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Companies Are Slashing Their SaaS Spends, UBS Says 55

Posted by msmash from the closer-look dept.
Enterprise software optimization is accelerating as companies face potential budget freezes in 2025, according to new research from UBS reviewed by Slashdot. Following discussions with two leading SaaSOps vendors, analysts report that 21% of organizations cut their SaaS spend last year, with a staggering 30% of existing licenses sitting unused.

SaaS rationalization efforts are targeting familiar categories: collaboration tools (Zoom, Teams, Slack), project management solutions, and sales engagement platforms. Back-office systems like Workday remain relatively insulated due to their stickiness and pricing leverage, while front-office software faces mixed pressures. "Companies were looking to return to spend growth in 2HF25 from cost cutting but now that might no longer be the case," one CEO told UBS.

Companies Are Slashing Their SaaS Spends, UBS Says More | Reply

Companies Are Slashing Their SaaS Spends, UBS Says

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  • In the current economic climate (Score:3)

    by hey! ( 33014 ) on Wednesday April 16, 2025 @11:31AM (#65310079) Homepage Journal

    wouldn't you be putting the brakes on spending? Particularly on contracts for services.

    • Re: (Score:2)

      by Zocalo ( 252965 )
      Certainly. I'd expect a lot of people to be reviewing both corporate and personal {x}aaS and other subscription type costs at the moment, either because they are already feeling financial pressure or in case circumstances change. I fully expect the likes of Adobe, Amazon Prime, Microsoft, Disney, HBO, Netflix, etc. as well as traditional printed media and things like mobile services, to see a reduction in their active users while there's so much financial chaos going on.

      It's actually a good idea to tha

  • Is there seriously no ref link? (Score:3)

    by sloth jr ( 88200 ) on Wednesday April 16, 2025 @11:35AM (#65310087)
    News aggregation site should contain link to news ....

  • according to new research from UBS reviewed by Slashdot.

    No links, and this first line

    Interesting to say the least.

  • yeah no shit sherlock (Score:1)

    by Anonymous Coward

    SaaS sucks.

  • Companies are slashing spending, period (Score:4, Informative)

    by dskoll ( 99328 ) on Wednesday April 16, 2025 @12:01PM (#65310167) Homepage

    I mean, cutting spending is what you do if you anticipate a recession or a depression. And chaotic business conditions created by more-than-daily flip-floppery from the Trump regime don't exactly inspire investment confidence.

    • Re: (Score:3)

      by gweihir ( 88907 )

      Indeed. Without any way to do reliable planning, all you can do is reduce or cut anything you do not urgently need. That, incidentally, is how a deep recession can start. I guess the oragne moron will not be stopped until even the most stupid of his supporters begin to notice things are not working well...

  • Every vendor for every piece of software we have is trying to push us to SaaS but we're mostly not doing it.

    Yeah you save the cost of servers, but the increased scheduled costs usually erases any savings there, but also all the databases are not hosted off the LAN so any type of integrations or syncs have to at best be done using an API (which is inevitably more limited), or at worse just can't be done at all.

  • Can't imagine why (Score:2, Interesting)

    by whitroth ( 9367 )

    You mean they want to BUY software, not lease the use of it? Gee, how could that save money... oh, yeah, um,

    SaaS was a scam from the git-go.

    And that should read "spending", not spends.

    • Nope. They just want to rationalise their expenditure. Most of this move is a consolidation, not an ownership thing. Expect more of this "I heard you like Zoom, well we already have Teams included with our Office subscription so use that instead."

    • SaaS is not a scam. It is a really good model for some services. Who the fuck wants to manage their own chat servers? Who can actually beat the cost of GitHub for a team of 5?

  • Frustrating cycles (Score:3)

    by Baron_Yam ( 643147 ) on Wednesday April 16, 2025 @12:34PM (#65310249)

    You get a bunch of young people without enough experience and you propagandize them that SaaS is the cool new thing that solves all IT issues. You convert to an SaaS model and discontinue the old model, expecting enough of your customers to be locked in by the cost of migrating off your platform. Eventually, the negatives come to light as the vendors keep wanting more and more for less and less, because they love that recurring monthly income they can more or less just sit back and collect.

