS spend. However, cost optimization features are not the only reason to choose CloudEagle. The platform offers several other features, including,

An image of CloudEagle's dashboard

Spend optimization

Identify duplicate, redundant applications in your system and consolidate the licenses to reduce SaaS spend. 100% SaaS visibility provided by CloudEagle will enable your IT team to spot overlapping and redundant apps effectively.

License management

CloudEagle tracks user activity on each application and displays accurate app usage insights. The platform will notify you of unused and underutilized licenses and will assist you in making necessary license optimization decisions.

You can use the assisted buying services of CloudEagle to renegotiate with the vendor and eliminate unused licenses.

SaaS renewal management

Streamline renewal management using the automated renewal workflows of CloudEagle. Auto-renewals will incur needless expenses. Never miss out on renewal again, and reduce SaaS spend by automating SaaS renewals.

SaaS procurement

A decentralized purchasing process will give your employees and other teams too much power. Create a centralized procurement process using CloudEagle and automate the process using workflows. This saves time for your procurement team to focus on more strategic tasks.

Workflows make the entire process transparent, and since they become the only source for purchasing, IT teams can significantly prevent shadow IT and increase SaaS savings.


Gone are the days when SaaS subscriptions would be manually tracked on simple spreadsheets. With the increasing use of IT applications, keeping track of their perceived versus actual value becomes impossible.

SaaS spend management may appear to be a minor concern for a company, but if ignored, it can end up costing that company thousands of dollars each year that could have been used more effectively. If done correctly, it can save more than just time and resources.

With CloudEagle, you can streamline your subscription management, control renewals, optimize or eliminate duplicate and redundant apps, and negotiate your contracts to get the best pricing.

So, what are you waiting for? Book a demo now with CloudEagle, talk to our experts and realize potential savings.

Written by
Nishi Singh
SaaS Buyer, CloudEagle
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