How to Understand The New Area of SaaS License Management

Executive Summary

• SaaS license management has become an increasingly important area to understand.

Introduction

SaaS license management is sufficiently new that it does not have an entry in Wikipedia (as of this article’s publication).

What is a SaaS License Management?

This definition does a good job of explaining how SaaS license management fits within the overall context of SaaS management.

SaaS Management is a new category of product that encompasses many disparate processes. A SaaS license management platform includes:

Administration: A central location to view and manage any data associated with SaaS products at an organization.

Role-Based Access Control: The ability to restrict access rights to software based on user’s credentials and needs.

Policy Management: A function for creating, communicating, and maintaining policies and procedures concerning SaaS within an organization.

License Management: The ability to document, cancel, transfer, or upgrade software licenses for your SaaS products in one place.

IT Workflow Automation: A workflow engine to power the changes made and the ability to leverage automations to keep workflows running.

Reporting: A central system-of-record that surfaces necessary information to management.

Good SaaS license management means having a complete system of record of all your SaaS apps, licenses, vendors, users, and compliance data, plus the workflows and automations to be sure that every change you want to make happens and is recorded for auditing. -Blissful

What is Happening in SaaS Software?

SaaS software allows companies to access many more types of software, are “cornucopia” of different SaaS software that was never possible under the on-premises model.

This video does an excellent job of explaining SaaS license management and brings up some of the implications of using so much SaaS software.

Content Disclaimer

*The use of quotes or content from vendors should not be construed as an endorsement for any SaaS vendor management vendor. We are independent and include this material to provide a better understanding.

Hybrid On-Premises, Big Vendor SaaS, and Small and Medium Vendor SaaS

Currently, we have a hybrid situation where there are core and approved applications and then shadow applications. These are defined like this.

Application Type #1: Core Applications

Core applications of a company are a combination of on-premises and SaaS. However, the SaaS applications tend to be from prominent vendors like Oracle or Workday. These types of large vendors are what IT departments are comfortable with and incentivized to buy from.

Faux SaaS Selected by IT Departments?

While prominent vendors are called SaaS, upon inspection, most of these IT department-selected major vendors assert that they are SaaS, but they are not. For example, vendors like SAP and Oracle lock companies into six-year contracts, which removes the flexibility of SaaS, and neither vendor offers multitenancy. This is because SaaS does not fit the business models of the prominent software vendors, so they co-opt the term SaaS without actually being SaaS.

Application Type #2: Shadow Applications

Shadow applications are purchased by departments and not approved or supported by IT. Many people make a big deal out of this lack of SAP support, but most of these SaaS applications are so easy to use that they don’t require internal IT support, and of course, there is the support of the SaaS vendor.

Increasingly a company does not use one application for a requirement. But instead, different departments may use overlapping applications from other vendors. During the pandemic, with so many people working from home, SaaS applications only increased in demand, as remote workers felt freer to use the SaaS applications they wanted.

How We Live the SaaS Lifestyle

We have no IT department at Brightwork Research & Analysis, and in all the companies we have worked for we never liked the restrictions placed on us in terms of what applications to use. We have expertise in a number of applications that none of the IT departments we worked for had any clue about. So all of our applications are shadow applications. Airtable, Dropbox, Wordpress, Google Drive, Google Docs, Google Sheets, Grammarly, Pocket, etc... We also rent a dedicated server and have no servers on-premises. This is freedom, and this is how it should be.

We don't know how much longer IT will continue to serve its gatekeeper function for the core applications, but there is little doubt the control of the IT department has eroded. This is the present and more so the future, as SaaS vendors for every possible need continue to proliferate.

SaaS and Application Diversity

It means not only SaaS applications gobbling up more real estate from the on-premise application delivery but also many smaller SaaS applications gobbling up real estate from more prominent SaaS vendors.

The Outcome of SaaS on User Satisfaction and Productivity

The outcome is much more user satisfaction and choice for the users within a company.

There is very little research on the productivity of the increased use of more SaaS applications. However, one study showed that users are now spending more time trying to find things in different SaaS applications, as you can read about in the following article. There is debate on the overall productivity due to using many SaaS applications. Having more options can allow the user to choose just the more appropriate tool for the task.

However, one undisputed thing is that managing many SaaS applications has increased overhead.

More Overhead of Managing a Multitude of SaaS Applications

However, it also means more overhead in managing many more applications than ever before, and as mentioned, this trend shows no sign of slowing. But this means a large assortment of applications that must be managed. And this is where SaaS license management comes into play.

What We Do

We are knowledgeable about SaaS license management and the different SaaS license management applications.

Who Manages SaaS License Management Application?

The question is tricky because while some of the SaaS applications a company uses are purchased by the IT department, the SaaS applications from the smaller vendors tend to be bought by the business departments. Also, the budgets are local, so the finance department will care about the SaaS applications that it funds and will not care about the SaaS applications the marketing department funds.

This lack of centralization means that the use and funding of many SaaS applications mean that the SaaS license management system and the approach to SaaS license management are also decentralized.

All of this is still nascent, and the company’s ways of dealing with this are still evolving, with some companies doing it one way and others doing it another.

Remarkably, there is little written on this particular topic.