SaaS Management Mini Deep-Dive

SaaS to Manage SaaS. A Look Into What SaaS Management is and Some of the Key Vendors in the Space

Hey everyone 👋 — I’m Michael, a senior in college (WashU) and a founder of The Takeoff. Today, we are trying something a little different with our newsletter. When we started The Takeoff, we only did interviews (check out Hunter Walk, Sam Altman, Anu Hariharan). We then expanded to also share curated content with our audience. Today, we are trying something new: a Mini Deep-Dive. This post consolidates 150+ hours of research into a 20-minute read.

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My biggest takeaways:

  1. The SaaS Management space is big and growing rapidly.

  2. Techniques used to manage on-premise software don’t work in a cloud-based world. 

  3. As companies grow and adopt more and more SaaS applications, the need to deploy formal SaaS Management platforms rises as well.

  4. Distributed workforces create a need for IT teams to increase visibility into the apps their employees buy and use every day.

  5. SaaS Management started with a focus on spend management. Over time, compliance has become more and more of a focus. However, each platform has its own sweet spots and focuses.


Who Is This Post For?

  1. Investors. Learn more about a (hot) space and a bunch of (dope) companies.

  2. Founders. If you’re building a company in the SaaS Management space, this post will help you learn more about the space and some of your competitors. If you’re building a company in the space that’s not covered in the post, let me know. If you’re building a company in another space, SaaS Management is something you should be thinking about! Hopefully you already use a SaaS Management platform or have begun thinking about adding one (this post can help you decide which vendor is best for you!). If not, hopefully this post makes you realize how important SaaS management is for your business and is step one in your journey to finding the best vendor.

  3. IT. If your company doesn’t already use a SaaS Management platform, this guide will show you why it’s probably a good idea to start using one. And, this post can also act as a guide to the different vendors out there. If your company already uses one of the amazing vendors included in the post, let this post act as bragging rights!

  4. Talent. Looking to land a role at a high-growth startup? I’ve included a link to job openings at each company I discuss in the post. So, if one of the companies I cover sparks your interest, you can head over to their Careers page and see if you may be a fit! This is a rapidly growing space, with a few 🚀 vendors and rockstar founders and teams.

  5. Curious Minds. Some people (myself included) just like to learn. If you want to go from zero to somewhat knowledgeable on the SaaS Management space, then the 20 minutes spent reading this post will be well worth it.

  6. Others. Don’t fit one of the 5 criteria above? Comment below or dm me on Twitter (@mspiro3), and we’ll be sure to add another category here for our next Mini Deep-Dive posts! I have a feeling these may be helpful for a lot more people than I initially expected.

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Introduction

What is SaaS Management?

In its most basic form, SaaS Management can be thought of as SaaS to manage SaaS. SaaS Management platforms help IT operate more efficiently by automating internal workflows and proactively managing the SaaS within an organization’s tech stack

Early on, SaaS Management was primarily focused on spend management. Over time, SaaS Management platforms have expanded to other use cases. Today, most platforms offer spend management and compliance solutions, among a host of other features:

  • Real-Time Visibility. Track application usage and know what applications are in use across the organization, thus lowering shadow IT.

  • License Management. Monitor and manage the renewal process for SaaS applications.

  • IT Workflow Automation. Automate the workflow of IT to manage SaaS.

  • Spend & Cost Management. Manage and optimize SaaS spend.

  • Compliance. Ensure compliance standards are met.

  • Onboard & Offboarding. Ensure employees have smooth onboarding and offboarding processes with respect to SaaS. It can take up to 9 hours to offboard an employee from a platform! SaaS Management platforms can make this process both easier and less time-consuming for organizations and employees.

  • Optimization. This really encapsulates all of the other functionalities of SaaS Management platforms. But, in short, SaaS Management platforms help organizations optimize their SaaS usage: reducing spend, eliminating waste, increasing visibility, ensuring compliance is met, helping with onboarding & offboarding, managing licenses, automating IT workflows, and more.

