SaaS Management

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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]

Contents

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]

History

Origins in software asset management (1980s–1990s)

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]

Early SaaS adoption (2000s)

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.

Growth of shadow IT

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.

SaaS management platforms (2010s–present)

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]

Components

Application discovery and inventory

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 and analytics

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

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

Security and compliance processes ensure SaaS applications meet organizational policies and regulatory requirements. This includes policy enforcement, vulnerability assessment, and data protection measures.

Benefits

Cost reduction and visibility

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.

Enhanced security posture

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]

Risk mitigation

Comprehensive SaaS oversight supports compliance, data governance, and vendor management, reducing risks associated with security breaches and operational disruptions.

See also

References

  1. Andrade, Alexandre dos Santos; Feitosa, Marcelo Duduchi; Azevedo, Marilia Macorin de (2024-11-11). "From Software Management to Software Ecosystem Governance: A Bibliographic Review on Software Governance Practices Within Organizations and Their Evolution". Revista de Gestão Social e Ambiental. 18 (11): e09727. doi:10.24857/rgsa.v18n11-088. ISSN   1981-982X.
  2. "Worldwide Enterprise Applications Revenue Grew 12.0% in 2023 and Is Forecast to Surpass $600 Billion in 2028, According to IDC". IDC: The premier global market intelligence company. Retrieved 2025-08-08.
  3. Li, Bo; Kumar, Subodha (June 2022). "Managing Software‐as‐a‐Service: Pricing and operations". Production and Operations Management . 31 (6): 2588–2608. doi:10.1111/poms.13729. ISSN   1059-1478.
  4. "International Organization for Standardization. ISO/IEC 19770-1:2006 Information Technology — Software Asset Management — Part 1: Processes. 2006" (PDF). www./cdn.standards.iteh.ai.
  5. "Salesforce.com Top I.P.O. of the Year (Published 2004)". 2004-06-23. Retrieved 2025-08-08.
  6. Kopper, Andreas; Westner, Markus; Strahringer, Susanne (2020-06-01). "From Shadow IT to Business-managed IT: a qualitative comparative analysis to determine configurations for successful management of IT by business entities". Information Systems and e-Business Management. 18 (2): 209–257. doi:10.1007/s10257-020-00472-6. ISSN   1617-9854.
  7. "Cisco: CIOs should take shadow IT threat more seriously | CIO Dive". www.ciodive.com. Retrieved 2025-08-08.
  8. "The SaaS Benchmark Annual Report 2025". Torii. Retrieved 2025-08-08.
  9. "Market Guide for SaaS Management Platforms". Gartner. Retrieved 2025-08-08.
  10. "Magic Quadrant for SaaS Management Platforms". Gartner. Retrieved 2025-08-08.
  11. "SaaS security is now a major blind spot for enterprises". IT Pro. 2025-07-15. Retrieved 2025-08-08.