What Is a SaaS License Agreement
The average company wastes 10% of their IT budget on unnecessary SaaS applications. Discover how to save resources through effective SaaS license management.
The average company wastes 10% of their IT budget on unnecessary SaaS applications. Discover how to save resources through effective SaaS license management.
In the history of Middle Earth, the elves crafted 19 Rings of Power. When Sauron made his bid for power over the realm, he didn’t bother with tracking down the individual humans, dwarves, and elves who held them. That would’ve been far too time consuming—and costly. Instead, he crafted the One Ring to rule them all from a central location. SaaS management isn’t so different.
In fact, Statista reports that the average business manages 130 SaaS (software as a service) applications. That’s a lot to keep track of, and failing to manage these applications effectively can result in the following negative consequences:
With only 19 rings to manage, Sauron had it easy! In this blog, we break down the basics of revolutionizing your approach to SaaS license management, including how to forge your own One Ring to rule them all with Lumos!
Software as a Service (SaaS) licenses provide users with access to a software platform in exchange for a monthly or annual fee. A common SaaS license example in the home is Netflix (or any other of the multitude of streaming services). You pay Netflix a monthly or yearly subscription fee to access all of the content on their platform. This model also includes new content when it’s released and ongoing support.
How does SaaS licensing work for businesses? The SaaS model is very similar for business software as it is for consumer services like Netflix. The business benefits because they spread out their costs over months or years instead of needing to invest a substantial amount upfront. The SaaS provider benefits from a consistent stream of revenue rather than cyclical bursts.
SaaS licensing models include:
A SaaS license agreement is the contract between the user and the SaaS license provider. So exactly what should be in a SaaS agreement? Everything that you’d expect to find in the fine print, from subscription costs to additional fees and service obligations. When negotiating with service providers, you’ll encounter the following types of SaaS contracts:
These contract types aren’t mutually exclusive. SaaS providers may combine several types of agreements into a single contract. For example, your agreement may contain both the terms of the subscription and the details of a referral program.
Is your team overwhelmed by the amount of SaaS contracts you have to track? You might be leaving money on the table.
The most effective method for SaaS contract management is to have a central point of control. For example, Lumos makes SaaS license management a breeze by giving you visibility into all of your apps—all in a single platform. This gives you an overview of two key data points: how much you’re spending on each SaaS subscription and how much your team is actually using each platform. With clear data on your side, you can cut costs by canceling unused services and enable your team to succeed by investing more in what they use most.
To learn how your business can improve software license cost tracking, book a demo.
Retaining a backlog of underutilized SaaS applications isn’t just confusing, it’s also bad for business. With Lumos, you can cut loose programs that no longer benefit you—and rid yourself of extra hidden costs that are dragging you down. Here’s how Lumos makes SaaS management simple:
It’s time for a change. Contact us today to learn how your business can trim unnecessary SaaS costs.