SaaS Management vs Software Asset Management: What's the difference

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How do SaaS Management and Software Asset Management (SAM) differ, and why is it essential to understand these differences today?

Unlike SAM, which primarily deals with installed software, SaaS Management tackles SaaS apps that businesses now use extensively. Recent studies show that the average organization uses around 500 SaaS applications, making it more challenging to track subscriptions, renewals, and usage.

Understanding these distinctions can help organizations optimize both on-premise and SaaS software to reduce costs and improve efficiency.

In this article, we’ll explore the key differences between SAM and SaaS Management, how both approaches work and why relying solely on SAM tools may not be enough to manage SaaS effectively. We’ll also discuss how SaaS Management platforms complement SAM tools to help businesses optimize their software ecosystem.

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TL;DR

• SaaS Management focuses on cloud-based software, while SAM deals with traditional on-premise software.
• SAM tools struggle with tracking, visibility, and optimizing SaaS applications, often missing unsanctioned apps and usage details.
• SaaS management platforms provide deeper insights, automate renewals, and enhance compliance and security for cloud software.
• Integrating SaaS management with SAM tools improves visibility, cost efficiency, and software license utilization.
• Platforms like CloudEagle.ai bridge these gaps by centralizing data, automating workflows, and optimizing software usage.

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What is Software Asset Management (SAM)?

Software Asset Management is the process of managing and optimizing an organization’s software assets throughout their lifecycle. It includes tracking software licenses, monitoring usage, and ensuring compliance with licensing agreements.

Its primary functions include license management, usage tracking, data collection, and cost optimization, making it essential for managing on-premise and perpetual license software effectively.

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What is SaaS Management?

SaaS Management refers to the process of managing SaaS applications that are delivered through subscription models. Unlike traditional software, SaaS applications are hosted online, and companies pay for them regularly.

SaaS Management ensures that businesses can effectively track, control, and optimize the use of these applications, managing costs and improving efficiency.

The main role of SaaS Management is to oversee all aspects of SaaS software, from subscription renewals to usage monitoring and compliance. It also helps businesses avoid paying for unused or redundant apps, ensuring that only necessary tools are being used.

• Track subscriptions: SaaS management helps businesses monitor subscription renewals and usage, preventing unexpected costs.
• Optimize cloud software usage: It ensures that only the necessary tools are used, avoiding unnecessary expenses.
• Control access and compliance: SaaS management provides control over who can use the software, ensuring compliance with legal and security standards.

For instance, in a company with multiple departments using various SaaS tools, SaaS management makes it easier to keep track of usage, renewals, and spending across the entire organization. This ensures that resources are used wisely while avoiding unnecessary spending on unused apps.

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Software Asset Management Vs SaaS Management

Software Asset Management and SaaS Management are distinct approaches for managing software in organizations. While SAM focuses on traditional on-premise software, SaaS Management handles subscription-based cloud applications. The significant distinctions between them are summarised here:

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SaaS Management Tool vs. SAM Tool: Key Differences

When comparing SaaS management tools to Software Asset Management tools, it’s essential to understand how they differ in functionality and capabilities. Here are the key differences:

1. Tracking & Visibility  

Traditional SAM tools often have limitations when it comes to tracking all software applications, especially SaaS tools. These tools may miss certain SaaS applications, leaving gaps in visibility.

Therefore, SaaS management platforms like CloudEagle.ai excel by integrating with over 500 SaaS applications, providing a complete view of every tool in use. This includes detecting unauthorized or shadow IT applications, and ensuring they are properly managed.

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Accurate Data Collection: By connecting with systems such as SSO, HRIS, and finance platforms, CloudEagle.ai facilitates accurate usage data gathering across all SaaS tools. This allows organizations to identify underutilized or duplicated applications.

Optimized Resource Allocation: Insights into application usage enable companies to eliminate wasted resources, focusing on the tools that deliver the highest value and reducing overall costs.

2. License Management  

While SAM tools are designed to manage on-premise software licenses, they are not as effective for SaaS applications. CloudEagle.ai and other SaaS management platforms make license management more efficient through automation.

They monitor real-time license usage, ensuring businesses do not overspend on unused or expired licenses.

Automated License Tracking: CloudEagle’s automation ensures licenses are used optimally, automatically reclaiming unused licenses and reducing unnecessary spending.

Cost Efficiency: With better visibility and automated management, companies can significantly cut down on license expenses by reclaiming and reallocating unused licenses.

