The SaaS Waste Epidemic: Are You Losing $50K/Year?

Here's a shocking statistic: The average company wastes $50,000-$100,000 per year on unused SaaS subscriptions. For larger enterprises, that number can reach into the millions.

After conducting SaaS audits for hundreds of companies, I've seen this pattern repeat itself over and over. Let me show you where your money is going-and how to get it back.

The Anatomy of SaaS Waste

1. Zombie Subscriptions ($18,000/year average)

These are subscriptions that were purchased for a specific project or team member, but are still active long after they're needed.

Common Examples:

• Marketing tools from campaigns that ended 6 months ago
• Licenses for employees who left the company
• Trial subscriptions that converted to paid without anyone noticing
• Department-specific tools that teams stopped using

Real Example: A 50-person company had 23 active subscriptions that no one was using. Total annual waste: $47,000.

2. Duplicate Tools ($22,000/year average)

Different teams buying different tools that do the same thing.

Common Examples:

• 3 different project management tools (Asana, Monday, Jira)
• 2 different video conferencing platforms (Zoom + Teams)
• Multiple analytics tools with overlapping features
• Separate design tools when one would suffice

Real Example: A tech company had Slack, Teams, and Discord all with paid licenses. Consolidating to just Slack saved $28,000/year.

3. Wrong-Tier Pricing ($15,000/year average)

Paying for premium features that no one uses, or having too many licenses.

Common Examples:

• Enterprise plans when Business would suffice
• 50 licenses when only 30 are active
• Premium features that 90% of users never touch
• Add-ons that seemed useful but aren't used

Real Example: A client was paying $1,800/month for HubSpot Enterprise. After reviewing usage, they downgraded to Professional and saved $15,600/year-with zero impact on functionality.

4. Poor Payment Terms ($8,000/year average)

Paying monthly instead of annually, missing prepay discounts.

Common Examples:

• Monthly billing vs. annual (typically 15-20% more expensive)
• Not negotiating multi-year discounts
• Missing volume discount tiers
• Not consolidating billing for group discounts

Real Example: We shifted a client's top 10 subscriptions from monthly to annual billing. Average discount: 18%. Annual savings: $38,000.

The SaaS Audit Process

Here's how to conduct your own SaaS audit:

Step 1: Inventory Everything (Week 1)

Gather data from:

• Finance/accounting records (credit card statements, invoices)
• IT department records
• HR records (tools tied to employee provisioning)
• Department managers
• SSO provider logs (Okta, OneLogin, etc.)

Create a spreadsheet with:

• Tool name
• Cost (monthly and annual)
• Number of licenses
• Department/owner
• Last used date
• Contract end date
• Features used vs. available

Step 2: Identify Usage (Week 2)

For each tool, determine:

• How many people are actively using it?
• When was it last used?
• Are there usage logs or analytics?
• Could free or cheaper alternatives work?
• Does it overlap with other tools?

Red flags:

• Last login >60 days ago
• <50% of licenses actively used
• Features go unused
• No clear business owner

Step 3: Make Decisions (Week 3)

For each subscription, choose one:

1. Cancel immediately (unused, not needed)
2. Downgrade (wrong tier, too many licenses)
3. Consolidate (duplicate functionality)
4. Renegotiate (keep but get better pricing)
5. Keep as-is (essential, fairly priced)

Step 4: Execute and Prevent (Week 4)

Implement changes:

• Cancel unused subscriptions
• Downgrade or right-size tiers
• Renegotiate contracts
• Set up renewal alerts

Prevent future waste:

• Require centralized approval for new subscriptions
• Conduct quarterly reviews
• Implement SaaS management tools (Torii, Zylo, Productiv)
• Create a "tech stack map" showing all tools
• Offboard tool access when employees leave

The ROI of SaaS Management

Let's say you're a 50-person company spending $100,000/year on SaaS.

Typical savings after audit:

• 30-40% cost reduction = $30,000-$40,000/year saved
• Time invested: 20-40 hours
• Effective hourly rate: $750-$2,000/hour
• Ongoing savings: Year after year

Plus indirect benefits:

• Reduced vendor management overhead
• Simplified tech stack
• Better visibility into costs
• Improved security (fewer access points)
• Higher adoption of remaining tools

SaaS Management Tools

If you want to automate this process, consider these tools:

Enterprise ($500+/month)

• Zylo - Comprehensive SaaS management
• Productiv - SaaS usage analytics
• Torii - Automated SaaS operations

Mid-Market ($200-$500/month)

• Zluri - SaaS management & automation
• Intello - Usage tracking & optimization
• Cleanshelf - SaaS discovery & optimization

Small Business (Free-$100/month)

• SSO providers (Okta, OneLogin) - Free usage data
• Accounting software (QuickBooks, Xero) - Free expense tracking
• Spreadsheets - Free (but manual)

Red Flags You're Wasting Money

Watch for these warning signs:

1. No one owns the tech stack - No central authority on what's being used
2. Teams can purchase without approval - Decentralized buying leads to waste
3. No renewal calendar - Auto-renewals at list price
4. Multiple tools doing the same thing - Overlapping functionality
5. No usage tracking - You can't optimize what you don't measure
6. Employee offboarding doesn't include SaaS - Ghost accounts everywhere
7. No regular audits - Once-a-year or never

The Bottom Line

The average company reduces SaaS costs by 35% after their first audit. That's tens of thousands (or hundreds of thousands) in immediate savings-money that goes straight to your bottom line.

And it's not a one-time thing. By implementing proper SaaS management, you prevent waste from accumulating in the future.

Ready to uncover your SaaS waste? Book a free SaaS audit, and I'll show you exactly where you're overpaying.

Book Your Free SaaS Audit →