At Pendo, we turned to our own platform to solve this challenge, cutting SaaS spending by 30% while simultaneously minimizing operational risks associated with an overcrowded tech stack.
In 2023, companies spent over $9,000 per employee on SaaS, with more than half of those software licenses remaining unused for over 90 days. With user spending projected to reach $1 trillion by 2027, businesses are taking a critical look at their software investments.
Faced with growing SaaS expenses that outpaced productivity gains, Pendo’s VP of Technology, Enrique Jenkins, took a data-driven approach to meet this challenge for the company. He and his team used Pendo to conduct a comprehensive analysis of our software tools, uncovering inefficiencies and opportunities for strategic optimization.
Looking under the hood
The Pendo IT team started by looking at all SaaS-based applications in use. With an 800+ person company spanning multiple countries, the team had a lot of data to review from a wide variety of software tools.
To gain insight into our software usage and activity, we deployed Pendo for employees via a Pendo extension on all employee devices so individual employees could designate what web-based software to track. It was crucial to track more than logins for each application. Pendo enabled IT to view usage data within each application. With this level of insight, the team could assess what kind of impact employees may experience if the company were to change or eliminate certain tools.
A clear usage picture emerged.
Jenkins’ team found duplicative software tools, under-used programs, and a general lack of organization around our internal software. Different teams used similar tools, some software was almost never used, and Pendo was often left with little leverage in negotiations when reconfiguring or expanding important contracts with other software companies.
Taking action, informed by data
With our new data-backed insights, the IT team uncovered opportunities to reduce tools and spending across multiple teams. We also uncovered discrepancies between some vendor’s data and our own.
For example, one vendor claimed that Pendo’s usage of the software was up. The vendor recommended we add more licenses, which would have increased our spend on the tool by 50%.
However, Pendo’s usage data told a different story. Internal usage was actually down, enabling Pendo IT to reduce spending on those licenses and save money.
“Pendo’s insights prevented unnecessary license additions, helping us cut SaaS costs by nearly 30%,” says Jenkins.
We also leveraged Pendo data to determine how switching collaboration software vendors would impact our spend. Even though the contract agreements between the two vendors were similar, we determined the change management workload to move to a new vendor would be significant. Pendo license utilization data enabled the team to make a fast decision without having to seek manual input from multiple teams.
Insights that lead to real action
When the IT team was ready to migrate employees from lesser-used applications, they leveraged Pendo’s In-app Guides to message and educate users on which tools they should use and how. By the end of the fiscal year, we successfully migrated all employees to the preferred software tools.
Armed with real data, the Pendo team successfully countered a critical vendor requiring a 50% price increase and reduced overall SaaS spend by 30%. Using Pendo, Jenkins and team were able to make dramatic improvements to our tech stack and position us to maintain that efficiency into the future.
If you’re looking to drive business value through vendor consolidation, check out our collection of articles on the topic. You’ll learn how to cut your product stack costs without cutting your capabilities.
