A Smart Way to Renew SaaS Apps

Ekaterina Mizrobova

According to Gartner, “by 2020, for 40% of software titles, the fundamental priority of SAM will shift from managing compliance with software publisher terms and conditions to eliminating unnecessary expenditure in ‘as a service’ contracts.” And one of the opportunities to cut SaaS costs is renewal management.

In the era of the cloud, traditional licensing model is being forced out by a software-as-a-service (SaaS) licensing model. In general, SaaS application contracts anticipate automatic renewal upon the expiration of the paid subscription period – as a rule, a subscription is paid per month or per year. On the one hand, it’s convenient for SaaS customers as automatic renewal allows them to avoid business processes interruption. However, on the other hand, automatic renewal doesn’t give them the opportunity to decide whether it’s reasonable and economically justifiable to continue usage of a particular SaaS app.

Before making a decision to continue SaaS usage, you should first of all ask yourself whether the costs are worth it and how frequently and fully the SaaS app is used. Unmanaged renewal of SaaS apps will certainly have a negative impact on the IT budget. That is why, you should weigh all pros and contras before making a decision to renew. The SaaS app value for the company should outweigh the associated expenditures. Besides, not all purchased SaaS entitlements are used by the employees and not all of those apps which are utilized are used in full scope. By renewing such applications you are just blowing the budget.

Renewal is also a great opportunity to plan for the future. Before renewing any SaaS application, you should also ask yourself how the increase in the number of the SaaS app users will affect the IT costs and whether the price you are going to pay is the best one you can get. The licensing model should be flexible and capable to grow with the business without serious implications for the budget. SaaS vendors are popping up every day, therefore before renewing any subscription, it’s reasonable to review other products available on the market. You can also initiate negotiations with the vendor and come to an agreement on a more favourite conditions or a discount. Today vendors are often willing to agree due to intense competition on the SaaS market.

To answer the aforementioned question, SaaS customers need full visibility of the SaaS assets used across the company. Such visibility can be provided by SaaS Monitoring tools, such as the Binadox SaaS Web Usage Monitoring. With Binadox you’ll always know what SaaS apps are really used and whether entitled users adopted those apps in full capacity.

How to save IT budget on SaaS subscriptions and software compliance