SaaS audit costs rise, tech stack visibility declines
Flexera's annual IT asset management report shows that enterprise SaaS audit costs continue to rise while tech stack visibility declines. Nearly half of surveyed enterprises have spent over $1 million on software audits in the past three years, and only 43% have full tech stack transparency. As cloud services and AI drive consumption-based pricing, management complexity increases, prompting FinOps and ITAM teams to seek collaborative responses.
Briefing
- According to a Flexera survey, enterprise SaaS vendor audit costs have risen over the past year, while visibility into increasingly complex technology stacks has declined. The software company conducted its annual survey of more than 500 IT professionals.State of IT Asset Management ReportSurvey.
- Nearly a quarter of enterprises have faced software vendor audit costs of $5 million or more in the past three years, and nearly half have spent at least $1 million, up slightly from last year. Only half of respondents reported clear visibility into SaaS usage, while the share reporting full technology stack transparency fell 4 percentage points to 43%.
- With the surge in cloud-based IT services, interpreting billing data has become a major challenge, Flexera Chief Product Officer Becky Trevino told CIO Dive, a sister publication of CFO Dive. "The level of complexity is growing," Trevino said. "Most SaaS management has revolved around user-based licenses, but with AI entering the picture, consumption-based pricing is really taking off."
Deep Insights
Cost optimization remains a moving target for many IT leaders. As software moves to the cloud, new features come online, and vendors adjust licensing policies, managing technology spending can become a game of whack-a-mole, with new problems constantly replacing old cost concerns.
This trend is reflected in the pain of software rights, which jumped to the top of enterprise pain points this year, Flexera found.
"The scope of responsibility for software asset managers keeps expanding," Trevino said. "You solve one problem, and new ones pop up."
Over the past few years, FinOps practitioners have expanded their focus from cloud spending to software services. Since Flexera's 2023 survey, the share of organizations prioritizing SaaS cost savings has risen by 7 percentage points, and the share rationalizing contracts has risen by 8 percentage points over the same period.
FinOps and ITAM teams approach cost control from different perspectives. FinOps tracks usage to link costs to business value, while ITAM reviews vendor contracts and seeks to eliminate wasteful redundancy.
Pain points are converging around the cloud. According to analysis released by Cast AI earlier this year, overspending on Kubernetes deploymentsremains widespread. Java platform provider Azul found that most organizations are dealing withunexpectedly high cloud infrastructureand application costs.
In the Flexera survey, more than three-quarters of respondents said managing cloud environments, including containers, is a challenge for software asset management.
There is still hope for organizations working through this issue, Trevino said. "Mature practices are creating teams with FinOps expertise and strong licensing experience to turn chaos into order," she said.
JuneThe alliance between the FinOps Foundation and the ITAM Forumis advancing this process.
"We are launching a series of working groups and best practice sessions, bringing experts from the ITAM space together with our FinOps experts to figure out how to codify this into a consistent set of best practices," FinOps Foundation Executive Director J.R. Storment told CIO Dive.
"On the FinOps side, we have billing data, but we lack visibility into contract renewals and compliance—historically that belongs to ITAM," Storment said. "Combining the two is like a match made in heaven."