    It's just greed on the vendor side and apathy on the customer side. SaaS should only be for companies too small to afford their own infrastructure. It's not rocket science to leave a server running a VM or three in a closet in your office.

    Keep your data under your own control, only reach out to the Internet for the stuff you can't host locally - like access to someone else's database or whatever. Maybe go for a SaaS backup solution, though. That's probably worth it unless you have multiple locations with a dedicated pipe between them.

    • It's just greed on the vendor side and apathy on the customer side. SaaS should only be for companies too small to afford their own infrastructure. It's not rocket science to leave a server running a VM or three in a closet in your office.

      You don't just need to buy a few servers and licenses. You also need to also factor in the cost of employing someone competent (or the cost of paying a third party) to manage those servers, and arguably pay a premium for someone (or, again, a third party) who knows enough to manage that sysadmin and ensure that they are in fact competent. That ain't cheap. I don't know what you consider "too small" but I imagine you could get to hundreds of employees before it starts making sense, if you're not in an indus

      • >You don't just need to buy a few servers and licenses. You also need to also factor in the cost of employing someone competent (or the cost of paying a third party) to manage those servers, and arguably pay a premium for someone (or, again, a third party) who knows enough to manage that sysadmin and ensure that they are in fact competent. That ain't cheap. I don't know what you consider "too small" but I imagine you could get to hundreds of employees before it starts making sense, if you're not in an in

      • I wish SaaS was only used for smaller companies. What we see in reality is many large companies, with tens of thousands of employees, migrating to Cloud. Because.. I don't know why actually. They got sold on that idea of more flexibility, or someone said it would be lowest cost and they believed it. And now you have a huge corporate that lost control of their infrastructure, and one day will find themselves 100% at the mercy of another company. It's mind-blowing.

  • As an IT buyer and decision maker, I do my best to avoid SaaS, or anything that looks like forever increasing rent.

    If you have a SaaS platform and you do not provide public pricing, well fuck you. I'm not answering any questions about how much value I might or might not get from your software. If all customers pay a different price for your product then your product is not for me.

    • You make a really good point. I was in Maui on vacation a few year's back and most of the beach hotels in Wailea were sold out to an internal SAP sales team conference. The headline entertainment one night was a private Katie Perry concert. I'm certain the private pricing scheme you describe led to the kind of wealth SAP can lavish on their sales people.

  • It's infuriating but we're in the midst of this where I work, and guess what we are all told to use. Want to use Mural? Nope, Microsoft Whiteboard is included with O365 use that. We're terminating all our Mural licenses. I heard you like using Trello, well fuck your Trello you have 2 weeks to move it to Microsoft Planner or Microsoft Azure Dev Ops. Good news for people who are dependent on Docusign, we're rolling out Microsoft Sharepoint eSignature soon.

    I'm paraphrasing of course. Except for the good news b

  • Of course. SaaS represents a massive security flaw for any business in 2 major ways. The first way is that most SaaS solutions seem to require some form of persistent internet connection which increases cyber security risks. But the other way that no one really wants to address is that it creates a massive social engineering flaw.

    When a business is built around a SaaS solution, they're basically building a protection racket against themselves. That SaaS vendor can raise their prices, go out of business or
    • I'd say biz in general has lately become very lazy about protecting itself from mob tactics. *Cough* Broadcom VMWare *Cough* Second sourcing is really just not considered anymore it seems. And that sole source has you by the nuts and they squeeze.

  • It shouldn't be too difficult to find, but I can't stumble upon it.

    Seriously. Is Slashdot being used as a source of information (seeded)?

    Back in 2024 UBS mentioned this trend but didn't put a # to it.

    https://www.ubs.com/global/en/... [ubs.com]

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