Companies waste 30% of SaaS licenses on inactive users and wrong tiers. Learn how to track, right-size, and optimize every SaaS license you pay for.
Here's a number that should make every IT and finance leader uncomfortable: the average SaaS license utilization rate across mid-market companies is 55-65%. That means for every 100 licenses you pay for, 35-45 are either completely unused or so underutilized that a cheaper plan — or no plan at all — would suffice.
Multiply that across 200+ applications and the waste is staggering. For a company spending €500,000 annually on SaaS, poor license management alone accounts for €100,000-€150,000 in wasted spend every year.
SaaS license management is the practice of tracking every license, measuring actual usage, and continuously right-sizing your portfolio. It's the single highest-ROI activity in SaaS cost optimization.
Traditional software licensing was simpler: you bought a fixed number of perpetual licenses, installed them on specific machines, and tracked them through an asset management system. SaaS licensing is fundamentally different — and fundamentally harder to manage.
Per-seat vs. usage-based vs. hybrid pricing: Every vendor has a different model. Slack charges per user. AWS charges per resource. HubSpot charges per contact. Zoom charges per host but not per participant. There's no standard.
Tier complexity: Most applications have 3-5 pricing tiers with different feature sets. Microsoft 365 alone has multiple tiers ranging from basic to enterprise — and the right tier varies by role.
Shadow procurement: When departments buy their own tools, licenses proliferate without central oversight. Marketing has 15 Canva Pro seats. Sales has 20. Design has 10. Nobody knows the total, and nobody negotiated a volume discount.
Employee lifecycle gaps: New hires get licenses provisioned. Departing employees should get licenses revoked. In practice, deprovisioning is inconsistent — and the licenses keep billing.
Users who have never logged in, or haven't logged in for 90+ days. These are the easiest to reclaim.
Common causes:
Typical savings: Reclaiming unused licenses recovers 10-15% of total SaaS spend.
Users who log in occasionally but don't justify the license cost. A user who opens Figma once a month doesn't need a full professional license.
How to identify:
Typical savings: Downgrading underutilized users to lower tiers saves 5-10% of spend on affected applications.
Users on premium tiers who only use standard features. This is especially common with Microsoft 365 and Google Workspace, where many users are on E5/Enterprise tiers but only use email and basic productivity features.
How to identify:
Typical savings: Right-sizing tiers saves 20-40% on the affected licenses.
The same user with licenses for multiple tools that serve the same purpose. An employee with both Asana and Monday.com accounts, or both Dropbox and OneDrive, is a sign of SaaS sprawl.
How to identify:
Typical savings: Consolidating to one tool per category saves the full cost of the eliminated duplicates.
Build a complete license inventory across every SaaS application:
| Data Point | Source |
|---|---|
| Application name | Discovery / IdP |
| Total licenses purchased | Vendor portal / contract |
| Licenses assigned | Vendor admin panel |
| Active users (30-day) | Usage data / vendor API |
| Cost per license | Contract / invoice |
| Tier/plan | Vendor portal |
| Contract renewal date | Procurement records |
Don't limit this to IT-managed applications. Include everything discovered through shadow IT detection — those unmanaged applications often have the worst utilization rates.
For each application, calculate:
Flag applications with utilization below 70% for immediate action.
Execute changes in priority order:
Prevent license waste from recurring:
Different applications require different approaches:
These are your largest line items and most complex licensing structures. Optimize aggressively:
High adoption variability. Many users get licenses during onboarding but never become active:
Managed by individual departments, often with limited IT oversight:
Track these metrics to measure the impact of your program:
| Metric | Baseline (Typical) | Target |
|---|---|---|
| Overall utilization rate | 55-65% | > 85% |
| Unused license count | 30-40% of total | < 10% |
| Average time to deprovision | 30+ days | < 24 hours |
| Cost per active user | 40-60% above optimal | Within 10% of optimal |
| License waste (annual €) | 20-35% of spend | < 5% of spend |
SaaS license management is the highest-leverage cost optimization activity available to IT and finance teams. The waste is predictable, the fixes are straightforward, and the savings are immediate.
Start with your top 10 applications by spend — they likely represent 70-80% of your total SaaS cost. Build a complete picture of licenses purchased vs. licenses used. Reclaim the obvious waste. Then build the systems to prevent it from coming back.
Every unused license is money spent on an empty seat. Stop paying for chairs nobody sits in.
Want to see your license utilization across every SaaS application? Book a demo and identify your reclamation opportunities in 15 minutes.
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