SaaS Management is the practice of monitoring, governing, and optimizing the use of software-as-a-service (SaaS) applications within an organization's technology portfolio. It includes discovery, inventory, financial management, security governance, and lifecycle administration of cloud-based software. [1]
According to the International Data Corporation (IDC), the enterprise applications market reached $356 billion in 2023, with public cloud-based applications projected to account for over 70% of new enterprise software spending by 2028. [2] Organizations implement SaaS management to address application discovery, license optimization, security compliance, and vendor relationship management.
Research on SaaS operational management, including pricing under varying security and privacy requirements, remains limited. [3]
SaaS management evolved from software asset management (SAM) practices developed in the late 1980s. SAM focused on license compliance and inventory tracking for on-premises software, establishing principles later applied to cloud-based applications. [4]
Software-as-a-service developed in the late 1990s, expanding on the application service provider model. Early pioneers like Salesforce popularized SaaS as a delivery model, with Salesforce going public in 2004, raising $110 million. [5] Growing use of SaaS created challenges in managing distributed software portfolios.
Self-service provisioning made SaaS applications accessible without IT department involvement, leading to the growth of "shadow IT"—software or services used without formal approval. [6] A 2015 Cisco study found that while CIOs estimated their organizations used 51 cloud services on average, the actual number was about 730. [7] Shadow IT increased security risks, compliance challenges, and portfolio fragmentation.
Centralized governance needs drove the development of SaaS management platforms in the 2010s. By 2024, enterprises managed an average of over 125 applications, with portfolios growing annually by more than 20.7%. [8]
Gartner first recognized the category in 2017 in its Market Guide for Cloud Office Management Tools, renaming it Market Guide for SaaS Management Platforms in 2018. [9] By 2024, Gartner published its first Magic Quadrant for SaaS Management Platforms. [10]
Application discovery identifies and catalogs SaaS applications in use, including those acquired outside central IT procurement. Automated tools detect both sanctioned and unsanctioned applications across enterprise environments.
Usage monitoring tracks license utilization, user activity, and performance metrics to enable data-driven decision making. The data supports license allocation decisions and identifies underused applications.
Financial management involves tracking and analyzing SaaS expenditures, including contract terms, renewal dates, and license usage, to control costs and optimize spending. These capabilities enable organizations to implement cost control measures across distributed software portfolios.
Security and compliance processes ensure SaaS applications meet organizational policies and regulatory requirements. This includes policy enforcement, vulnerability assessment, and data protection measures.
SaaS management helps identify unused licenses, eliminate duplicate applications, and optimize subscriptions. Centralized tracking of renewal dates, contract terms, and spending patterns helps prevent unnecessary expenditures.
Centralized management increases visibility into all SaaS applications, including unauthorized shadow IT deployments. Studies report that 75% of organizations experienced SaaS-related security incidents within a 12-month period, despite confidence in security measures. [11]
Comprehensive SaaS oversight supports compliance, data governance, and vendor management, reducing risks associated with security breaches and operational disruptions.