{"id":25163,"date":"2026-02-18T17:46:38","date_gmt":"2026-02-18T17:46:38","guid":{"rendered":"https:\/\/www.insentragroup.com\/us\/insights\/uncategorized\/the-great-saas-consolidation\/"},"modified":"2026-02-19T03:47:19","modified_gmt":"2026-02-19T03:47:19","slug":"the-great-saas-consolidation","status":"publish","type":"post","link":"https:\/\/www.insentragroup.com\/us\/insights\/geek-speak\/modern-workplace\/the-great-saas-consolidation\/","title":{"rendered":"The Great\u00a0SaaS\u00a0Consolidation\u00a0"},"content":{"rendered":"\n

This is part 4 in my ongoing series that all started with my\u00a0Six Tech Trends Shaping 2026<\/a>\u00a0post.\u00a0<\/p>\n\n\n\n

Part 1:\u00a0<\/strong>Agentic AI Takes the Wheel in 2026\u00a0<\/a>
Part 2:\u00a0<\/strong>AI Governance Will Stop Being Optional<\/a>
Part\u00a03:\u00a0<\/strong>Hybrid Work Gets Its Second Act\u00a0<\/a><\/p>\n\n\n\n

Look, we need to talk about that spreadsheet. You know the one, the Excel file tucked away in SharePoint (or worse, still living on someone\u2019s desktop) where you’re trying to track all your organisation’s SaaS subscriptions. The one that makes you question your life choices every time you open it. <\/p>\n\n\n\n

If that spreadsheet is currently tracking somewhere between 100-400 different software tools, congratulations you’re completely normal. Also completely drowning in unnecessary complexity and haemorrhaging money, but hey, at least you’re not alone. <\/p>\n\n\n\n

Welcome to 2026, where the party’s finally over and the cleanup begins. <\/p>\n\n\n\n

What We’re Actually Talking About Here <\/h2>\n\n\n\n

SaaS sprawl isn’t just “having too many apps.” It’s the organisational equivalent of death by a thousand subscriptions, each one seemingly justified, most barely used, and collectively creating a management nightmare that would make even the most zen IT director contemplate early retirement. <\/p>\n\n\n\n

Here’s what typically happens: Marketing gets Salesforce. Sales adds HubSpot because they “prefer the interface.” Customer Success deploys Zendesk. Meanwhile, someone in Operations discovered Monday.com, Finance is paying for both QuickBooks and Xero (don’t ask), and the development team has somehow accumulated fourteen different project management tools. <\/p>\n\n\n\n

The average enterprise today manages 106 different SaaS applications,[1]<\/sup> down slightly from 112 in 2023 but before you celebrate that consolidation, the pace has slowed to just 5% year-over-year,[2]<\/sup> suggesting organisations are hitting diminishing returns on the easy wins. <\/p>\n\n\n\n

And here’s the kicker: the average company only uses 49% of its purchased SaaS licenses.[3]<\/sup> That’s not a typo. Organisations are literally paying for twice as much software as they actually need. <\/p>\n\n\n\n

The Reality Check: What This Is Actually Costing You<\/h2>\n\n\n\n

Let’s talk numbers, because “too many apps” sounds like an inconvenience until you see what it’s doing to your budget. <\/p>\n\n\n\n

Gartner research shows that organisations without centralised SaaS management overspend by at least 25% due to unused entitlements and unnecessary overlapping tools.[4]<\/sup> For a mid-sized enterprise spending $5 million annually on SaaS, that’s $1.25 million evaporating into unused licenses and redundant capabilities. <\/p>\n\n\n\n

But the financial waste is just the beginning. Consider the hidden costs: <\/p>\n\n\n\n

Security exposure that keeps CISOs up at night: <\/strong>Organisations without proper SaaS lifecycle management are five times more susceptible to cyber incidents or data loss.[5]<\/sup> Every unmanaged application is a potential entry point, especially when employees leave and their access isn’t properly terminated across the entire portfolio. <\/p>\n\n\n\n

Integration chaos: <\/strong>Different teams using different tools means constant manual data transfers, broken workflows, and the kind of inefficiency that makes grown professionals weep quietly at their desks. One European manufacturer reduced active suppliers by 13% and identified 15% savings opportunities just by getting visibility into their actual software usage.[6]<\/sup> <\/p>\n\n\n\n

