How to Cut SaaS Waste: Finding $50K in Unused Licenses in 90 Days

Key Takeaways

Q: How much do companies typically waste on unused software licenses?
A: The average company wastes approximately $18 million annually on unused SaaS licenses, with typical organizations using only 50-60% of purchased software licenses according to recent studies.

Q: What's the fastest way to identify unused licenses?
A: Use automated software usage tracking tools like Abloomify that integrate with your identity provider (Okta, Azure AD) and monitor actual login activity across all applications, flagging licenses unused for 30+ days.

Q: How quickly can we see cost savings?
A: Most companies identify $50,000-$250,000 in potential savings within the first 30 days of auditing, with full optimization achieved in 60-90 days after downgrading licenses and eliminating unused tools.

Q: What's the best approach: manual spreadsheet tracking or automated tools?
A: Manual tracking works for companies with <10 applications but becomes unscalable and error-prone beyond that. Automated platforms like Abloomify provide real-time visibility across hundreds of tools with minimal IT overhead.

Q: How do we optimize licenses without disrupting users?
A: Start with clear data showing usage patterns, communicate changes 30 days in advance, offer alternative tools where needed, and maintain a request process for users who genuinely need licenses restored.

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Sarah, the CFO of a 300-person tech company, discovered a shocking reality during her quarterly budget review: her company was spending $840,000 annually on software subscriptions, yet usage data showed that 40% of licenses sat completely idle. That's $336,000 per year literally paying for software nobody used.

She's not alone. Research from Zylo and Productiv shows that companies waste an average of 30-40% of their SaaS budget on unused, redundant, or underutilized software. For a mid-size tech company, this translates to hundreds of thousands in wasted capital that could fund new hires, product development, or actual business growth.

The problem has exploded as companies adopt more cloud software. The average enterprise now uses 254 SaaS applications (up from 80 just five years ago), creating a sprawling, ungoverned landscape where IT teams can't track what's purchased, who's using it, or whether licenses are optimized.

Here's how to take control, eliminate waste, and reclaim significant budget dollars in 90 days.

Understanding the SaaS Waste Problem

Before diving into solutions, let's understand why SaaS waste is so pervasive and why it continues to grow:

The Root Causes of SaaS Waste

1. Decentralized purchasing
Modern SaaS applications are easy to buy with a credit card. Departments purchase tools independently without IT approval, creating shadow IT sprawl. Marketing buys design tools, sales purchases prospecting software, and engineering subscribes to monitoring services—all without central visibility.

2. Set-it-and-forget-it subscriptions
Unlike traditional software with annual renewal negotiations, SaaS auto-renews monthly or annually. Once a team subscribes, the charges continue indefinitely on autopilot, even after the initial champion leaves the company or the use case disappears.

3. Employee turnover and role changes
When employees leave or change roles, their software licenses often remain assigned indefinitely. A salesperson who quit six months ago might still have an active $150/month Salesforce license, Gong seat, and ZoomInfo subscription.

4. Overprovisioned licenses
Companies often purchase enterprise tiers or bulk license packs anticipating growth that doesn't materialize. A company might buy 100 GitHub Enterprise seats planning to hire 30 engineers, but only hire 15, leaving 15 unused licenses at $21/month each.

5. Redundant tools
Different teams purchase overlapping solutions: Marketing uses Asana, Engineering uses Jira, and Operations uses Monday.com—three project management tools doing essentially the same job. Nobody has the organizational visibility to consolidate.

6. Feature tier mismatches
Users assigned "Professional" or "Enterprise" licenses might only use basic features available in "Starter" plans, overpaying for capabilities they never touch.

