Zylo releases its seventh edition of the industry's largest SaaS benchmark report, uncovering trends in spend, adoption, and risk
INDIANAPOLIS, Jan. 16, 2025 /PRNewswire-PRWeb/ -- Zylo, the enterprise leader in SaaS Management, today announced the release of its 2025 SaaS Management Index, the industry's longest-running report on SaaS spend, adoption, and business risk. Now in its seventh year, the report analyzes data from over 40M SaaS licenses and $40B in SaaS spend under Zylo's management.
This year's index reveals a significant shift. For the first time since 2021, average SaaS spend and app count across organizations has increased.
"SaaS spend now averages $4,830 per employee, a 21.9% increase year over year," said D. Wayne Poole, Chief Operating Officer at Zylo. "Key factors driving this increase include vendor price hikes, more complex licensing models, and increasing AI investments. Without proactive management, costs will continue to rise unchecked. Organizations must take immediate action to control SaaS spending and reduce financial risks to maintain long-term sustainability."
Key findings from the report include:
- AI adoption accelerates, fueling both excitement and security concerns. Spending on AI-native apps has surged 75.2% year-over-year, but nearly 90% of IT leaders expressed concerns about security risks associated with AI tools.
- License waste continues to rise. Organizations are wasting an average of $21M annually on unused SaaS licenses, a 14.2% increase year-over-year.
- Rising costs per employee. SaaS spend now averages $4,830 per employee, a 21.9% increase year-over-year.
- Spend and portfolio size vary widely by company size. Smaller companies (1-500 companies) spend an average of $11.5M on SaaS and use 152 apps, while large enterprises (10,000+ employees) spend an average of $284M and use 660 apps.
- Complex licensing drives unpredictable costs. Two-thirds (66.5%) of IT leaders reported unexpected SaaS charges due to consumption-based or AI pricing models, complicating cost management.
"The spending surge of over 75% per enterprise year over year on AI-native apps makes the AI explosion very tangible, and it's only going to go up further in the years ahead," said Byron Deeter, Partner at Bessemer Venture Partners. "This tectonic shift in cloud technology, paired with the related changes in pricing and contract structures, makes it all the more important that organizations adopt a comprehensive SaaS Spend Management strategy."
A key trend revealed in this year's report is the increasingly decentralized nature of SaaS purchasing. Lines of business now account for 70% of SaaS spend, while IT is responsible for just 26.1%. This shift further reduces visibility, making cost management and governance increasingly difficult.
"The complexity of licensing models and the rapid adoption of AI are fundamentally transforming how SaaS is managed," said Ben Pippenger, co-founder of Zylo. "Organizations struggle with escalating costs and fragmented visibility across their SaaS portfolios. The need for a centralized, strategic approach to SaaS Management has never been more critical."
The report delivers actionable strategies to combat the rising tide of SaaS costs in the year ahead, including prioritizing high-impact apps and managing licenses and renewals programmatically. It also features predictions for 2025 and beyond, including AI's rapid growth, the shift toward usage- and outcome-based pricing models, and the growing need for FinOps and SaaS Management. Together, these insights emphasize the urgent need for organizations to proactively manage costs and prepare for the future of SaaS.
To access the full SaaS Management Index report and learn how Zylo helps organizations manage their SaaS applications, visit Zylo.com.
About Zylo
Zylo is the enterprise leader in SaaS Management. Companies such as AbbVie, Adobe, Atlassian, Coupa, Intuit, Salesforce, and Yahoo leverage Zylo's AI-powered platform and unparalleled professional services to fuel centralized SaaS inventory, license optimization, and renewal management.
With over 40 million SaaS licenses and $40 billion in SaaS spend under management, Zylo is fueled by more data than any other provider. Only Zylo's enterprise SaaS management platform delivers comprehensive and continuous visibility into your SaaS inventory alongside prescriptive insights and workflows that empower you to manage and optimize licenses and complex renewals. Alongside the platform, Zylo offers a suite of professional services to drive cost savings and avoidance through SaaS negotiations and manage your SaaS system of record with best-in-class strategy and execution to drive ROI and free up resources.
Having raised more than $72.5M to date, Zylo is backed by leading SaaS investors, including Bessemer Venture Partners, Menlo Ventures, Baird Capital's Venture Team, Spring Lake Equity Partners, High Alpha, GGV, Slack Fund, Salesforce Ventures, MassMutual Ventures and Coupa Ventures. To learn more, visit zylo.com.
Media Contact
Christina Wang, Zylo, 1 919-263-0962, [email protected], https://zylo.com
SOURCE Zylo
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