Decision-making paralysis: <\/strong>When you have seventeen different “sources of truth” scattered across multiple platforms, good luck getting accurate reporting or making confident strategic decisions. <\/p>\n\n\n\n

The Australian market provides an interesting case study. With IT spending projected to hit A$172.4 billion in 2026\u2014and software becoming the largest category at nearly A$60 billion[<\/sup>7]<\/sup>\u2014organisations Down Under are discovering that procurement strategy matters more than procurement volume. <\/p>\n\n\n\n

Why This Got So Out of Hand <\/h2>\n\n\n\n

The SaaS explosion wasn’t an accident\u2014it was the perfectly predictable result of several converging forces that sounded great individually but created chaos collectively. <\/p>\n\n\n\n

The democratisation of IT procurement <\/strong>changed everything. Gone are the days when IT controlled all software purchases. Today, 75% of employees are expected to acquire, modify, or create technology without IT oversight by 2027 up from 41% in 2022.[8]<\/sup> Marketing can spin up a new analytics platform. HR can deploy a recruitment tool. Finance can trial expense management software. All without bothering IT with tedious details like “security reviews” or “integration requirements.” <\/p>\n\n\n\n

This shift happened for good reasons. Business units understood their needs better than IT could. Cloud-based tools were cheap and easy to deploy. The subscription model meant no massive upfront capital expenditure or lengthy approval processes. Why wait six months for IT to evaluate solutions when you could have something running by next Tuesday? <\/p>\n\n\n\n

The pandemic accelerated everything <\/strong>to ludicrous speed. Companies that might have spent years carefully planning their digital transformation found themselves desperately deploying anything that kept people productive while working remotely. Collaboration apps on enterprise devices increased 176% in a single month during 2020.[9]<\/sup> When survival is the priority, portfolio management gets… deprioritised. <\/p>\n\n\n\n

The rise of freemium and trials <\/strong>created another interesting dynamic. Why not try six different project management tools when they’re all offering free tiers or 30-day trials? The problem is that “trying” often morphs into “using,” which becomes “depends upon,” and suddenly you’re paying for all six because different teams have built their workflows around different platforms. <\/p>\n\n\n\n

Regional variations tell interesting stories. In APAC where the SaaS market is growing at 16-19.2% annually[<\/sup>10]<\/sup> <\/sup>companies are rushing to digitise, sometimes skipping the “planning” phase entirely. European organisations, meanwhile, are adding GDPR compliance as another layer of complexity to their consolidation efforts, though European companies still increased SaaS spending by 57% between 2020 and 2021.[11]<\/sup> <\/p>\n\n\n\n

And let’s be honest about the vendor landscape. When every software company discovered they could slap “AI-powered” on their product description and double their pricing, suddenly that perfectly functional tool you’ve used for years needs to be “upgraded” to the AI version. Whether you need AI capabilities or not becomes irrelevant when vendors start deprecating the features you actually use.<\/p>\n\n\n\n

What Successful Consolidation Actually Looks Like <\/h2>\n\n\n\n

Here’s what doesn’t work: declaring “We’re cutting apps!” and handing down mandates from the executive team without understanding how work actually gets done. That approach typically results in either rebellion (shadow IT goes deeper underground) or compliance theatre (officially consolidating while unofficially maintaining the old tools). <\/p>\n\n\n\n

Real consolidation starts with visibility, and I mean genuine visibility not the version where IT thinks they control 30% of SaaS spending when they actually control 26%.[12]<\/sup><\/p>\n\n\n\n

Phase 1: Actually Know What You Have<\/h2>\n\n\n\n

Organisations serious about this are deploying SaaS Management Platforms (SMPs) that automatically discover applications through multiple methods: integration with SSO, CASB traffic logs, API connections, browser extensions, and expense system parsing.[13]<\/sup> The goal is finding shadow IT before it becomes a security incident. <\/p>\n\n\n\n

One useful framework from Forrester suggests starting with business drivers that define the need for change, then defining application portfolio characteristics that enable those changes, followed by phased program activities.[14]<\/sup> It’s less sexy than wielding the consolidation axe, but significantly more effective.<\/p>\n\n\n\n

Phase 2: Understand What You Actually Need <\/h2>\n\n\n\n

This is where application rationalisation moves from inventory management to strategic portfolio optimisation. The questions shift from “What do we have?” to: <\/p>\n\n\n\n