The Financial Impact

Let's quantify the typical waste for a 300-person company:

Microsoft 365 E3: 300 licenses purchased, 275 used → $900/month waste ($10,800 annually)

Salesforce: 50 licenses purchased, 35 used @ $150/license → $2,250/month waste ($27,000 annually)

Slack Business+: 300 licenses purchased, 200 used @ $12.50/license → $1,250/month waste ($15,000 annually)

Zoom Pro: 150 licenses purchased, 90 used @ $15/license → $900/month waste ($10,800 annually)

Jira Software: 100 licenses purchased, 75 used @ $8/license → $200/month waste ($2,400 annually)

Adobe Creative Cloud: 50 licenses purchased, 28 used @ $60/license → $1,320/month waste ($15,840 annually)

GitHub Enterprise: 80 licenses purchased, 62 used @ $21/license → $378/month waste ($4,536 annually)

Figma Professional: 40 licenses purchased, 24 used @ $15/license → $240/month waste ($2,880 annually)

Total Monthly Waste: $7,438 | Total Annual Waste: $89,256

This is just 8 applications. Most 300-person companies use 100+ SaaS tools, multiplying waste exponentially.

Add in completely unused applications (tools purchased for a project that ended, trial conversions nobody uses) and the waste easily exceeds $150,000-$300,000 annually.

The Framework for Eliminating SaaS Waste

Systematic SaaS optimization follows four phases:

Phase 1: Discovery (Week 1-2)

Identify every application, who purchased it, current cost, and license count

Phase 2: Usage Analysis (Week 2-4)

Determine actual usage patterns, active vs. inactive licenses, feature utilization

Phase 3: Optimization (Week 4-8)

Reclaim unused licenses, downgrade tiers, consolidate redundant tools, renegotiate contracts

Phase 4: Governance (Week 8+)

Establish policies, approval workflows, and continuous monitoring to prevent future waste

Let's walk through each phase with specific tactics.

Phase 1: Discover All Your SaaS Applications

You can't optimize what you can't see. The first step is creating a comprehensive inventory.

Step 1: Gather Data from Multiple Sources

Financial systems (Accounts Payable):

• Export all software/subscription charges from your accounting system
• Look for recurring charges from vendors like Salesforce, Adobe, Microsoft, Atlassian
• Don't forget small charges ($10-50/month)—they add up
• Identify who approved each purchase and which budget it comes from

IT systems:

• Export user provisioning data from your identity provider (Okta, Azure AD, Google Workspace)
• These systems show all SSO-connected applications
• Review MDM (Mobile Device Management) tools for installed applications
• Check your network monitoring for SaaS traffic patterns

Credit card statements:

• Many SaaS tools are purchased on company credit cards
• Review all corporate cards, especially those issued to department heads
• Look for charges to Stripe, PayPal, or direct to software vendors

Department surveys:

• Send a brief survey to all team leads: "What software tools does your team use?"
• You'll discover shadow IT this way—tools purchased without IT's knowledge
• Ask specifically about free trials that converted to paid

Step 2: Create Your SaaS Inventory Spreadsheet

Build a master spreadsheet with these columns:

Column headers: Application | Vendor | Owner/Buyer | Total Cost/Year | License Count | License Type | Renewal Date | Category | Critical?

Example entries:

• Salesforce: Vendor: Salesforce | Owner: Sales VP | Cost: $90,000/year | Licenses: 50 (Professional) | Renewal: Jan 15 | Category: CRM | Critical: Yes
• Figma: Vendor: Figma Inc | Owner: Design Lead | Cost: $7,200/year | Licenses: 40 (Professional) | Renewal: Rolling | Category: Design | Critical: Yes

Key data points to capture:

• Vendor and application name
• Department owner (who requested/uses it)
• Total annual cost (including all licenses)
• Number of licenses/seats purchased
• License tier (Basic, Pro, Enterprise, etc.)
• Renewal date and contract terms
• Application category (CRM, Design, Project Management, etc.)
• Business criticality (Critical, Important, Nice-to-have, Unknown)

Step 3: Calculate Your Total SaaS Spend

Once your inventory is complete, calculate:

• Total annual SaaS spend: Sum of all application costs
• Spend by category: Group applications by function
• Spend by department: Which teams are biggest SaaS consumers?
• Cost per employee: Total spend ÷ headcount (industry benchmark: $2,500-$5,000 per employee annually)

For a 300-person company, expect total annual SaaS spend between $750,000 and $1,500,000.

