SaaS products have changed how organisations work. For every possible question of efficiency, there is a developed or developing SaaS product as an answer and a software license that follows behind.

As of 2024, more than 30,000 SaaS companies exist worldwide, and end-user spending has grown substantially and is expected to reach $208 billion by 2024. Software-as-a-Service (SaaS) accounts for approximately 70% of software usage in companies and will only increase.

Organisations today rely heavily on SaaS solutions to
1. Streamline business operations
2. Improve productivity
3. Enhance customer experience

With all these SaaS applications come thousands of user licenses, which is becoming increasingly difficult.

In this article, we will explore all things related to SaaS licenses.

Table of Contents
1. What is a SaaS license?
2. What are the types of SaaS licenses?
3. What is software license management?
4. Why is SaaS license management crucial for organisations?
5. Challenges of SaaS license management + Bonus: Free SaaS License Management Template
6. How do software license tools help your organisation manage SaaS licenses?
7. 5 software license management tools
8. Conclusion

---

What is a SaaS license?

SaaS license is a type of software license that lets the user access the software on the cloud in exchange for a periodic subscription fee. Unlike traditional software you install on a device, SaaS exists in the cloud, and you can access it using a mobile application or a web browser. A strong SaaS contract guarantees a seamless deployment process in both directions by defining all parties’ rights, rules, and obligations.

Usually, a SaaS license contains instructions for the client and the software provider to follow. It might explain, for instance, how usage-based pricing operates, which means how many company users can utilise one license. It can also specify service level agreements in which software vendors commit to a given uptime.

Unlike traditional software licenses, you cannot purchase and own the software with a one-time payment. A SaaS license is an ongoing commitment. As long as you pay for it, you can utilise it.

What are the types of SaaS licenses?

The following are the common types of SaaS licenses available:


With a SaaS subscription, you don’t worry about maintaining the software, as the service provider handles it. It comes with different pricing models:

With so many tools and software licenses to manage, numerous companies experience either underutilisation or over-licensing of SaaS applications. This is where SaaS License Management comes in.

Protip: Use SaaS management tools to automate license management processes, track usage and costs, and optimize SaaS spending. A right-fit SaaS license management tool can lead you to higher success.

What Is Software License Management?

SaaS license management refers to managing software licenses for various applications used in an organisation. It offers better visibility and accountability of the SaaS platforms your business is using. SaaS license management involves:

• Monitoring the number of licenses purchased
• Software license tracking and application usage
• Managing license renewals and tracking expiration dates
• Allocation of software licenses to departments and users
• Guaranteeing software compliance with regulations
• Managing license costs to avoid overspending

SaaS license management aims to make sure that your organisation has the right number of licenses for its needs while avoiding unnecessary expenses on additional licenses that aren’t in use. Let’s explore the importance of SaaS license management for organisations. 

Why Is SaaS License Management Crucial For Organisations?

Spending on SaaS is growing irrespective of the organisation’s size. Global spending has grown more than 5x in less than a decade.

As per Gartner, the IT operations department could have over 25% of software licenses unused at any time.

Effective SaaS license management is crucial for organisations to:

• Get visibility on the number of licenses deployed across your organisation: You can centrally manage SaaS licenses to achieve complete transparency. Centralised SaaS license management gives you better visibility into your organisation’s SaaS application usage and license inventory and allows you to track license usage, costs, and renewals. 
• Identify duplicates or unused licenses: With a centralised view of all the licenses, the IT department can easily identify duplicates or unused licenses. Companies can eliminate duplicate and unused licenses and save costs while using software more efficiently. 
• Track renewals to optimise cost: Software license management solutions monitor license renewals and send alerts. Centralised visibility also provides license usage and cost data, which can help your team analyse whether renewal is justified and negotiate to save more in the next subscription cycle. 
• Understand license usage and compliance: A centralised view of all licenses across the organisation makes it easier to track usage and ensure compliance. Companies can identify areas where over or under-licensing may have happened and make informed decisions about future license purchases. 

Note: Noncompliance with SaaS agreements can lead to legal issues and financial penalties. Having all the details in a single place enables organisations to identify potential compliance issues quickly and avoid the risk of fines or disputes. 

• Optimise the contract to reduce wastage and enhance security: SaaS licenses can be easily scaled up or down, offering flexibility. Effective SaaS license management enables your organisation to scale your actual software usage as you grow. So, companies pay for the licenses they need anyway. Regular contract review also helps analyze existing licenses and renegotiate terms and pricing to get an agreeable end-user license agreement. 

Furthermore, companies can take advantage of volume discounts, resulting in significant cost savings. If you use many licenses for the same features, you can renegotiate the contract and get a discount on the number of licenses.

While SaaS licensing management can make things easier and directly impact eliminating SaaS waste, it also comes with multiple challenges. 

Challenges of SaaS License Management + Ways to Prevent it

As SaaS license management becomes increasingly important, it becomes more complex and challenging, specifically for large organisations with multiple users and SaaS vendors. 

When an organisation fails to manage its SaaS licenses effectively, it encounters numerous issues. 

