In 2015, Aron Grossman was CFO of Voxy, a VC-backed ed-tech startup. As the 50-person company grew, Aron became concerned: the small firm had more software tools than employees. SaaS spend lagged only rent, salaries, and AWS hosting as the company’s biggest expense.
Aron knew how much the company was paying, but he didn’t have visibility into utilization or ROI. The ensuing, multi-month, manual audit (yes, he actually walked around with a notepad inventorying devs’ tools) prompted him to leave Voxy and start a consulting company to help startups rightsize SaaS. As far as we know, it was the first commercial attempt to control enterprise SaaS.
Shortly after, Aron met Dusan and started Cleanshelf. The idea of a productized SaaS management platform was born.
Aron now leads software investments as Managing Director at private equity firm Gemspring Capital. He remains a Cleanshelf investor and an active observer of SaaS trends.
Our team sat down with Aron for a rapid-fire Q&A. Here are some takeaways.
"Cleanshelf cleans the shelfware. Shelfware is a term for software that is bought and isn’t used – stays on the shelf. Since businesses have plenty of SaaS subscriptions that aren’t used I was able to connect our purpose of “cleaning the shelf”, to come up with the name for our company, Cleanshelf."
"Our first software audit was incredibly labor-intensive and distracting. Nobody likes an inquisition, Survey Monkey forms, or spreadsheet tracking, but what we found was that 25% of our spend was from redundant, or excess, licenses.
That was step one. The cleanup effort was just as daunting; it’s hard to navigate the phone tree of a big software company and work through multiple call centers, just to cancel licenses."
"I realized that SaaS overrun wasn't a Voxy problem, it was an every-business problem. My network of CFO friends in New York all struggled with it. But every C-level leader I talked to had no idea where to begin.
Companies' critical priorities are growing revenues and reducing costs. This opportunity fit well. Plus, optimizing SaaS reduces clutter. This makes people more productive and collaborative. It can impact revenues–and the cost reduction opportunity is clear."
"There was an entire industry built around telecom expense management. Well-paid consultants help Fortune 1000 enterprises consolidate their spend across vendors like AT&T and Verizon. With SaaS, companies aren’t dealing with two or three contracts, they are dealing with dozens or hundreds. This was exponentially more complex–and no viable solution existed."
"Early on, I grappled with whether this was a finance or IT problem. I realized it’s both. In a startup, the CFO or COO (sometimes, even the CEO) is expected to stay on top of software tools and operations. As companies grow, IT leaders take on some of the SaaS management and delivery roles.
Both departments have a vested interest in this; finance, from a cost standpoint, and IT from a security and compliance standpoint. Both functions want employees to have access to the best tools to do their best job."
"The danger of SaaS is that it’s susceptible to the law of diminishing marginal returns. More software is not always better. Employees actually get more inefficient as their toolsets grow. This is why having the full view of licenses is important.
The bulk of your cost savings may be had in rightsizing Salesforce or Office 365 licenses, but the long-tail picture matters too. Your marketing team is better served by fully-utilizing one marketing analytics tool, versus having five overlapping tools that are underutilized. This adds workflow friction."
"SaaS management isn’t about quashing employee autonomy or trying to centralize IT control. Clarity and visibility are the rails for productive conversation between finance, IT, and line-of-business users. Once the full-picture of SaaS ownership is had, companies can actually discuss processes for acquiring new tools, efficient onboarding, security best-practices, and ways to collaborate.
Users may actually find more budget for the tools they want because the unneeded stuff gets scrapped. It would be unwise to come in with a machete and hack away at costs with your blinders on. You need to really understand how these tools are used (or not) within the organization"
To learn more about managing SaaS spending and subscriptions, set up a demo with the Cleanshelf team today.
Cleanshelf is the leading enterprise SaaS management platform focused on tracking, controlling, and benchmarking SaaS applications. Their SOC 2-compliant and AI-powered technology helps companies save up to 30% on their SaaS spending by automatically identifying unmanaged contracts, duplicate licenses, and wasted cloud software subscriptions. Based in San Francisco, Cleanshelf provides an enterprise-grade solution to over a hundred clients, including Hilton, Looker, and CoStar Group.