SaaS Licence Optimisation: Reducing Software Waste

SaaS Licence Optimisation: Reducing Software Waste

Software-as-a-service has transformed how organisations buy and use software, but it has also introduced a problem that few anticipated: invisible, persistent waste. Unlike on-premises licences, which were typically bought once and tracked carefully, SaaS subscriptions are easy to purchase, easy to forget, and easy to leave running indefinitely. This article explains the problem of SaaS sprawl, how to identify waste, and the practical steps to reclaim unused licences.

The Problem of SaaS Sprawl

A typical mid-sized organisation now uses dozens, sometimes hundreds, of SaaS applications. Marketing teams buy survey tools, design teams subscribe to prototyping platforms, developers spin up cloud-based databases, and every team seems to acquire its own project management tool. Procurement is often bypassed entirely; many SaaS vendors accept corporate cards and require nothing more than an email address to start a trial.

The result is sprawl: more applications than anyone is aware of, paid for through multiple cost centres, with no central record of what is owned, who is using it, or whether it is still needed.

SaaS waste takes several forms:

• Unused licences. Seats assigned to users who never log in, often because they changed role or left the organisation.
• Over-provisioned plans. Premium or enterprise tiers where the standard plan would suffice, retained from a time when the features were needed.
• Duplicate tools. Two or more applications serving the same purpose, purchased by different teams unaware of each other’s choices.
• Orphaned subscriptions. Applications still being billed after the project that justified them ended.

The cost of this waste accumulates silently. Unlike hardware, which depreciates visibly on a balance sheet, SaaS spend is distributed across monthly invoices that individually look small but collectively represent significant, recurring expenditure.

Tracking Seat Utilisation

The first step in optimising SaaS spend is understanding actual usage. For each application in your estate, you need three pieces of information:

1. Total licences purchased – the number of seats you are paying for. 2. Licences assigned – the number of seats allocated to named users. 3. Active usage – the number of users who have actually used the application in a defined period, typically 30 or 90 days.

The gap between these figures is where waste lives. A plan with 100 purchased seats, 85 assigned, and 30 actively used has significant reclaimable waste.

### Getting the Data

Most SaaS vendors expose usage data through admin consoles or APIs. The mechanisms vary:

• Microsoft 365. The Microsoft Graph `/reports` endpoints provide usage data for Exchange, SharePoint, Teams, and other Microsoft 365 services, broken down by user and time period.
• Google Workspace. The Google Workspace Admin SDK Reports API returns user activity for Drive, Gmail, and other services.
• Salesforce. Login history and user record data reveal active vs inactive users.
• Atlassian. The Jira and Confluence admin consoles expose active user counts, and the Atlassian REST API returns user and group details.

Where a vendor does not expose usage data programmatically, single sign-on logs are a useful proxy. If a user has not authenticated to an application through your identity provider in 90 days, they are almost certainly not using it.

Identifying Waste

Once you have the data, apply consistent criteria to flag waste:

• Unused seats. Licences assigned to users with no activity in the last 90 days.
• Departed users. Licences still assigned to users who have left the organisation. These should be reclaimed immediately.
• Role mismatch. Users with premium plans whose role does not require premium features. A finance administrator on a Salesforce enterprise licence when a professional licence suffices.
• Duplicate subscriptions. Two applications of the same category where consolidating onto one would reduce spend.

Prioritise reclamation by impact. A £50 per month licence assigned to a departed user is reclaimable today. A £200 per month premium plan downgrade affects a smaller number of users but yields more per reclamation.

Reclaiming Licences

Reclamation is the step where optimisation becomes real. Identifying waste produces reports; reclaiming licences produces savings. The practical process is:

1. Validate. Before removing a licence, confirm with the user or their manager that it is genuinely unused. Some applications have legitimate seasonal or infrequent use. 2. Downgrade or remove. For unused seats, remove the licence assignment. For over-provisioned plans, downgrade to the appropriate tier. 3. Document. Record what was reclaimed, when, and why. This supports audit trails and provides a baseline for measuring future waste trends. 4. Notify. Inform affected users that a licence has been removed, and provide a clear route to request reinstatement if needed.

Monitoring and Preventing Recurrence

Optimisation is not a one-off exercise. Waste accumulates continuously as users change roles, join, and leave. An effective programme includes:

• Scheduled reviews. Run usage reports monthly or quarterly, not annually. Waste identified in week four is reclaimable; waste identified in month twelve has already cost you eleven months of unnecessary spend.
• Automated alerts. Configure alerts for departed users who still hold licences, so reclamation happens within days of a leaver date rather than at the next review.
• Joiner and leaver workflows. Integrate licence assignment and removal with HR processes. When an employee leaves, their SaaS licences should be revoked automatically as part of the offboarding workflow.
• Procurement controls. Require new SaaS subscriptions to be registered before they can be expensed. This does not prevent teams from choosing their own tools, but it ensures the organisation knows what is being bought and can track it.

Measuring Success

Track your optimisation programme with simple, honest metrics:

• Total SaaS spend over time, per application and in aggregate.
• Reclaimed licences per review cycle, and the corresponding cost saving.
• Percentage of assigned seats actively used, per application.
• Time between user departure and licence reclamation, as a measure of process responsiveness.

These metrics make the value of the programme visible to finance and leadership, and they provide the feedback needed to refine the process. SaaS optimisation is a continuous discipline, not a project with an end date – but the savings it produces are real, recurring, and well worth the effort.