SaaS Consolidation: $67,000 Annual Savings

Here's the SaaS trap every growing company falls into: you start with the free tier, upgrade when you hit limits, add another tool for a different need, integrate with a third tool, and suddenly you're spending $8,500/month on software subscriptions with half the features going unused.

We worked with a 75-person SaaS company—let's call them TechCo—spending $142,000 annually on SaaS tools. That's $1,893 per employee per year. For context, industry benchmark for their size is $900-$1,200 per employee.

The CFO knew they were overspending but didn't know where or how much. Individual tools seemed reasonable ($49/month here, $199/month there), but it had accumulated into a serious cost center.

This is the story of a comprehensive SaaS audit and consolidation project that reduced their annual spend from $142,000 to $75,000—a $67,000 (47%) reduction—while actually improving functionality and reducing complexity.

Total project cost: $8,400. Payback period: 1.5 months. Here's exactly how we did it and what we found.

The SaaS Sprawl Baseline

First, we had to figure out what they were actually paying for.

Discovery: Finding All the Tools

Official IT list: 18 SaaS applications

Actual count after audit: 64 SaaS applications

The gap? Shadow IT. Employees signing up for tools with company credit cards, free trials converting to paid subscriptions, team-level purchases never reported to IT.

How we found them:

• Credit card statements (3 company cards)
• Expense reports (employees using personal cards, getting reimbursed)
• IT asset management audit
• Employee survey ("what tools do you actually use?")
• SSO logs (for tools integrated with authentication)
• Browser extension usage data (with permission)

The Spending Breakdown

$142,000 total annual SaaS spend across 64 tools:

Category	Tools	Annual Cost	Cost per Tool
Collaboration	12	$18,400	$1,533
Project Management	8	$14,200	$1,775
CRM & Sales	6	$24,800	$4,133
Marketing	11	$22,100	$2,009
Development	9	$16,800	$1,867
HR & Admin	7	$12,400	$1,771
Finance & Accounting	4	$15,200	$3,800
Analytics	7	$18,100	$2,586

The Usage Reality

We tracked actual usage for 30 days:

23 tools (36%) had zero active users in past 30 days

• Forgotten subscriptions
• Evaluated but never canceled
• One team used then switched tools
• $31,200 annual spend on unused tools

18 tools (28%) had 1-3 active users

• Purchased for department, only one person uses
• "I might need this someday"
• Champion left company, nobody else adopted
• $27,400 on barely-used tools

15 tools (23%) had significant overlap

• Three project management tools doing the same thing
• Four collaboration platforms (Slack, Teams, Discord, Basecamp)
• Two time tracking systems
• Multiple tools for same function across teams

8 tools (13%) well-utilized and necessary

• Core tools actually earning their cost
• High adoption, clear use cases
• Would definitely keep

The Hidden Costs

Direct subscription costs were only part of the problem:

Integration tax:

• Tools don't talk to each other
• Manual data transfer between systems
• Employees context-switching between 8-12 tools daily
• Estimated cost: $45,000 annually in lost productivity

Training and learning curve:

• Each new tool requires onboarding
• Different interfaces, different workflows
• Knowledge loss when employees leave
• Estimated cost: $18,000 annually

Security and compliance risk:

• 64 different authentication systems
• Data scattered across platforms
• Shadow IT means no security review
• Compliance nightmare for SOC 2 pursuit
• Risk: Difficult to quantify but real

Why This Happens

TechCo's path to SaaS sprawl:

Year 1-3: Startup, used free tiers and minimal paid tools. Smart and scrappy.

Year 4-5: Got funding, started saying "yes" to tool requests. Growth mode meant "we need this now" beat "let's evaluate properly."

Year 6: Hit 50 employees. Departments made independent purchasing decisions. No centralized oversight.

Year 7: 75 employees. CFO finally noticed the line item, asked us to investigate.

Nobody made bad decisions individually. Each tool purchase made sense in isolation. Collectively, it was chaos.

The Audit Process: 6 Weeks of Investigation

Week 1-2: Complete Tool Inventory

Data gathering:

• Finance pulled all SaaS transactions (24 months)
• IT inventoried known systems
• Surveyed all employees
• Analyzed credit card statements
• Reviewed expense reports

Tool catalog created:

• Tool name
• Current plan/tier
• Monthly/annual cost
• Number of licenses
• Cost per license
• Vendor
• Department owner
• Contract terms

Findings: 64 tools, $142,000 annual spend, 47% higher than industry benchmark

Cost: $2,800 (consultant time + employee time)

Week 3-4: Usage Analysis

Tracked actual usage:

• Login frequency
• Active users
• Features utilized
• Data stored
• Integration connections
• Business process dependency

Usage categories defined:

• Critical: Business stops without it
• High-value: Significant usage, clear ROI
• Medium-value: Some usage, unclear ROI
• Low-value: Minimal usage, questionable value
• Unused: Zero usage, immediate candidate for elimination

Interview stakeholders:

• Why was this tool purchased?
• What problem does it solve?
• What would happen if we canceled it?
• Are there alternatives?
• Would you pay for it personally?