Siloed information on SaaS licenses

With many departments purchasing tools, a plethora of vendors to manage, many stakeholders who purchase software tools themselves, and multiple licenses available, it is difficult for IT teams to keep track of licenses. Departments fragment information, and some business heads take responsibility for software purchases. Siloed SaaS usage data renders data-backed decision-making impossible.

How to prevent it:

Streamline buying processes, putting all stakeholders in sync. Develop a process for managing SaaS licenses, including assigning ownership and responsibility for managing licenses, monitoring usage, and tracking license renewal dates.

With Wyzard’s AI-powered Contract Vault, you can consolidate all of your contracts in a single, secure, encrypted repository that is subject to granular access controls rather than contending with disorganised folders and disparate files. This mandates that only authorised personnel have access to sensitive information. Uploading and organising documents is effortless with Wyzard’s drag-and-drop functionality.

However, things take a turn for the better at this point: Wyzard’s AI engine intelligently extracts and structures critical data from your contracts, enabling you to organise them in a meaningful manner. It eliminates manual effort by automatically identifying and categorising critical terms, clauses, conditions, and metadata throughout any software license agreement.

Identifying wastage is tough due to blind spots

Companies know how many licenses they have purchased, but do they know whether they are using these purchased licenses to their full potential? Information is scattered across departments, and there is no visibility into SaaS usage. Another blind spot is the lack of awareness of the actual cost of SaaS licenses. Since SaaS subscriptions may be based on usage, it is likely that software users cross usage limits and get billed extra. 

How to prevent it: 

Monitor SaaS usage and costs regularly to identify any unusual spikes in usage or unexpected costs. This can help your organisation optimise SaaS usage and avoid unnecessary expenses.

Wyzard’s AI-powered insights disclose practical ways to save your expenses. The platform finds underused licenses, hidden programs, and duplicate applications, thereby helping you to cut these causes of waste of money and stop unnecessary spending.

Wyzard’s robust search and filtering capabilities enable you to effortlessly locate precise information, including auto-renewal terms, payment schedules, and any other clause, with minimal effort.

Pricing/ contracting/ compliance – lack of understanding of SaaS

Another blind spot is the lack of awareness of the actual cost of SaaS licenses. SaaS products are priced based on various complex license models, and usage is difficult to predict. Users may unknowingly overuse a tool and get billed extra. 

How to prevent it: 

Get an org-wide view of SaaS licenses. Start by conducting a complete audit of your SaaS applications to understand the number of licenses in use, how they are being used, and who is using them. This can help your organisation identify underutilised licenses and optimise your SaaS spending.

Wyzard provides a comprehensive overview of your SaaS portfolio, facilitating data-driven results and optimised resource allocation.

Wyzard’s “Discover” feature offers a proprietary database of software license management solutions that provides transparency into product features, pricing models, and industry-specific use cases. This ensures that you select the best-fit options for your requirements.

Furthermore, Wyzard’s cloud software procurement advisory team employs established strategies to negotiate favourable contract terms and optimal pricing.

Wyzard’s centralised management capabilities provide comprehensive visibility into contractual obligations, software usage patterns, and spend dynamics once you implement your software license management solution. By utilising these insights, you can proactively identify license optimisation opportunities, eliminate redundancies, and ensure compliance throughout your SaaS portfolio.

Unwanted licenses get renewed without renegotiation 

Many SaaS vendor agreements have auto-renewal clauses. Not having a centralised view of the SaaS license repository can result in missing deadlines to cancel or modify licenses. If organisations fail to track software licenses’ usage and renewals, unwanted licenses can get renewed automatically without review. 

How to prevent it: 

Figure out the tools in use and tools that deliver efficient contributions to your company, and have an analysis that provides valuable input to decide on the placeholder. As a cost-cut measure, decide pricing based on your SaaS usage to negotiate with vendors. You should negotiate with SaaS vendors for the best possible price and contract terms. This can include negotiating volume discounts, longer contract terms, and favourable renewal terms.

With SaaS spend management tools such as Wyzard, it is possible to monitor the utilisation of your SaaS systems in terms of Teams, Categories, and Vendors. They help you determine whether to cancel the subscription or shift to a lower price tier by identifying your underutilised tools. You can also easily recognise every SaaS application your employee uses and remove an employee’s license when they leave the firm, avoiding needless expenses and perhaps security risks resulting from illegal access.

Do you need the auto-renewal terms of the previous year’s vendor? Payment schedules that span multiple contracts? The AI-driven organization has made it all accessible to you.

There will be no more need to navigate virtual folders or scan pages when it is time to renew. By utilising a secure, intelligently organised, and centralised vault, you can proactively manage contract lifecycles, ensuring that the information you require is easily accessible and retrievable at the appropriate time.

Want to reduce the cost spent on SaaS without the help of tools? Here is our simple cheat sheet for proper planning, inventory tracking, and management to reduce waste. DOWNLOAD NOW!

How do Software License Tools Help Your Organisation Manage SaaS Licenses?