Example of a SaaS Management Platform In Use

  • Person A works at Company X and decides she needs to use a productivity platform to optimize her workflow and performance. She purchases a license from Vendor Y, which costs her $10/month. She expenses this cost on her company card. 

  • Person A doesn’t use Vendor Y’s product much and, three months later, forgets she ever opened an account with Vendor Y. She decides to open a similar account at Vendor Z, which also costs $10/month. 

  • Now, Person A has premium licenses with two productivity platforms, costing her nothing, but costing Company X $20/month. 

  • Luckily, an IT employee at Company X decides to read this SaaS Management Deep-Dive and realizes the importance of using a SaaS Management platform. They adopt one of the great vendors highlighted below and, within an hour of use, realize that Person A doesn’t need accounts on two similar productivity platforms. They reach out to Person A to ask which account she would like to cancel, and the issue is solved!

Right Now: How Do Companies Manage SaaS today?

Companies that do not use SaaS Management platforms typically use spreadsheets to manage their SaaS. This is an inefficient and time-consuming way to manage SaaS and prevents IT from spending time and effort on other important things. As Geoff Charles, Head of Product at Ramp, wrote in his blog post Finance As A Service (FAAS) Stack for Modern Finance Teams (July 2020), "In early stages, companies don’t have a centralized procurement function. Spending happens amorphously, optimizing for growth and sacrificing chaos. Once you hit a certain scale, a centralizing procurement process is put into place to regulate what employees purchase…. But a few exciting startups are arising here focused on SaaS management…”

To learn more about how companies manage SaaS today, I asked Rak Garg, Investor at OpenView, to share some of his thoughts and knowledge on the space:

“More technical teams of admins might use public APIs for all of their tools to track usage & adoption, and hook into a CASB product like Bitglass or CloudSOC for data exfiltration and security. Neither are great solutions for the long tail of non-enterprise customers, though. Custom integrations based on APIs have to be continuously maintained and debugged, making it an option only for sophisticated companies with money and bodies to throw at manual audits. CASBs, on the security front, charge exorbitant per employee prices and are difficult to integrate into the stack. Most mature SaaS tools have billing & usage management centers that are specific to their platforms, but a horizontal player that crafts a story across silo’d tools could remove a ton of leg-work for the admin team.” — Rak Garg

Value Proposition: Who Uses SaaS Management Platforms and Why?

With rising SaaS adoption and a growing number of SaaS solutions on the market, “Modern IT work is more challenging than ever.” Increasing SaaS adoption poses a number of challenges for IT: how to manage all the SaaS tools within an organization, how to gain visibility into tools in use, how to manage compliance, etc. 

As software (and particularly SaaS) is eating the world (thanks Marc Andreessen!), SaaS Management is a must-have for many of today’s organizations. Without it, teams run the risk of facing compliance issues, having massive amounts of unnecessary spend, and running into a host of other inefficiencies related to their growing SaaS adoption.

While an organization’s IT function is typically the end-user of SaaS Management platforms, finance and procurement often also benefit from the use of such platforms. In fact, at many smaller companies, CFOs looking for tighter control on spend are the primary users of SaaS Management tools. As company size and stage develops, SaaS Management platforms typically become increasingly IT-facing.

Tailwinds: Long-Term Trends in SaaS Adoption and COVID

In a distributed world, IT is often no longer the decision-maker when it comes to buying SaaS. Today, many employees have the power to buy SaaS on their own, making it hard for IT to manage and see SaaS within their organization, leading to a host of other potential risks, and furthering the need for businesses to adopt a SaaS Management platform. 

The need for SaaS Management was evident well before COVID, but COVID has made this need increasingly more evident. Torii (a leading SaaS Management provider) suggests that COVID has led to a 300% increase in “usage of communication and collaboration tools.” 

