2023 SaaS Trends – Consolidation

The number of SaaS apps per key category reduced by 11% and license usage increased by 2% in 2023, showcasing concerted SaaS app consolidation and license rightsizing efforts, but the average portfolio is still far from rationalized.


SaaS Consolidation Trends

Once you gain full visibility into the SaaS apps departments are using, how they use them, and how much they cost, you can start to identify opportunities for rationalization through license rightsizing and app consolidation.

The ease with which SaaS apps can be purchased and deployed has led to an increase in the number of SaaS apps used by every department since 2021. Not only that, but the number of SaaS apps per category (e.g. Project Management and Recruitment) has risen as well.

Though the overall three-year trend is up, between 2022 and 2023 we did see a reduction in the number of SaaS apps in key categories and the percent of license waste. This shows us that companies are starting to focus more on rationalization, but they still have a lot of work ahead of them.


Companies consolidated 11% of SaaS apps across key categories from 2022 to 2023, but opportunities remain compared to 2021 levels

  • SaaS sprawl picked up substantially from 2021 to 2022, with a 48% increase in the number of SaaS apps across these 14 key categories.
  • Between 2022 and 2023, there was actually an 11% decrease in the number of SaaS apps across these 14 categories as companies focused on identifying and consolidating duplicate SaaS.
    • Security & Compliance and Identify & Access Management were the least impacted categories.
    • Recruitment was the most impacted category.
  • Despite the recent dip, the number of SaaS apps per category in 2023 is still larger than in 2021, suggesting that more rationalization opportunities exist.

SaaS license usage improved across all segments since 2021 with an average license usage of 47%

  • While the biggest takeaway has to be that more than half of licenses continue to go unused over a 90 day period, there have been improvements in 2023, with the average percent of license usage increasing to 47% from 45%.
  • License usage increased across all segments, with the largest absolute growth in the mid-market (MM) segment, up 6 points to 49% from 43%
  • The small and medium-sized business (SMB) segment saw the highest levels of average license usage at 50%
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SaaS apps with the lowest license usage span categories; Greenhouse lags, likely impacted by a pullback in hiring in 2023

  • Many of the SaaS apps with the lowest license usage are point solutions, such as Greenhouse, Jira, PagerDuty, and DocuSign.
  • The list is not dominated by any one category in particular, with apps in Recruitment, Project Management, Sharing & Storage, and more showing low levels of license usage.
  • Greenhouse tops the list, dropping from 37% percent usage in 2022 to just over 20% usage in 2023.
  • It’s important to keep in mind some SaaS apps listed have ROI not tied to the percent of license usage. For example, examining the number of envelopes sent in DocuSign may be more useful.

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