Statistics show that companies use only 49% of their licenses purchased, which shows a gap in procurement and software license usage. Effective software license management tools can help you analyse your software purchasing pattern and act accordingly. It also helps in cut-cost reduction.

Wondering how much can your organisation be saving on SaaS?

NOV Inc., a Houston-based global leader in oil and gas drilling services, faced the challenge of managing software assets and licenses across its diverse divisions, especially after mergers and acquisitions. With 7,000 users and different application suites, their initial manual approach to software inventory and custom reporting proved too complex. In 2010, NOV’s Corporate Engineering Technology division deployed OpenLM. After a year of testing, they significantly reduced their engineering software seat count and saved server million USD. For example, with Autodesk alone, they avoided a double increase in spending.

Over the next 10 years, NOV saved several million USD using OpenLM. One notable instance involved purchasing new tools for engineers that went unused for six months, helping the company to cut costs by hundreds of thousands of dollars in maintenance over the next 3 to 5 years. OpenLM’s reports helped NOV consolidate CAD, FEA tools, and USB device licensing, improving visibility into actual usage. Monitoring software inventory and key vendors such as Autodesk, Solidworks, Siemens NX, and Ansys, OpenLM has proven beneficial in managing NOV’s software assets.

5 Software License Management Tools

Let’s look at 5 software license management tools that can help your company prevent unnecessary risks when managing software licenses.

Companies	USP	Pricing	Free Trial
Wyzard	Advanced capabilities for optimising and managing software assets through a data-driven, analytical approach. Wyzard offers powerful tools for software license tracking, automating license compliance to prevent installing unauthorised software, and providing strategic insights to optimise license utilisation and software installations.	Upon Request	Yes
Zluri	Automates SaaS management, helping businesses identify, manage, optimise software, and ensure compliance while reducing costs and increasing productivity.	Upon Request	No
Spendflo	Ease of deployment, seamless integration with existing systems, and actionable insights that help organisations efficiently manage their software assets and optimise contracts.	Starts at $18000 / year	Yes
ServiceNow	Automates workflows across departments, offering integrated solutions that reduce costs, improve efficiency, and enhance employee and customer experiences.	Upon Request	No
Zylo	Provides full visibility into SaaS usage and spending, enabling cost optimisation, risk mitigation, and improved operational control across software portfolios.	Upon Request	No

Wyzard

Wyzard’s software license management can provide holistic services in managing your company’s SaaS licenses. You can leverage Wyzard’s data-driven smart SaaS management tool to save money on unused or underutilised licenses. Wyzard also provides automated renewal updates so you can pay for only what is needed and avoid overspending. Wyzard’s AI-powered insights and analytics track active users and feature utilisation to detect the overuse or underuse of tools; with this, you can maximise ROI and identify cost-saving opportunities by properly tracking SaaS licenses.

Zluri

Zluri presents a SaaS management platform (SMP) with software license management capability. It helps eliminate shadow IT in your company and gives you a total view of your software assets and licenses. 

In one view, Zluri lets you view your software stack, who is using it, what kind of licenses you have, how many you have, and how much you are paying. Moreover, you can track programs that enable you to maximise your software licenses and lower your software expenditure, thereby enabling your team to handle software assets effectively.

Spendflo

This software license management platform simplifies the process by Automating SaaS subscriptions, procurement procedures, and software licensing. It helps teams in operations and finance to control their SaaS expenses and negotiate better contract terms to match real demands.

Spendflo offers a platform that streamlines SaaS spending tracking, subscription renewal management, and software license distribution optimisation. This guarantees financial effectiveness, helps prevent needless expenditures, and maintains vendor license compliance.

ServiceNow

Combined with the ServiceNow platform, this technology streamlines software license management tasks. It guarantees licensing compliance, automates software lifecycle management, and offers insights into software expenditure, helping companies lower expenses and minimize compliance risk. This platform’s software license management lowers compliance risk and costs by streamlining software lifecycle management.

Zylo

Zylo’s SaaS management platform helps companies optimise software usage and reduce costs. It provides automated solutions to maximise SaaS licenses and control renewals with a thorough and continuous inventory of applications.

Zylo finds and normalises contract, licensing, spending, and usage data for managed, unmanaged, and shadow IT. This allows organisations to maximise the SaaS license, cut waste, and pay for what is actually needed. It also helps companies to sort SaaS inventory to cut duplicates and minimise redundancy.

Conclusion

Software license management includes numerous components, including software license compliance, optimisation of license usage to reduce IT expenditure, and consistently monitoring software licenses to reduce expenses.

An effective software license management tool can streamline the process. While they consolidate licensing agreements, platforms like Wyzard offer much more with AI-driven insights to evaluate which software renewals are worth keeping and which need adjustments. Automatic reminders ensure you stay on top of expiring contracts, so you’re always prepared.

Take control and maximise your software investment—schedule a Wyzard demo today!

References:
– https://finance.yahoo.com/news/2024-saas-management-index-reveals-130400303.html
– https://cdn.openlm.com/wp-content/uploads/2024/02/OpenLM-case-study-NOV-a-final-version_January-2024.pdf
– https://explodingtopics.com/blog/number-of-saas-companies