While the true long-term impact of COVID on WFH is unknown, the need for formal SaaS Management solutions that help IT manage employees signing up for new SaaS tools remotely and manage remote device usage is clear. After all, with WFH, it becomes increasingly difficult for IT to know about new SaaS adoption happening within the organization.

Notably, even in pre-COVID days, massive amounts of SaaS spend was happening outside of IT. Zylo data from 2019 suggested that “more than 50% of all software spending occurs outside IT’s budget.” Intuitively, this makes sense, as bottom-up go-to-market strategies are becoming increasingly popular for many SaaS products. 

The graph below from Intello (another leading SaaS Management provider) shows several things that highlight the importance of SaaS Management: (1) the massive amount of SaaS spend within organizations and (2) the massive number of SaaS apps used within organizations. 

As both SaaS spend per employee and the total amount of SaaS spend within organizations continue to rise, the need for SaaS Management platforms becomes increasingly evident.

VC Funding: Who’s Investing in SaaS Management Startups?

Accel loves the SaaS Management space. They’re investors in BetterCloud, G2, and Productiv. Other notable investors are in the space, too: Animo Ventures (Intello), Bain Capital Ventures (BetterCloud), Bessemer (Zylo), Emergence (G2), Founder Collective (Blissfully), Flybridge (BetterCloud), High Alpha (Zylo), Insight (CoreView), IVP (G2), Menlo (Zylo), Norwest (Productiv), Resolute (Intello), Rise of the Rest (Zylo), Warburg Pincus (BetterCloud), and more.

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Why am I Bullish on SaaS Management?

It’s big, it’s important, it's growing rapidly, and early vendors have 🔥 early teams and founders

The SaaS Management space is only going to get bigger. SaaS is still in its early innings and will become the dominant means of software distribution. Whereas 10 years ago, companies still primarily used on-premise software, today, adoption of SaaS and the cloud is growing rapidly (BVP State of the Cloud 2020 Report). As SaaS adoption continues to rise well into the future, deploying SaaS Management platforms to manage other SaaS will become more and more important. Furthermore, as bottom-up go-to-market strategies become more prominent, the need for SaaS Management platforms only increases.

This tweet from Elliot Comite (Finance at Ironcladwho recently raised $100M from Bond) puts in perspective the growing importance of SaaS Management. If you spend a lot of time, effort, and money maintaining your clean office space, why not put similar resources toward managing your SaaS? 

Major players are carving out their own growth plans, whether IT-focused (via offering deep discovery and management options or focusing on deeper insights for just a few applications), or financed-focused solutions primarily helping organizations with spend management. This is a clear signal of a maturing market with lots of upcoming opportunity.

In sum, the SaaS Management space has the three features I look for most when evaluating a market or company: 

  1. A big and growing market. I always like to ask myself (a) how big is the market today and (b) how fast is the market growing. (Why? A market growing at 10% YoY will double in ~8 years. A market growing at 30% will double in ~3 years and be roughly 8x its current size in 8 years. Compounded growth matters!)

  2. It’s important. As SaaS adoption grows, SaaS Management platforms will shift from being nice to have to being an absolute necessity for organizations looking to work as efficiently and effectively as possible.

  3. Strong teams. The teams behind the existing vendors are phenomenal. The CEOs of almost all 9 companies I explore have previous founding experience. And, those who don’t have all been involved with massively successful SaaS and cloud businesses in the past as executives or investors. When software and IT leaders start attacking a space, you know they are after a big opportunity.



The Vendors

Methodology

Below, I explore nine vendors working to help IT teams tackle problems such as lack of visibility into SaaS apps within the tech stack (SaaS Sprawl), suboptimal SaaS usage, excess SaaS spend, and more. I also briefly mention a few newer SaaS Management platforms and other companies helping businesses solve some of the issues SaaS Management platforms are after, mainly spend management.

