Executive Summary

SaaS portfolios grew by 32% between 2021 and 2023 to reach an all-time high as organizations now use 371 SaaS apps on average; the average department now uses 87 SaaS apps. Even in a year of cost savings and scale backs, SaaS proliferation continues in companies of all sizes.

$9,643 per employee will be spent on SaaS apps in 2023 by the average organization, with small and medium-sized businesses (<500 employees) paying 49% more per employee than enterprises (>2,000 employees). This exceeds the $6,584 per employee cost for single healthcare coverage annually.

Only 47% of SaaS licenses are used over a 90-day period on average, though all segments have seen small year-over-year improvements in license usage as businesses increase their focus on license rightsizing and SaaS app consolidation. The larger the organization, the higher the levels of license waste — enterprises averaged 42% utilization while small and medium-sized businesses averaged 50% in 2023.

SaaS sprawl picked up substantially from 2021 to 2022, with a 48% increase in the number of SaaS apps across key categories. An 11% decrease in the number of SaaS apps in these categories in 2023 is evidence of consolidation efforts, but this reduction is small in comparison to the expansion seen in previous years.

Employees couldn’t keep their hands off of ChatGPT in 2023 as it featured in the top 20 SaaS apps used by Sales, Marketing, Product, Operations, Engineering, IT & Security, and Customer Success.

Methodology

The findings in this report are based on analysis of anonymized data from businesses using Productiv. We analyzed over 100 billion app usage data points across nearly 100 million SaaS licenses over 3 years to develop a comprehensive understanding of the state of SaaS in 2023.

Productiv tracks SaaS application usage by aggregating and joining data from HR systems, finance and expense management systems, and contract management systems and files, as well as integrations with SaaS applications, Single-Sign-On (SSO) tools, and Cloud Access Security Broker (CASB) providers.

Shadow IT, or what our platform refers to as Discovered Apps, is based on non-managed applications with a data source from 1) an expense or finance system, 2) network monitoring tools, or 3) Google single sign-on (SSO). 

Teams across organizations have been mapped to eight business functions (Sales, Product, Operations, Marketing, Information Technology & Security, Engineering, and Customer Success).

Organizations have been segmented into three groups: small and medium-sized business segment (250 - 500 employees), mid-market segment (500 – 2,000 employees), and enterprise segment (>2,000 employees); average customer size of ~5,700 employees. The Productiv customer base is mainly focused in the following industries: Technology, Media, and Business and Financial Services.

About Productiv

This employee-centric, data-driven approach combines billions of employee app usage data-points with vendor contract and organizational data, enabling teams to easily come together to govern and rationalize SaaS portfolios while streamlining procurement. Founded in 2018 and backed by Accel, IVP and Norwest Venture Partners, Productiv is on a mission to align IT and business leaders to unlock the most value out of their SaaS portfolio at scale.

Productiv is the only SaaS Intelligence™ platform for the modern enterprise. More than a SaaS management solution, Productiv aligns IT, procurement, finance, and business leaders with trusted data to optimize spend and drive operational excellence across SaaS portfolios.