Businesses today are increasingly reliant on SaaS applications to drive their operations.

According to the research from Weavr, a significant 80% of businesses use at least one SaaS application to support their functions. Furthermore, 22% of IT leaders report that their enterprises utilise between 51 and 100 different SaaS applications.

This widespread adoption highlights the growing importance of SaaS in the modern business landscape.

However, managing multiple subscriptions is not easy. It can become increasingly complex as your SaaS subscription portfolio grows, leading to potential issues with security, compliance, and budget management.

These challenges, if not addressed, can escalate into significant issues. Uncontrolled SaaS spending can eat into budgets while hidden compliance risks may disrupt operations.

A lack of clear oversight on software usage can also make it difficult to align technology with business goals.

SaaS subscription management is one of the approaches that can effectively tackle these issues.

This approach offers strategies and tools to help businesses gain control over their SaaS subscriptions.

Today we’re going to talk about SaaS subscription management. We’ll explore how it can solve common challenges you’re likely facing.

From controlling costs to improving security, this approach offers practical solutions to streamline your software usage. Whether you’re drowning in subscriptions or just looking to optimise, you’ll find valuable insights here.

Let’s get started on making your SaaS work smarter for your business.

What is a subscriber in SaaS?

In the context of Software as a Service (SaaS), a subscriber is an individual or organisation that pays for and uses a software application or service on a recurring basis.

Unlike traditional software models where users purchase a licence outright, SaaS subscribers typically pay a regular fee (monthly, annually, or on another schedule) to access and use the software.

Key characteristics of a SaaS subscriber include:

• Recurring payments: Subscribers commit to ongoing payments to maintain access to the software.
• Cloud-based access: They can usually access the software via the internet, often through a web browser or dedicated app.
• Regular updates: Subscribers benefit from automatic updates and new features without needing to manually install new versions.
• Scalability: Many SaaS models allow subscribers to easily upgrade or downgrade their service level as needs change.
• Support and maintenance: Subscribers typically receive ongoing technical support and maintenance as part of their subscription.

These characteristics define the relationship between SaaS providers and their customers, shaping how software is delivered, used, and managed in modern business environments.

SaaS Subscription vs. Licencing

SaaS licencing and subscription models offer different approaches to software access and payment.

Licencing typically involves a one-time purchase or periodic renewals, granting perpetual rights to use the software. This model may have higher upfront costs but allows ongoing access without recurring payments. However, it might lack continuous updates or support unless separately purchased.

On the other hand, subscription models provide access to software as a service for a defined period, usually monthly or annually, based on recurring payments. This approach often includes ongoing updates, support, and access to new features. Subscriptions generally offer greater flexibility to scale services based on changing needs.

Some of the key differences include:

• Ownership vs. Access: With a license, you own it. With a subscription, you’re renting access.
• Cost Structure: Licenses often cost more upfront but less over time. Subscriptions spread the cost out but might cost more long-term.
• Flexibility and Updates: Subscriptions are typically more flexible and include updates. With licenses, you might need to pay extra for these perks.

Choosing between them depends on your specific needs, budget, and how you prefer to manage your software. There’s no one-size-fits-all answer—it’s about what makes the most sense for your situation.

More in Nexalab’s blog: What is SaaS Licence Management? A Definitive Guide for Businesses

SaaS Subscription Management: Definition and Key Objectives

SaaS Subscription Management is the process of overseeing a company’s cloud-based software subscriptions. It involves tracking, optimising, and controlling the use of SaaS applications across the organisation.

This approach helps businesses:

1. Gain visibility into their software usage
2. Reduce unnecessary costs
3. Maintain compliance with regulations and licences.
4. Improve software integration and efficiency.
5. Address security concerns related to unauthorised software use.

As the cloud software usage is growing, smart management becomes more important. It helps businesses pick the right software, weighing costs against needs and goals.