This post comes after weeks of research into the SaaS Management space. I also reached out (via cold email) to the CEOs of the nine companies I explore in this post. Four of them responded and hopped on Zoom with me to answer some questions and tell me about their businesses. I also spoke with Eric Glyman (CEO of Ramp) to learn more about Ramp’s new Vendor Management functionality. Side note: I had Eric on our podcast last week. Check it out: Substack | Spotify | Apple Podcasts | Anchor.

Vendor List

1. BetterCloud

  • What is BetterCloud?

    • "BetterCloud enables IT teams to discover, manage & secure the growing stack of SaaS apps in the digital workplace.

    • BetterCloud’s SaaS Management solutions allow organizations to gain visibility into what SaaS applications employees are using, helping boost efficiency and lower risk across the organizations.

    • BetterCloud provides solutions for SaaS Discover (App Discovery, Spend Reporting, Usage Analytics), SaaS Management (user lifecycle manager, spend optimization, application configuration, visibility & auditability), and SaaS Security (Least Privilege Access, File Security, Insider Threat Protection).

    • By helping IT teams discover the SaaS applications they have in their environments, BetterCloud allows IT to secure sensitive data that lives in these SaaS apps. In an increasingly cloud-facing world, this is becoming more and more critical, as a lot of important data lives inside different SaaS applications.

  • 1-liner: "One platform to discover, manage and secure all SaaS applications. More than 2000 IT teams trust BetterCloud to centralize and automate SaaSOps." — Website

From the CEO: “There are so many problems that SaaS Management platforms help solve. The market is going to get really crowded, really quickly. BetterCloud is the first at scale, but there have been a lot of 10-person startups that have raised a lot of funding recently.” — David Politis

2. Blissfully

  • What is Blissfully?

    • "Blissfully helped create and still leads the SaaS management category, though we see it as a part of a broader IT platform."

    • While Blissfully began with SaaS management, they have since expanded into a more holistic IT-platform, including functionalities related to system of record, workflows & automation, IT collaboration, and security & compliance.

    • Blissfully helps teams manage software, licenses, vendors, and workflows. In terms of SaaS Management, Blissfully:

      • Automatically discovers SaaS applications used throughout an organization.

      • Benchmarks SaaS spend and app usage against other companies.

      • Helps with spend reporting.

      • Tracks SaaS usage.

  • 1-liner: "Manage all your technology assets and workflows in one comprehensive IT platform." — Website

A note of the founding story: Prior to Blissfully, Ariel and Aaron had another startup together, Boundless Learning. At Boundless Learning, they had a lot of pains tracking IT and thought, “the tooling from an IT-standpoint to manage all of this [SaaS] was inadequate.” (per Ariel) So, they started Blissfully to help IT manage all of its needs in the age of SaaS.

3. Cleanshelf (acquired by LeanIX)

  • 1-liner: "Automated discovery, simple management and effective optimization to help you control your enterprise SaaS." — Website

Since writing this post, Cleanshelf was acquired by LeanIX. Cleanshelf is now known as LeanIX SaaS Intelligence.

4. CoreView

  • 1-liner: “#1 SaaS Management Platform for M365 & Other SaaS. CoreView offers EVERYTHING you need to protect, manage, and optimize Office 365 and other SaaS. Microsoft alone is not nearly enough." — Website

5. G2 Track

  • What is G2 Track?

    • G2 was founded to help companies buy the best software for their needs in order to ensure business success. G2 Track is one of G2’s several solutions geared to help buyers optimize their use of technology for their business.

    • G2 Track helps businesses manage and optimize SaaS spend, contracts, usage, compliance, and more.

    • G2 Track focuses on helping customers in four main ways: spend identification & monitoring (i.e. is there shadow IT?), usage optimization (i.e. are employees using the tools?), contracts (i.e. when are contracts up? are contracts on auto-renew?), and employee sentiment (i.e. do employees like the tools they use?)

