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LESS THAN HALF OF COMPANY SAAS APPLICATIONS ARE REGULARLY USED BY EMPLOYEES

1
By CIOReview | Wednesday, September 22, 2021
Share

Productivs State of SaaS Sprawl Report Reveals Companies Lack Visibility into
Digital Employee Experience, Potential Security Gaps and the True Value of Their
Apps

PALO ALTO, CA - New data from Productiv, the leading provider of SaaS management
solutions, indicates that business investment in SaaS applications continues to
climb despite widespread underutilization of app licenses by employees.
According to Productivs report, on average only 45% of company apps are being
used on a regular basis. The data also shows 56% of all apps are Shadow IT, or
owned and managed outside of IT. Productivs new report is based on analysis of
hundreds of active instances of the Productiv platform, including data on more
than 30,000 applications.

The SaaS market has been growing ever since Amazon built the first public cloud
and is projected by Gartner to be nearly $140B by 2022. SaaS tools became even
more critical in 2020 as remote and hybrid work skyrocketed and tools like Zoom
and Slack became essential for team collaboration and communication. But the
rapid growth of SaaS can lead to SaaS sprawl, and every SaaS purchase outside of
IT has the potential to expand a companys security risk and create fragmentation
that prevents employees from doing their best work. SaaS sprawl can also
drastically impact business spend: using too many team-owned tools can lead to
unregulated budgets and an increased cost of ownership due to situations like
missed renewals.

No company is saying they intend to have less SaaS in the future, said Jody
Shapiro, CEO and co-founder of Productiv. Our new report reveals many businesses
may have a much larger blind spot than they realize when it comes to their SaaS
portfolio. CIOs and IT teams need to understand the complete picture of apps
they have, what value their employees are getting out of those apps and how
those apps affect their security and compliance standards.

The average company has 254 applications, but regular usage among employees
remains low

According to the new Productiv data, the average company has a whopping 254 SaaS
apps (with enterprises averaging 364 apps). However, the average app engagement
over 60 days was 45%, revealing that less than half of licensed employees are
regularly using the apps available to them. Interestingly, tools purchased
outside of IT had a higher average percentage of engagement at 54%. This
indicates that employees are finding more value in the tools they select for
themselves.

Most departments now have 40-60 tools each, yet cross-functional apps dominate

The report findings show the majority of teams have between 40 and 60 apps, with
a few outliers. The Security, Engineering and IT departments lead in average
number of apps, with 78, 77 and 61 apps, respectively. Productiv also looked at
how different departments use top function-specific apps. The data reveals
Atlassians software suite is a top-used tool across 11 departments. Other
function-specific apps like DocuSign, Zendesk and Lucidchart also appeared as
top apps across multiple teams.

The majority of apps have 3 or fewer security certifications, while SSO use
across IT-owned apps is high

Productivs analysis found 83% of tools were compliant with less than half of the
7 most common certifications. Shadow IT had fewer certifications on average
compared to apps managed by IT. SSO is a key tool organizations are using to
provide governance and access control, and more than half of all IT-managed apps
are behind SSO. Enterprises with more than 2,000 employees had the highest SSO
coverage across their apps, which may be the result of more robust security
protocols.

SaaS sprawl is the norm and is most prevalent among high-growth businesses

Productivs report found that 56% percent of SaaS applications are not owned or
managed by a company IT department. This data suggests that employees as well as
individual business units are directly purchasing or signing up for tools on
their own. Small organizations have the highest percentage of sprawl, possibly
because they grow more quickly, with faster-evolving SaaS portfolios. The new
data found the following breakdown of Shadow IT by business size:

• Small (less than 500 employees): 68%

• Midsize (500-2,000 employees): 52%

• Enterprise (2,001+ employees): 52%

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