Half of enterprises are wasting more than 10% of their annual budget on software, SaaS and cloud infrastructure, according to new research from enterprise technology mangement provider Oomnitza and global market research firm YouGov.
In addition, a third of respondents reported wasting between 10%-20% of their annual application expenditures due to unused, unaccounted for or mismanaged SaaS and Software subscriptions and licenses.
While many organizations have instituted automated processes to manage SaaS and cloud, the majority (54%) rated their workflows to govern authorized use and licensing of SaaS applications and cloud infrastructure only as “satisfactory.” Further, 9% of organizations said they have experienced unplanned spend and budget issues due to immature or nominal process automation maturity.
“Oomnitza’s research underscores the double-sided sword that cloud and SaaS represent,” says Valerie O’Connell, research director at EMA. “Anyone with a credit card can spin up resources. That’s great for adoption and ease of access, but it’s also a recipe for overspending. Cloud instances, that for whatever reason become abandoned, can keep racking up charges for underlying compute, network and storage resources. Effective process automation capabilities add much needed control and optimization of SaaS, software and cloud investments.”
Additional Survey Findings
Key findings from Oomnitza and YouGov’s 2023 Snapshot Survey: SaaS and Cloud Spend Optimization & Automation report include:
- 50% of respondents lost at least 10% of their annual expenditures on software and SaaS applications; 17% lost at least 20%
- 53% of respondents reported spending more than 10% of their annual budget on underused, unmanaged or unaccounted for cloud resources; 19% wasted at least 20%
- 63% of respondents reported that their organization experienced unplanned cloud and SaaS expenditures and issues with varying workflow automation maturity
- Only 29% of respondents felt that their organization had mature process automation for software, SaaS and Cloud spend governance
Software, SaaS and Cloud Spend Trends by Company Size & Industry
There were some trends when the sample was analyzed by company size and industry:
- Large enterprises (more than 5,000 employees) appeared twice as likely to experience significant (30%) software and SaaS spend management issues compared to small enterprises (less than 5,000 employees)
- 43% of utilities and infrastructure firms and 32% of professional services firms wasted between 10% to 20% of their annual software expenditures
- Large enterprises were not immune from wasting expenditures on cloud resources with a reported 22% overspending by more than 20%
- Nearly a quarter both consumer and public services firms (23%) and utilities and infrastructure firms (22%) overspent at least 20% on software and SaaS
- 11% of large enterprises reported using mostly ad-hoc or manual processes to manage SaaS applications and cloud infrastructure, resulting in unplanned expenditures and issues
- 75% of professional services firms reported either satisfactory or less than optimal use of automated processes to manage SaaS licenses and cloud resources
IT Leaders Must Reduce Spend
Arthur Lozinski, CEO and co-founder of the San Francisco-based Oomnitza, says, “IT leaders must reduce spend and optimize resource use in order to survive the current macroeconomic climate.”
Oomnitza and YouGove’s research offers insight into quantifying the amount of software, SaaS and cloud expenditure waste. Lozinski underscores the need for enterprises to mature and expand their IT process automation capabilities to improve operational efficiencies.
“We’re living in an era where IT has to do more with less and that cannot be accomplished with manual ticket-based processes,” he says.
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