  • 1-liner: "G2 Track allows you to manage software spend, contracts, account usage and compliance. All from one place." — Website

From the head of G2 Track:

G2.com paired with G2 Track empowers businesses to make technology buying decisions with confidence. G2 Track ensures businesses optimize their technology budgets to make their use of technology a competitive advantage.” — Tim Handorf

6. Intello (acquired by SailPoint)

  • What is Intello?

    • Intello helps companies and their IT teams master SaaS operations by managing SaaS discovery, usage, security, compliance, and spend.

    • Helping customers gain full visibility into their SaaS sprawl, Intello helps organizations:

      • Optimize usage of SaaS applications (cancel inactive licenses, gain insights into trends)

      • Monitor access and security and compliance (terminated user and IDP comparisons, access control, 3rd party permissions review, SSO enablement, etc.)

      • Manage spend (recover wasted spend, cancel redundant apps, manage budgets)

    • Similar to most other SaaS Management platforms, Intello began by primarily focusing on helping IT understand what applications were in use within their organizations. In the past couple of years, Intello has doubled down on an IT and security focus, expanding to include compliance components, workflows, customization options, access control, and end-user enablement features helping IT ensure all apps in use meet compliance standards and requirements. Their 2021 roadmap continues to follow this theme and they are promising major releases throughout the year.

Free resource guide from Intello on how to compare vendors when searching for a SaaS Management platform.

From the CEO: "The role of IT and discipline of identity management have changed drastically in the past few years with the explosion of SaaS and mass migration to the cloud. And that bottoms-up adoption of SaaS can be seen as a great thing — we’re growing Intello to enable the future of decentralized SaaS adoption at scale; to ensure every employee can get the right SaaS solution while staying secure, compliant, and optimized. 

IT and security teams are using Intello as the central platform to manage SaaS and their changing environment proactively. We've been listening to our clients and wrapping everything we do around their needs — staying true to this mission has fueled immense growth and the value our hundreds of clients are seeing every day. This is why world-class companies are choosing to work with us."Barak Kaufman

Since writing this post, Intello was acquired by SailPoint. Intello is now known as SailPoint SaaS Management.

7. Productiv

  • 1-liner: "Productiv is changing how IT teams manage SaaS applications with real-time engagement insights that enable application rightsizing and productivity gains" — LinkedIn

8. Torii

  • 1-liner: "Manage all your SaaS apps. In one single place. Torii lets IT professionals discover, optimize, and control their organization’s SaaS usage and costs." — Website

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9. Zylo

  • What is Zylo?:

    • Zylo helps IT leaders optimize their organization’s SaaS stack by gaining “transparency of SaaS spend, license utilization, and user feedback.”

    • Zylo acts as a system of record, allowing IT “to discover, manage, measure and secure their [organization’s] SaaS investments

    • With Zylo, organizations can better discover all the SaaS applications bought and used by employees, eliminate shadow IT, identify duplicate licenses and spend, manage renewals and licenses, and cut SaaS costs and risk.


Up-and-Comers

Most of these companies are more early-stage than the 9 vendors discussed above. The companies below offer a range of solutions for increased visibility into SaaS spend, usage, compliance, budget forecasting, etc. A few of these are US-based, though the majority are based outside of the US.

Augmentt:

"The platform to discover, optimize and fully manage your SaaS applications"

Billisimo:

"Save thousands on SaaS spend today, millions as you scale. Businesses using Billisimo do more with SaaS apps - manage subscriptions centrally, spend less, and monitor usage."

Custodian:

Custodian is an all-in-one platform that empowers IT teams to more effectively manage their software through an automated SaaS Discovery and a collaborative SaaS Management involving IT, Procurement, Managers & Employees.

Lumos:

Learn more here.

