SaaS Management is Changing (And Not Everyone is Ready)

The rate at which the world is changing is absolutely terrifying. If you are not prepared to change with it, you will get left behind.

Tim Berners-Lee, OG of the Internet

Change is the continuous rotation of threat and opportunity—it rewards the agile and punishes the slow, and the area of SaaS Management Platforms (SMPs) is no exception. 

Ever since the pandemic accelerated the cloud-first workplace trends, IT teams have become increasingly central to the multivariate workplace, influencing employee retention and budgets, security and profits, all through the management of SaaS.  

As a result, SMPs are required to do more in the service of professionals who are also required to do more! But, this has resulted in an increasingly scattered marketplace of platforms, with both strengths and glaring weaknesses. 

But, before we look at those strengths and weakness, it's important to know...

How did we get here, and what’s next? 

In this article, we’ll jump through the evolution of the SMP market, examine the impact of the pandemic, and look at how IT can carefully select a SaaS Management partner going forward. 

Note: Need a recap? Check out our SaaS Management Platform explainer. 

The Old SaaS Management (2018-2020)

Before the pandemic, SaaS Management as an industry mainly was related to the interaction of employees and software. Specifically, onboarding and offboarding. Most of the platforms had some form of capabilities related to: 

• Provisioning sanctioned SaaS
• Deprovisioing during offboarding
• Discovery (typically limited to sanctioned apps)
• Some user management/governance oversight
• Some expenditure visibility

Most of the tools in this space focused on tools for IT Professionals, but there was a shift beginning towards the procurement and finance side of the organization. 

In 2020, Gartner launched their first Market Guide for SaaS Management Platforms, and established three critical capabilities of SMPs. 

1. Discover
2. Manage
3. Secure

And then, as 2020 rolled in, so too did the N95 masks. 

The Divergence Era (2020-2023)

The SaaSification (trademark pending) of everything began.

Suddenly, organizations had to reevaluate their entire stack based on its compatibility with remote work. Cloud-first became the norm, and companies began buying many cloud apps. 

Along with this shift, IT was thrust into the limelight. Suddenly, their work became more visible than ever before. 

Simultaneously, procurement and finance professionals were making more and more purchasing and renewal decisions associated with SaaS. At this point, the SaaS Management Platform Market began to diverge in two different directions. 

SMPs for Finance and Procurement

Companies such as Vendr and Productiv began to focus on financial stakeholders. These vendors directed their attention toward providing financial insight regarding sanctioned applications. 

Unfortunately, this financial insight for sanctioned channels meant that there were blindspots regarding governance, admin operations, and shadow IT visibility. Essentially, like a VC-backed company shedding a vowel, these organizations left IT users without critical capabilities.

SMPs for IT 

At the same time, some companies, such as BetterCloud, focused on IT, emphasizing operations and automation and double-down on their past customers' needs.

Unfortunately, IT professionals also changed during those intervening years. During the chaos of the pandemic, as IT became more visible, so did the diversity of their work. One example is finance. Many IT professionals became key stakeholders (or even owners) of their company’s SaaS expenditures, pressed with the need to optimize license seats.  

Essentially, in this period, SMP vendors found themselves chasing specific buyers rather than developing solutions to the underlying issues.

The Modern SaaS Management Optimization (Present)

Today, we are witnessing a correction, a consolidation of major players as they try to understand how to harmonize the priorities of the financial and technical stakeholders within the organization. 

At Torii, we’ve long believed that the SMP built for IT was the correct path, but only if it also empowered the IT professional with holistic visibility over the lifecycles of:

• Apps
• Licenses
• Contracts
• Users

Without each lifecycle, the puzzle is incomplete. 

How can you understand dwindling license utilization for a critical app without understanding shadow IT alternatives that employees are finding? You can’t.

Can you make smart renewal decisions without accurate usage data? Of course not. 

Can you achieve secure offboarding without complete shadow app insight? Not a chance. 

SaaS Management isn’t just about the apps or the dollars spent on those apps; it’s about the people using the apps, the shadow expenses, the duplicate contracts within different corners of the organization, and the continuous adoption, integration, and abandonment of tools. 

Note: G2 2024 report—Torii leads all SMPs in both SaaS Ops and SaaS Spend Management

The role of SaaS Management is to synthesize the interlocking lifecycles of employees, tools, licenses, and contracts and then help organizations make some sense of the mess—only then is the chaos of SaaS manageable. 

Adopting Modern SaaS Management

The disruption of the previous few years has made one thing clear: SaaS Management must include both spend management and operations to succeed in the modern organization. Indeed, you cannot have one without the other. 

In response, we see different vendors and platforms attempt to acquire their way to a more complete solution. The question is, will it work, and can IT leaders wait long enough to find out? 

The convergence of financial oversight and IT operations within SMPs isn't merely a trend—it's necessary to centralize relevant insights into one place. As companies refine their tech frameworks, they will continue to gravitate towards solutions that view operations in the context of finances (and vice versa). These aren’t different goals but rather two perspectives on the same goal—building a sustainable organization. 

Today's challenges demand integrated solutions, not more silos. To learn more about modern SaaS Management, check out Torii, the SMP built for today’s IT.