Findings:

• 23 unused tools ($31,200)
• 18 barely-used tools ($27,400)
• 15 redundant tools ($38,600)
• 8 well-utilized tools ($44,800)

Cost: $3,200 (analysis time)

Week 5: Consolidation Strategy

Grouped tools by function:

• Collaboration: 12 tools → can we consolidate to 2-3?
• Project management: 8 tools → can we standardize on one?
• Analytics: 7 tools → what's actually necessary?

Evaluated options:

Option 1: Cut unused, keep the rest

• Easiest, least disruptive
• Saves $31,200
• Doesn't address redundancy or complexity

Option 2: Cut unused, consolidate redundant

• Moderate disruption
• Saves $50,000-$60,000
• Reduces tool count significantly
• Some migration effort required

Option 3: Start from zero, rebuild deliberately

• Most disruptive
• Maximum savings potential
• High migration cost and risk
• Probably overkill

Decision: Option 2 with phased approach

Cost: $1,600 (strategy development)

Week 6: Negotiation and Planning

Identified quick wins:

• Cancel unused tools (no negotiation needed)
• Downgrade over-provisioned licenses
• Annual prepay discounts (15-20% typical)
• Volume discounts for consolidation

Negotiation targets:

• Tools we're keeping: renegotiate better terms
• Tools we're consolidating: leverage competition
• Vendors where we have leverage: push for discounts

Migration planning:

• Which tools to eliminate/consolidate
• Data migration requirements
• Team training needs
• Timeline and sequencing

Cost: $800 (planning)

Total audit cost: $8,400

The Consolidation Execution

Phase 1: Eliminate Unused Tools (Month 1)

23 tools canceled:

• Zero active users in 30 days
• No business process dependency
• Easy decision

Process:

• Export any data (just in case)
• Cancel subscription
• Remove from SSO
• Update documentation

Challenges:

• Some "unused" tools had data we needed to export
• A few had annual contracts (had to wait for renewal)
• One vendor made cancellation difficult (30-day notice, multiple confirmations)

Results:

• Annual savings: $31,200
• Immediate: $18,600 (prorated for annual contracts)
• Time: 12 hours of admin work

Phase 2: Consolidate Redundant Tools (Months 2-4)

Project management consolidation:

• Had: Asana, Monday, Trello, Basecamp, ClickUp, Jira, Smartsheet, Airtable
• Analyzed: Which had highest adoption (Asana: 34 users, others: 5-12 users)
• Decision: Standardize on Asana, eliminate others
• Migration: Moved active projects to Asana
• Training: Quick sessions for teams using other tools
• Result: $8,200 annual savings

Collaboration consolidation:

• Had: Slack, Microsoft Teams, Discord, Basecamp messaging
• Analyzed: Slack had 72/75 users, others minimal
• Decision: Slack only, eliminate others
• Challenge: Discord used by engineering (fought this)
• Compromise: Kept Discord for eng ($0 cost, open source self-hosted)
• Result: $4,800 annual savings (eliminated Teams, Basecamp messaging)

Analytics consolidation:

• Had: Google Analytics, Mixpanel, Amplitude, Heap, Hotjar, FullStory, Segment
• Analyzed: Massive overlap in event tracking
• Decision: Kept Google Analytics + Mixpanel (complementary), eliminated others
• Challenge: Some historical data lost
• Compromise: Exported critical data first
• Result: $12,400 annual savings

CRM consolidation:

• Had: Salesforce, HubSpot (marketing), Pipedrive (sales), Intercom, Zendesk, Freshdesk
• Analyzed: Data fragmentation was killing them
• Decision: Unified on HubSpot CRM (they were already paying for marketing)
• Migration: 8 weeks, painful but necessary
• Result: $14,200 annual savings + massive productivity gain

Development tool optimization:

• Had: GitHub, GitLab, Bitbucket (three different VCS), Jira, Linear, Clubhouse
• Analyzed: Historical accident, not intentional
• Decision: Standardized on GitHub + Linear
• Migration: 6 weeks for code repositories
• Result: $9,800 annual savings

Total Phase 2 savings: $49,400 annually

Phase 3: Renegotiate Remaining Tools (Months 5-6)

For tools we're keeping, negotiated better terms:

Salesforce (before canceling most of it):

• Reviewed actual usage: 35 licenses, only 22 active users
• Reduced to 25 licenses
• Negotiated 20% discount for annual prepay
• Savings: $4,200 annually

Zoom:

• Had enterprise plan, only using basic features
• Downgraded to Pro plan
• Savings: $2,800 annually

Slack:

• Negotiated multi-year deal
• 15% discount
• Savings: $1,800 annually

AWS:

• Reviewed resource usage
• Right-sized instances
• Reserved instance purchases
• Not strictly SaaS, but while we were optimizing...
• Savings: $8,400 annually (significant!)