SaaS subscription management aims to optimise a company’s use of cloud-based software. Its key objectives include:

• Cost optimisation: This involves finding unused licences, cutting redundant applications, and negotiating better terms with vendors. The goal is to reduce unnecessary spending while keeping essential services.
• Security Strengthening: Companies can lower data breach risks through careful monitoring of sensitive data access and user permission management. This approach also addresses shadow IT issues, where employees use unauthorised software.
• Compliance management: Tracking and documenting software usage helps the company follow regulatory requirements and stick to licence agreements.
• Operational efficiency: Centralising software procurement and management streamlines processes, saving time and cutting administrative overhead. It also gives a clearer view of the company’s software landscape.
• Strategic alignment: Making sure software investments support broader business goals is key. This might involve prioritising certain types of applications or features based on the company’s strategic direction.

These objectives work together to create a more efficient, secure, and cost-effective SaaS ecosystem within the organisation, ultimately supporting better business outcomes.

Implementing SaaS Subscription Management Strategy in Your Business

A well-planned management strategy helps organisations organise their SaaS ecosystem, optimise costs, and mitigate risks.

When you want to implement a SaaS subscription management strategy, there are several things you need to consider, like auditing your current subscriptions and considering the usage of the SaaS management platform.

Consider these five key steps as a starting point for establishing a robust SaaS management strategy in your organisation:

1. Audit and assess current subscriptions

Conduct a comprehensive audit of all SaaS applications, including IT-approved and shadow IT solutions. Use discovery tools to uncover hidden apps. Analyse usage frequency, active users, and business value for each application. This helps identify redundant or underutilised subscriptions and consolidation opportunities.

2. Establish governance policies and centralise management

Create clear guidelines for SaaS procurement, usage, and renewal. Define approval processes, security standards, and access management procedures. Form a cross-functional team to oversee SaaS governance. Implement a central system to track and manage all SaaS subscriptions, improving visibility and control.

3. Optimise costs and monitor continuously

Use audit insights to optimise SaaS spending. Consolidate duplicate subscriptions, negotiate better rates, and right-size licences. Consider tiered licencing based on user roles. Set up ongoing monitoring of usage, costs, and compliance. Use automated tools for real-time insights and alerts about renewals, usage changes, and security risks.

4. Train employees and promote best practices

Develop a training programme on SaaS management importance and policies. Cover shadow IT risks, software request procedures, and secure usage practices. Create role-specific modules and regularly reinforce training. Encourage employee participation in optimising the SaaS ecosystem.

5. Consider implementing a SaaS Management Platform (SMP)

SaaS subscription management process can be overwhelming and time-consuming. This is especially true when your company is at the growing stage and needs to manage multiple subscriptions across different departments.

That’s where you might need to consider a SaaS management platform. This software solution automates tasks like renewals and compliance checks and lets you centralise all subscriptions while giving you visibility into usage and costs.

SMPs offer features to simplify and automate SaaS management, including:

• Automated discovery and categorisation of apps
• License optimisation recommendations
• Integration with financial and IT systems
• Security and compliance monitoring
• Renewal and contract management
• User provisioning automation

An example of this software is Octobits by Nexalab. It automatically discovers and categorises SaaS apps, analyses spending for cost optimisation, and assesses security risks. SMP software can reduce manual effort, provide deeper insights, and align software investments with business goals.

When choosing an SMP, consider integration ease, scalability, reporting capabilities, and vendor support.

More in Nexalab’s blog: What is SaaS Spend Management? Definition, Benefits, and Best Practices

Conclusion

Effective SaaS subscription management is key to controlling costs and maintaining operational efficiency. Whether using manual tracking or a SaaS management platform, you will always need a structured approach to it. Choosing the right strategy can help optimise your software usage and enhance overall productivity.

Octobits by Nexalab offers a comprehensive solution for SaaS subscription management. It is a SaaS management platform that automates key tasks such as subscription tracking, renewal management, and usage monitoring, providing a central platform for all your SaaS needs.

Contact Nexalab today to explore how Octobits can improve your SaaS subscription management.