In 2023, the average SaaS application portfolio of a company grew 32% vs 2021, reaching 371 apps (Figure 1).
However, when it comes to app engagement, more employees are engaging with shadow IT apps (54%), than those owned by their IT department (40%)2 (Figure 2). The takeaway is that employees are using too many disparate systems that can often overlap with each other. This phenomenon could be because:
- Employees aren’t taking full advantage of existing tools already at their disposal
- They are unaware of their company’s existing app stack.
Poor app engagement results in lower ROI, suboptimal resource utilization, lost data and insights, and a reduced competitive edge.
Solutions to App Sprawl
1) iPaaS or enterprise automation platform
Given that most apps are cloud-based (Figure 3)3, the remedy for integrating applications, data, and processes across various cloud environments is an iPaaS (integration platform as a service) or enterprise automation platform.
These platforms are not just for data integration, they also have automation capabilities.
Application consolidation
Apps with overlapping functionality can be consolidated to minimize the need for copy pasting across applications or the need to build data pipelines between applications
Application modernization
Legacy apps can be retired and consolidated in a small number of modern apps
- “2023 State of SaaS Trends.” Productiv. 2023. Retrieved on July 25, 2023.
- “The State of SaaS Sprawl.” Productiv. 2022. Retrieved on May 19, 2023.
- “The State of Cloud Report.” Flexera. 2022. Retrieved on May 19, 2022.
Share on LinkedIn
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 55% of Fortune 500 every month.
Cem’s work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE and NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and resources that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem’s work in Hypatos was covered by leading technology publications like TechCrunch like Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
