Why your software bills are huge after SaaS?

Few months back while demoing Profitboard to one of our client, I found an interesting trend. I looked at their SaaS subscription payments which were of significant size. Curious to know will we survive as a SaaS company (:P), I stared investigating.

We took many of our customer’s spending data of the SaaS software and tried to understand what kind of SaaS is increasing revenue inside the same organisation and what are the software they are quiting. We realised the spending on usage based softwares have gone stagnant after a point of time, but the softwares who charge on the per user basis, those can easily find increase in spending on them. But that’s not why I’m writing this blog. Let me explain why I’m writing this blog.

I discovered an interesting pattern, for many organisation even though the spend has grown, but they are not spending more on people!!!!!

Wait! What? Then as I was understanding the SaaS spend data vs Employee spend data over the period to try to find what’s happening, you’ll be shocking to know now companies are spending equivalent amount of money on software. Which is scary.

 

I was thinking why so? While comparing the data I realised, they actually spending less on people now.

So the big questions arised, “Are softwares eating human jobs?”

We started understanding the growth in terms of revenue or operations or service to customers. The trend was good.

The money is coming from growth. They are spending lesser money on people while spending for the efficiencies and for growth, and so while many IT managers feel their IT cost has increased significantly, they are actually living in past where inefficiencies and lesser revenue were accepted for lesser automation. So you don’t need to worry, you can afford it quite well.

Here is a comparative data, where they are spending this on humans now:

And this is what they are spending on the software:

Almost half of the spending on humans now

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