Phase 2: Analyze Usage and Identify Waste

Now that you know what you're paying for, it's time to determine who's actually using it.

Step 1: Define "Active Usage"

Establish clear criteria for what counts as active usage:

Recommended thresholds:

• Inactive: No login in 30+ days
• Underutilized: Logged in but <30 minutes usage per month
• Active: Regular usage (3+ logins per month, >1 hour engagement)
• Power user: Daily usage, >10 hours per month

Different applications warrant different thresholds. A developer might use GitHub daily but only access Figma monthly for design reviews—context matters.

Step 2: Gather Usage Data

Method 1: Manual review (works for <20 applications)

For each critical application:

1. Log into admin console
2. Export user list with last login date
3. Sort by last activity to find inactive users
4. Cross-reference with current employee list (identify departed employees still holding licenses)

Method 2: Automated tracking (recommended for >20 applications)

Use Abloomify or similar platforms to automatically track:

• Login frequency across all SSO-connected applications
• Time spent in each application
• Features used within applications
• Licenses assigned to departed employees
• Redundant tool usage (e.g., users active in both Asana and Jira)

Abloomify integrates with:

• Identity providers (Okta, Azure AD, Google Workspace) for login data
• Financial systems for spend data
• HRIS (BambooHR, Workday) to identify departed employees
• Individual applications via API for detailed usage metrics

Step 3: Categorize Every License

For each license, determine its status:

🔴 Inactive (reclaim immediately):

• Assigned to departed employees
• No login in 60+ days
• User confirms they don't need it

🟡 Underutilized (investigate):

• Infrequent usage (<1x per month)
• User has access but never logs in
• Assigned "Pro" license but only uses free-tier features

🟢 Active (keep):

• Regular usage aligned with job role
• User depends on it for daily work
• Critical business function

🟣 Redundant (consolidate):

• Multiple tools serving the same function
• Features overlap with other tools
• Can be replaced by existing platform

Step 4: Calculate Waste Potential

Build a waste analysis showing potential savings:

Salesforce: 8 inactive + 7 underutilized licenses = $2,250/month savings ($27,000 annually)

Adobe CC: 15 inactive + 9 underutilized licenses = $1,440/month savings ($17,280 annually)

Microsoft 365: 12 inactive licenses = $432/month savings ($5,184 annually)

Slack Business+: 50 inactive licenses = $625/month savings ($7,500 annually)

Total Potential Savings: 85 inactive + 16 underutilized licenses = $4,747/month ($56,964 annually)

This creates your business case for optimization.

Phase 3: Optimize and Reclaim Licenses

With data in hand, it's time to take action.

Step 1: Start with Low-Hanging Fruit

Priority 1: Departed employees (immediate action)

These are zero-risk savings:

1. Generate report of all licenses assigned to terminated employees
2. Immediately revoke access in identity provider (security + cost)
3. Downgrade/cancel licenses within vendor portals
4. Typical savings: 5-10% of total spend for companies without good offboarding

Priority 2: Users who self-report they don't need licenses

Send a simple email to underutilized users:

Subject: Do you still need your [Application] license?

Hi [Name],

We're optimizing our software licenses. Our data shows you haven't logged into [Application] in the past 60 days.

If you don't need this license, we'll remove it by [date] to optimize costs.

If you do need it, just reply to let us know why, and we'll keep it active.

If you're unsure, let's schedule a quick 5-minute chat.

Thanks for helping us use our software budget wisely!

Most users will respond "I don't need it" or simply not respond, giving you clear reclamation authority.

Priority 3: Obvious redundancies

If Marketing uses Asana and Engineering uses Jira, but neither team interacts, that's not necessarily redundant. But if the same team has licenses to both Zoom and Google Meet and Microsoft Teams, there's clear consolidation opportunity.