Oveo:

"This new age of SaaS won because it delivered better products, improved usability, more choices, lower costs and easier deployment. It also led to an explosion in the number of SaaS vendors across the entire technology stack, from core products like email and security to increasingly specific domain tools to optimise marketing, sales, product development, engineering and nearly every function...We want to humanize and simplify IT and technology management." — CEO Michael Fornander’s LinkedIn post

Plus:

*Still in beta*

Quolum:

“As software powers work eating up budgets as never before, Quolum is a new control plane to drive responsible spending and consumption.”

Trelica:

"Trelica’s SaaS management platform gives IT teams insight into what apps are in use and why, so you can make informed decisions about spend, information security & data privacy."

Welii:

“Welii allows smart IT and Finance teams to discover, optimise and forecast their SaaS Operations.”

Zluri (recently raised a $2M seed round):

Zluri is a comprehensive SaaS apps management platform for IT teams. It helps them Discover, Manage, Secure, and Comply with their 3rd party SaaS applications from an intelligent command center. In short, Zluri puts the IT team back in control of their new SaaS-ified landscape.


Non-SaaS Management Platforms Helping Manage SaaS Spend

As touched on earlier, there are a few non-SaaS Management platforms that help businesses solve some of the many problems that SaaS Management platforms help solve. In particular, the companies below all focus on helping businesses manage SaaS spend.

Airbase: Airbase is a spend management platform that offers companies a variety of spend management solutions, one of which being for SaaS. Using Airbase, organizations can “view spend by department, employee, team, or vendor in real-time. See company spend as it happens.

Cledara: Cledara is an all-in-one SaaS purchasing and management platform. Cledara helps organizations manage, control, and automate cloud software “so that [they] can scale [their] operational processes, comply with regulations and save money." In simple terms, Cledara is a card rewards program built specifically for software. Cledara allows organizations to issue virtual debit cards that can be used to purchase SaaS, helping with security, visibility, and compliance.

Ramp: Ramp is the first corporate card that is truly aligned with company success. They help companies spend less (seems counterintuitive for a corporate card, no?). Ramp’s Vendor Management feature allows companies to understand and manage their vendors in one place, allowing finance and IT teams to control recurring expenses and uncover shadow IT. Similar to Cledara, Ramp allows teams to issue virtual cards to help control spend. Ramp also helps companies know when they are subscribed to multiple software products that do similar things and actually indexes market prices for SaaS tools, allowing companies to see if they are paying more for a product than the going rate.

Others: A few other spend management platforms to keep an eye out for are Mesh Payments, Spendesk, Divvy, and Brex. I wouldn’t be too surprised if one or more of these companies builds out a feature specifically for SaaS spend management in the near future. 



Conclusion

Thank you to Ariel Diaz (Blissfully), Barak Kaufman & Kelsie Skinner (Intello), David Politis (BetterCloud), Eric Glyman (Ramp), and Tim Handorf (G2 Track) for your input and for working with me to get this to the finish line. Also, huge shoutout to Dana Iverson, Rak Garg, Corinne Marie Riley, David Spiro, Roshan Chandna, and Eva Steinman for helping make this possible too!

That’s all for our first ever Mini Deep-Dive! I know we covered a lot, but I hope you found it enjoyable. The SaaS Management space is f**king awesome and a handful of early vendors look really promising. If you’re looking to get involved with any of these companies as a full-time hire or intern, job listings for all are below and feel free to reach out to me if you want my thoughts on the different vendors and where you may be the best fit!

JOBS

BetterCloud, Blissfully, Cleanshelf, CoreView, G2 Track, Intello, Productiv, Torii, Zylo.

I’d love your feedback on the post. It means more to me than you can imagine. I’m a 21-year-old college student and have a long, long way to go in analyzing industries and companies. I’d love to learn from you about where I can improve. To leave feedback, feel free to leave a comment below or hit me up on Twitter

I hope you became a little smarter today and are now as in love with the SaaS Management space as I am!

Thanks for reading, and if you enjoyed the post, please consider subscribing (below) or sharing The Takeoff with your friends and coworkers.

Michael



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