Various smaller tools:

• Annual prepay discounts
• Reduced license counts to actual usage
• Negotiated better terms leveraging consolidation
• Combined savings: $6,200 annually

Total Phase 3 savings: $23,400 annually

Phase 4: Prevent Future Sprawl (Ongoing)

Implemented governance:

Purchasing policy:

• All SaaS purchases require IT approval
• Exception: Under $50/month can be expensed, but must be registered
• Quarterly review of all tools
• Annual budget for each department

Vendor management:

• Centralized vendor list
• Contract renewal calendar
• Designated owner for each tool
• Usage tracking mandatory

Evaluation process:

• Before buying new tool, check existing tools
• Business case required for purchases over $200/month
• Security review for all tools
• Free trial first, always

Tool adoption tracking:

• If tool isn't adopted within 60 days, cancel
• Quarterly usage audits
• Identify underutilized tools proactively

Results: Total Savings Achieved

Annual Cost Reduction

Phase	Annual Savings	Effort
Eliminate unused tools	$31,200	Low
Consolidate redundant tools	$49,400	High
Renegotiate existing tools	$23,400	Medium
AWS optimization	$8,400	Medium
Total Annual Savings	$112,400	-

Wait, we said $67K in the title. Let me explain the math:

Gross savings: $112,400 New costs (investments in better tools): $45,200

• Upgraded HubSpot for full CRM capability
• Better monitoring tools
• Enhanced security tools for reduced attack surface

Net savings: $67,200 annually

We could have saved $112K by just cutting. Instead, we saved $67K while actually improving capability. That's the right trade-off.

Other Benefits (Unquantified)

Reduced complexity:

• From 64 tools to 28 tools
• 56% reduction in tool count
• Easier onboarding for new employees
• Less context switching

Improved security posture:

• Fewer access points
• Better oversight
• Reduced shadow IT
• Easier compliance (pursuing SOC 2)

Better data integration:

• Fewer silos
• Data flows between core tools
• Single source of truth for customer data
• Reduced manual data entry

Productivity gains:

• Estimated 8-12 hours per employee per month reclaimed from tool switching
• Better tool adoption (focused training on fewer tools)
• Reduced "which tool should I use for this?" decision fatigue

ROI Analysis

Investment

Audit and consolidation project: $8,400 Migration effort (employee time): $22,000 Training: $4,200 Total investment: $34,600

Returns

Year 1 net savings: $67,200 Year 2+ net savings: $67,200 annually

Payback period: 6.2 months 3-year ROI: 482%

Plus unquantified benefits: productivity, security, simplicity, better data.

Lessons for Other Companies

1. Shadow IT is real and expensive

Almost 3x more tools than IT knew about. That $31,200 in unused subscriptions? All shadow IT that auto-renewed for months.

2. Usage tracking prevents waste

Just because you're paying for 50 licenses doesn't mean you need 50 licenses. Track actual usage monthly.

3. Consolidation is disruptive but valuable

Moving from 8 project management tools to 1 was painful. But the long-term benefit (standardization, integration, simplicity) was worth it.

4. Negotiate everything

Vendors give discounts for annual prepay, volume commitments, consolidation. Always ask.

5. Governance prevents recurrence

Without the purchasing policy and quarterly reviews, they'd be back at 60+ tools within 18 months.

6. Cut thoughtfully, not blindly

We could have saved more by cutting everything to minimum. Instead, we invested in the right tools for better outcomes.

7. Per-employee SaaS spend is a good benchmark

Industry standard: $900-$1,200/employee/year. They were at $1,893. Now at $1,000. Good proxy for "are we overspending?"

When This Approach Works vs. Doesn't

This works well when you:

• Have 20+ employees
• Suspect SaaS overspending
• Have multiple tools doing similar things
• Haven't audited tools in 2+ years
• See unusually high per-employee SaaS costs

This probably won't work if you:

• Have under 10 employees (less complexity)
• Recently did comprehensive audit
• Have strong governance already
• Have unusually streamlined tool stack already

ROI indicators this is worth doing:

• You don't have complete list of all SaaS tools
• You're paying for tools nobody uses
• You have 3+ tools in same category
• Per-employee SaaS spend over $1,500/year
• Shadow IT is common

The Bottom Line

TechCo spent $8,400 on an audit and $34,600 total (including migration) to reduce their annual SaaS spend by $67,200.

But here's what they really got:

• Simpler tool stack (64 → 28 tools)
• Better security posture
• Improved data integration
• Foundation for growth without complexity spiral
• Governance to prevent future sprawl

The question isn't "can we afford a SaaS audit?"

The question is: "how much are we wasting on tools we don't use or don't need?"

For most companies over 50 employees, the answer is: "way more than the audit costs."

We're Thalamus. Enterprise capability without enterprise gatekeeping.

If your SaaS spending feels out of control but you don't know where to start, we should talk. Not because we're definitely the right answer, but because we might help you calculate what tool sprawl is actually costing you.

Sometimes the most valuable consulting is discovering you're paying for 23 tools nobody uses.