Step 2: Right-Size License Tiers

Many users are assigned premium licenses when basic tiers would suffice.

Example: Salesforce

Essential Tier ($25/month): Basic CRM for small teams

Professional Tier ($75/month): Full CRM + automation

Enterprise Tier ($150/month): Advanced customization

Unlimited Tier ($300/month): AI, advanced analytics

Audit your Enterprise/Unlimited users. Do they actually use advanced features? Many organizations assign premium licenses based on seniority rather than actual feature usage. A VP who only logs in monthly to view dashboards doesn't need a $300/month Unlimited license.

Savings opportunity: Downgrading even 10 users from Unlimited to Professional saves $1,500/month ($18,000/year).

Step 3: Negotiate Contract Terms

Armed with usage data, you have leverage to renegotiate:

For renewals:

• "Our data shows we only actively use 60 of our 100 licenses. We'd like to renew at 65 licenses with the option to add more as needed."
• Vendors prefer keeping you as a customer vs. losing the account entirely
• Target 20-30% reduction in license count based on actual usage

For annual vs. monthly:

• Many SaaS companies offer 20% discounts for annual commitment
• But only do this AFTER optimizing license count
• Don't lock in 100 licenses annually if you only need 60

For enterprise discounts:

• If you're paying list price, you're overpaying
• Enterprise agreements typically offer 20-40% discounts
• Volume discounts often kick in at 50-100 seats

Negotiation template:

Hi [Account Manager],

We're coming up on our renewal for [Application]. We've been a loyal customer for [X] years and value the platform.

However, our usage analysis shows we're only actively using [Y] of our [Z] purchased licenses. I'd like to propose:

• Reduce to [Y + 10% buffer] licenses
• Maintain annual commitment for [discount]
• Add quarterly true-up option for flexibility

This allows us to continue as a customer while aligning our spend with actual value. Can we schedule a call to discuss?

Step 4: Consolidate Redundant Tools

This requires more organizational change management but yields significant long-term savings.

Common consolidation opportunities:

Project Management:

• Consolidate Asana + Monday.com + Trello → Single platform (Jira or Asana)
• Savings: $5,000-$15,000 annually

Communication:

• Consolidate Slack + Microsoft Teams → Choose one
• Savings: $10,000-$30,000 annually

Video Conferencing:

• Consolidate Zoom + Google Meet + Teams → Use what's included in Microsoft/Google suite
• Savings: $5,000-$20,000 annually

Design Tools:

• Consolidate Figma + Sketch + Adobe XD → Single platform
• Savings: $8,000-$15,000 annually

Consolidation roadmap:

1. Identify overlapping tools
2. Survey users on preferences and must-have features
3. Select winning platform based on votes + cost + IT integration
4. Create 60-day migration plan
5. Train users on new platform
6. Cancel redundant subscriptions after migration complete

The Abloomify Way: Automated SaaS Optimization

Manual license management works for small companies but doesn't scale. Here's how Abloomify automates the entire process:

Automatic License Discovery

Abloomify integrates with your identity provider (Okta, Azure AD, Google Workspace) and automatically discovers:

• Every SSO-connected application
• All assigned licenses and their tiers
• Cost data from your expense management system
• HRIS data showing current vs. departed employees

Result: Complete SaaS inventory updated daily, zero manual spreadsheet maintenance.

Real-Time Usage Tracking

Abloomify tracks actual application usage:

• Login frequency and duration
• Feature usage within applications (via API integrations)
• Cross-tool usage patterns (e.g., users duplicating work across Asana and Jira)
• Mobile vs. desktop usage

Result: Real-time dashboard showing exactly who uses what, how often, and whether licenses are justified.

