Back to basics: What is SaaS management?

Defining software as a service (SaaS) management—the 2020 version


While software asset management (SAM) is all about keeping track of software licenses, entitlements, and contracts, confirming proper usage and compliance, and making sure software costs are not being wasted, software as a service (SaaS) management, on the other hand, is…well, actually they are very similar. The main difference, of course, is where the software resides, the cloud. But before we get into the requirements for effectively managing cloud-based applications, let’s explore some history.

When SaaS was born. It’s not when you think.

Surprisingly, the concept of software as a service has been around since the 1960s. Back then it was referred to as “time sharing.” Companies used dumb terminals to link to networked mainframes. Access time was prescheduled and charged by the hour.

With the advent of desktop PCs in the 1980s, a new approach to shared computing appeared, the local area network, or LAN. This offered a secure way to exchange data and documents amongst a very controlled population of devices. This hub and spoke configuration saved companies millions when it came to investing in physical hard drive space. The management principles around access and security established for LANs highly influenced the same for the cloud.

As the internet became more widely used in the late 1990s, companies began storing data more cheaply offsite. Special programs were introduced to manage and process that data. Application service providers (ASPs) offered an inventory of programs, from CRM to payroll to accounting, all on a subscription basis and delivered from their own servers. This model was attractive to enterprises, as it put the responsibility of managing deployments, upgrades, and patches on the ASP. Unfortunately, since this model delivers a service only to a small number of users, it can’t offer the benefits of scale many parts of a fast-growing enterprise need.

The rebirth of the SaaS approach

Software as a service in modern terms is built on the elasticity and scalability of the cloud. SaaS solutions are generically delivered at scale to tens of thousands, even millions of users through shared environments (multitenancy). Applications delivered via the cloud are expected to continue their strong growth. Bloomberg predicts that by 2023, the market will be more than $60 billion.

SaaS is here to stay. But the challenges it presents don’t have to be.

It is the very thing that makes SaaS so attractive that also presents the biggest headaches for enterprise IT: easy access and use. A recent cloud report from Netskope found that the typical enterprise uses an average of 1,246 cloud services. That large number represents only a portion of the total, however. Literally anyone with a connection to the internet can sign up for a cloud-based application, and that access can be extended to others illegally simply by sharing a login and password. This has created nightmares for software asset managers as they try to keep on top of all licenses and agreements, as well as keeping corporate data secure.

Some of the top concerns for SaaS management are:

  • Lack of usage visibility: Vendors typically provide no specific usage data or address licenses with low meaningful usage. Additionally, insight into activities performed within each application has been limited or nonexistent.
  • Wasted spend: A side effect of the visibility issue is that there is no data on licenses that have gone “stale,” meaning they have been purchased, are installed or active, yet are rarely being used. Plus, there may be overlapping licenses for applications that do exactly the same thing.
  • Unauthorized users: Shared or passed down logins without supporting licenses
  • Client-side software licenses: Does the application have the correct permissions to connect to on-premise software components and are those components free to deploy across the entire environment
  • Shadow IT: The speed at which applications can be spun up and down on the cloud makes it tempting for individuals and even departments within the enterprise to sidestep policy and purchase their own access. Entitlements owners are spread across the business, with no cross-team coordination. This leads to …
  • SaaS sprawl: IT management has no clear view of all cloud-based software in use, the cost implications, and the risks to data security.

Enter SaaS License Management

SaaS License Management is a relatively new proactive business practice of monitoring and managing any evaluation, purchase, licensing, maintenance, renewal, compliance, and offboarding of cloud-based applications. While guided by IT and procurement, it prioritizes agility and potency. It is committed to the modern buyer, who carries the high expectations of technology from consumer apps into the enterprise. Tools for SaaS license management also provide usage data and compliance records to aid in pricing negotiations and audits. This data, when added to on-premise software and hardware management efforts, brings about the best ITAM outcomes. Whatever the solution chosen, it must enable cooperation between all the key stakeholders—IT, procurement, software owners, security, and budget holders—and deliver on these four areas:

  • Integration with systems of record in finance, contracts, IT directories, and with cloud applications and SSO tools to drive true data across several key platforms.
  • Automation to all internal systems ranging from helpdesk to Procure-to-Pay to ERP or contract management tools.
  • Intelligence to leverage modern technologies for processing big data, like machine learning. This tool must intelligently power insights to all stakeholders using AI.
  • Frictionless by using communication channels already in use, like email, internal messaging apps, and ticketing systems.

In conclusion

A recent Forbes blog predicted that “… 2020 will be the year in which enterprise applications will go cloud native.” The writer foresees the lines between once siloed SaaS, platform as a service (PaaS), and infrastructure as a service (IaaS) will continue to blur so that data streams will be more mobile. . Management of the software side of cloud will require more capabilities for the IT infrastructure team and more integrated tools for monitoring and managing usage across the entire stack.

To learn more about best practices for software asset management for on-prem and cloud-based applications, read the ebook: “What is SaaS License Management?”

Learn more: What is SaaS License Management?