What SaaS Vendors Are Silent About in Their Reports: Keep your Ears Open and Take Action

Ekaterina Mizrobova

We’ve already talked a lot about increasing SaaS adoption rates. Organizations rely on SaaS applications in critical operations more and more often. It’s stipulated by numerous benefits that SaaS provide to businesses. First of all, it’s a seeming cost reduction. Secondly, simplicity of SaaS deployment allow business units remain flexible and do not interrupt the business process while waiting for the IT dept approval to install new software. Besides, SaaS applications easily grow with businesses. Thirdly, businesses are happy to shake off software renewal, support and maintenance to vendors. And the last but not least reason is that SaaS applications are available night and day 7 days a week from anywhere if you have an electronic device and an Internet access.

However, a SaaS app is a coin with two sides. On the negative side, the simplicity of SaaS deployment instigates SaaS application “cloud sprawl” – uncontrolled proliferation of cloud services in the organization. As a result, lots of applications are not on the radar of IT depts becoming shadow IT. Besides, cloud sprawl leads to the increase of excessive costs. IT budgets are literally wasted on unutilised and underused applications. Besides, shadow IT is not accounted for in Profit and Loss (P&L) reports. Some employees do not use purchased applications as they do not need them to perform their routine operations or are simply not properly trained to adopt new apps. Some users forget to unsubscribe from the apps they do not need any longer and companies continue paying for orphaned subscriptions.

These pitfalls are used by SaaS vendors to increase their profits. Of course, SaaS vendors are not villains and do not create ambiguities for their customers on purpose. They strive to develop useful applications that can help users achieve their business objectives, however profits still do matter for their own objectives and existence. That is why users’ non-compliance and ignorance plays into vendors’ hands, cause they can make money out of audits and true-ups. The situation when users do not manage SaaS application entitlements or renewals is also advantageous for SaaS vendors – organizations continue paying for applications that they don’t really need, as these apps are not utilized or are underused. For instance, Office 365 Business Premium costs $15 per user/month, while Office 365 Business costs $10 per user/month. Therefore, a company that purchased 1000 licenses of Office 365 Business Premium, out of which only 300 are fully used, blows away $42,000 a year.

Some SaaS vendors provide users with application usage reports. However, these vendor reports and reports some customers try to generate themselves are often incomplete and do not tell how many SaaS applications are really used, whether they are intensively used, by whom, etc. Such incomprehensive reports do not allow organizations make efficient license management decisions. Organizations need more information to understand whether they are over- or underlicensed and take the corresponding measures. Such information, however, can be provided by the Binadox SaaS Web Usage Monitoring Solution. Binadox unlike many SaaS Monitoring solutions do not only track logins and duration of a work session, but also measures usage capacity based on the number of mouse movements and keyboard strokes. Thus, Binadox SaaS Web Usage Monitoring provides all the data organizations need to define their effective license position and renegotiate SaaS contacts, when needed.

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