Automated Waste Detection

Abloomify's AI automatically flags:

🔴 Immediate reclamation opportunities:

• "15 licenses assigned to departed employees → Save $3,200/month"
• "32 Slack licenses inactive >60 days → Save $400/month"
• "8 Adobe Creative Cloud licenses unused → Save $480/month"

🟡 Optimization recommendations:

• "12 Salesforce Enterprise users only use Professional features → Downgrade to save $1,800/month"
• "Figma and Sketch both licensed → Consolidate to save $4,200/year"
• "Zoom licenses at 60% utilization → Reduce 40 seats and save $7,200/year"

🟢 Proactive alerts:

• "Trial subscription to [Tool] converting to paid in 7 days → Review needed"
• "New shadow IT detected: 5 users subscribed to [Tool] → Evaluate enterprise plan"
• "Annual renewal for [Tool] in 30 days → Optimize before renewal"

One-Click License Reclamation

From the Abloomify dashboard:

1. Review flagged inactive licenses
2. Click "Reclaim" to send automated notification to user
3. If no response in 7 days, automatically deprovision in identity provider
4. Generate report showing monthly savings

Continuous Governance

Abloomify establishes ongoing optimization:

Automated policies:

• Auto-remove licenses from departed employees within 24 hours
• Flag licenses inactive >30 days for review
• Require manager approval for new software purchases >$50/month
• Quarterly usage reviews auto-scheduled with department heads

Spend alerts:

• Real-time notification when new software charges hit company cards
• Budget threshold alerts: "Engineering team software spend 15% over budget"
• Renewal reminders 60 days before annual contracts

Savings dashboards:

• Track cumulative savings from optimization
• ROI calculation: "Abloomify has saved $127,000 in 6 months"
• Trend analysis: Is SaaS spend growing or shrinking?

Real-World Results

250-person SaaS company:

• Discovered 127 unused licenses across 18 applications
• Consolidated 4 redundant project management tools → Jira
• Downgraded 31 users from premium to standard tiers
• Total savings: $186,000 annually
• Time to achieve: 45 days
• Ongoing time to maintain: <2 hours monthly (vs. 10+ hours with manual tracking)

Implementation Roadmap: 90-Day Plan

Days 1-14: Discovery & Setup

Week 1:

• Deploy Abloomify or begin manual inventory
• Integrate identity provider and expense systems
• Generate complete SaaS inventory
• Calculate total current spend

Week 2:

• Review usage data as it populates
• Identify top 10 applications by cost
• Flag obvious waste (departed employees, 60+ day inactive)
• Build initial savings projection

Deliverable: Complete SaaS inventory with usage data and preliminary savings target (e.g., "$78,000 potential annual savings identified")

Days 15-45: Quick Wins

Week 3:

• Reclaim all licenses from departed employees
• Email underutilized users for confirmation
• Downgrade obviously over-tiered licenses
• Cancel completely unused applications

Week 4:

• Follow up on user responses
• Begin consolidation planning for redundant tools
• Schedule vendor negotiations for upcoming renewals
• Communicate SaaS optimization initiative to leadership

Week 5-6:

• Execute license reductions with vendors
• Migrate users off redundant tools
• Renegotiate contracts up for renewal
• Implement approval workflow for new software purchases

Deliverable: First round of savings realized (target: 50-70% of total potential savings)

Days 46-90: Consolidation & Governance

Week 7-10:

• Complete tool consolidation projects
• Renegotiate major contracts (Salesforce, Microsoft, etc.)
• Establish SaaS procurement policy
• Train department heads on approval process

Week 11-12:

• Document all savings achieved
• Set up ongoing monitoring and quarterly reviews
• Create SaaS optimization playbook for ongoing governance
• Celebrate and communicate wins to organization

Week 13:

• Present final results to leadership
• Establish quarterly optimization review cadence
• Assign ownership: Who maintains ongoing optimization?

Deliverable: Full $50,000+ in annual savings achieved, governance process established

Common Pitfalls and How to Avoid Them

Pitfall 1: Optimizing without understanding context

The mistake: Removing licenses based purely on login frequency without understanding work patterns.

Example: A VP only logs into Salesforce twice per month to review dashboards before board meetings. Low usage doesn't mean the license isn't valuable.

