Companies strike a significant tipping point when it comes to how they build and manage their software tech stack. On the one hand, the storm of pandemic-related IT change is starting to calm down, but on the other, many are facing an economic downturn that could further affect and pressure businesses.
The resilience and adaptability of any company that has survived the pandemic is admirable. But the hard truth is that many of those same companies face a “pay-the-price” moment when the costs of their decisions and actions over the past 18 to 24 months are due.
That said, few areas of your tech stack will have as much exposure as your software license renewals.
The SaaS tsunami
Digital transformation came quickly for most businesses – whether they were ready or not. The shift to remote working and the need to quickly scale and onboard solutions pointed in one logical direction: cloud-based software. Lower entry costs, minimal infrastructure requirements and rapid implementation made the move to a SaaS tech stack the obvious choice.
One of the best ways to help IT managers streamline the SaaS refresh process is to remove it completely from their boards.
In 2021 Deloitte estimated that: 94% of the organizations were using some cloud-based SaaS products. According to our research, the average enterprise organization has doubled its SaaS spend since 2018 and now spends $35,000 on nearly 300 different tools.
In the heat of the moment, many companies focused on the immediate challenges SaaS could solve without really understanding how this digital transformation would impact how they find, buy, and manage their tech stack in the long run.
Minimizing stack depletion in the face of a recession
The 2020 and 2021 SaaS purchases have led to tech stack fatigue, and IT departments are feeling the pressure to manage a complex and diverse set of tools and justify ROI in the face of rising software costs.
SaaS companies used aggressive pricing to gain a foothold in organizations that relied on and benefited from it during the pandemic. Many have been incredibly successful in helping companies achieve their goals, improve productivity and recognize ROI in difficult economic times. In fact, much of these SaaS products have become ubiquitous. Those with tacky, “can’t-live-without-it” features (think Airtable, Monday.com, and Slack) try to capitalize on those interventions when the time of renewal comes.