Solution: Always provide a review period and let users confirm whether they need licenses. Context matters more than raw usage numbers.

Pitfall 2: Optimizing to zero buffer

The mistake: Reducing to exactly the number of active users with no headroom.

Example: You have 62 active GitHub users, so you reduce from 80 licenses to 62. Two weeks later, you hire 5 engineers and need emergency licenses.

Solution: Maintain 10-15% buffer above active usage to accommodate growth and flexibility. It's better to have 5 unused licenses than to block new hires.

Pitfall 3: Focusing only on big applications

The mistake: Optimizing Salesforce and Microsoft 365 while ignoring dozens of $10-50/month tools.

Example: You save $30,000 on Salesforce but overlook 40 small subscriptions totaling $25,000 annually.

Solution: The "small tool sprawl" adds up significantly. Don't ignore the long tail of subscriptions.

Pitfall 4: No ongoing governance

The mistake: One-time optimization without establishing continuous monitoring.

Example: You clean up licenses in Q1, but by Q3, the waste has returned as new tools get purchased and employees turn over.

Solution: SaaS optimization isn't a project—it's an ongoing process. Establish quarterly reviews, automated alerts, and clear procurement policies.

Pitfall 5: Alienating users

The mistake: Heavy-handed license removal without communication or alternatives.

Example: You revoke a designer's Adobe license without warning because they haven't logged in recently. Turns out they were on parental leave.

Solution: Always communicate changes in advance, provide alternatives, and make restoration easy for legitimate requests.

Measuring Success

Track these KPIs to measure optimization impact:

Cost metrics:

• Total annual SaaS spend (should decrease)
• SaaS spend per employee (target: $2,500-$4,000)
• Percentage of licenses actively used (target: >85%)
• Savings achieved vs. target

Efficiency metrics:

• Time to provision new licenses (should be fast)
• Time to deprovision departed employees (target: <24 hours)
• Percentage of purchases going through approval workflow (target: 100%)

Governance metrics:

• Number of shadow IT applications discovered monthly (should decrease)
• Compliance with procurement policy (target: >95%)
• Vendor consolidation progress (fewer total applications over time)

Frequently Asked Questions

Q: What if we over-optimize and remove licenses someone actually needs?
A: Build in a simple restoration process. If someone requests a license back within 30 days, restore it immediately, no questions asked. After 30 days, require manager approval. In practice, <5% of reclaimed licenses get requested back, and those that do often represent legitimate new needs rather than oversight.

Q: Won't employees get frustrated if we remove access to tools they occasionally use?
A: Communication is key. Explain why optimization matters: "This saves $150,000 annually that we can invest in [product development/hiring/raises]." Frame it as good stewardship of company resources, not penny-pinching. Provide alternatives where possible: "We're consolidating from Asana to Jira, here's your training and migration support."

Q: Should we tell employees their usage is being tracked?
A: Absolutely yes. Transparency builds trust. Explain: "We track login activity to optimize license allocation—we're not monitoring your work activity or productivity, just ensuring licenses are assigned to people who actively use them." Most employees find this reasonable.

Q: What about seasonal or project-based usage?
A: Consider this in your thresholds. A license unused for 30 days might need investigation, but a license unused for 90 days is almost certainly waste. For project-based tools, consider shorter-term licenses (monthly instead of annual) or create a "license pool" that users can request from as needed.

Q: How do we prevent SaaS waste from returning after optimization?
A: Establish three mechanisms: (1) Procurement policy requiring approval for new software, (2) Automated monitoring with quarterly reviews, (3) Cultural shift: make requesting new software easy but require business justification. The goal isn't to block new tools but to make intentional decisions.

Q: What if vendors won't let us reduce licenses mid-contract?
A: You have leverage. Options: (1) Negotiate mid-contract amendment—most vendors prefer this to losing you at renewal, (2) Accept the current term but optimize for renewal, (3) Suspend/archive licenses if vendor allows, then reduce at renewal. Document this so you don't repeat the mistake.

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