3. Procurement & Renewal Management  

SAM tools often lack robust features for managing SaaS procurement and renewals. SaaS management platforms excel in this area by automating procurement workflows and setting up renewal reminders to avoid missed deadlines and unnecessary payments.

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Automated Renewal Alerts: CloudEagle.ai sends timely notifications for upcoming renewals, allowing teams to proactively manage contract renewals and negotiate better terms with vendors.

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Simplified Procurement: CloudEagle.ai streamlines procurement with no-code workflows and customizable forms for tasks like purchase requests and contract management. It centralizes requests on a single dashboard, offering real-time visibility and automating approvals, allowing teams to focus on strategic decisions while improving efficiency.

4. Compliance & Security  

SaaS applications present unique security and compliance challenges, which traditional SAM tools may not fully address. CloudEagle.ai ensure compliance by tracking access to SaaS applications and maintaining detailed logs for provisioning and de-provisioning.

This is essential for businesses that need to stay compliant with industry regulations.

Secure Access Control: CloudEagle.ai helps businesses ensure that only authorized personnel have access to specific SaaS tools, reducing the risk of security breaches and ensuring regulatory compliance.

Comprehensive Compliance Reporting: The platform simplifies the generation of compliance reports, making it easier for organizations to demonstrate adherence to industry regulations during audits.\

5. User Experience & Automation

SaaS management platforms are built for ease of use and efficiency, automating much of the manual work that SAM tools require. CloudEagle.ai enhances this with features like AI-driven contract metadata extraction, which simplifies contract management, automates renewals, and reduces human errors.

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Enhanced Automation: With AI-driven processes and automation of routine workflows, CloudEagle.ai helps businesses reduce time spent on manual tasks, improving overall efficiency and productivity.

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Why SAM Tools Alone Are Not Enough for Managing SaaS

Relying solely on Software Asset Management tools to manage both on-premise and SaaS software presents several challenges for companies.

SAM tools were originally designed for managing traditional, on-premise software with perpetual licenses, which have static usage patterns and straightforward licensing agreements.

However, the dynamic nature of SaaS applications introduces complexities that SAM tools cannot handle effectively.

Challenges of Using SAM Tools for SaaS Management

1. Inability to Track Fluid SaaS Usage

SAM tools are optimized for tracking software installed on company-owned servers or devices, where the software's presence and usage are relatively constant. However, SaaS applications are hosted in the cloud and accessed through the internet, making their usage far more fluid.

Employees can easily sign up for new SaaS tools without IT’s knowledge (often referred to as Shadow IT). SAM tools struggle to detect and track these SaaS apps, leaving organizations blind to unauthorized or redundant applications.

For Example, John, a project manager, signs up for multiple project management tools across different teams to boost efficiency. Without proper oversight, various tools get used for similar tasks. The SAM tool, however, fails to track all these SaaS apps accurately, causing overspending on duplicate licenses.

2. Limited License Utilization Monitoring

One of the key benefits of SaaS applications is their flexible licensing models, often charged per user or usage. However, SAM tools are not equipped to monitor real-time usage or the specific features within these applications due to a lack of direct API integrations with SaaS applications.

This creates a problem when companies need to understand how well SaaS licenses are being utilized, and whether they are paying for unused or underutilized features.

For Example: If a business has 100 Zoom licenses but only 70 employees actively use the platform, a SAM tool may not provide insight into this underutilization. Without accurate data, the company could continue paying for licenses that aren’t needed, wasting valuable resources.

3. Lack of Automated Renewal Tracking

SaaS software typically operates on subscription models, with frequent renewal cycles (monthly, quarterly, or annually).

SAM tools, designed for managing one-time purchase licenses, cannot automatically track these renewals. Without timely notifications, companies often miss renewal deadlines, leading to service interruptions or unnecessary auto-renewals.

For Example, A marketing team may subscribe to a SaaS tool like Canva for design work. If the company relies on a SAM tool, it may not be alerted when the subscription is up for renewal, risking either paying for another year unnecessarily or losing access to the tool during an important campaign.

4. Inadequate User Activity Tracking

SAM tools are designed to monitor software installations and licenses, not user engagement. This limitation is especially problematic for SaaS applications, where tracking user activity is crucial for determining whether a tool is being used effectively.

Without detailed usage insights, companies may continue paying for underutilized SaaS tools, resulting in wasted investments.

For Example, if Mark subscribes to a collaboration tool for his team, a SAM tool may show that the software is installed, but it won’t reveal how often his team uses it or which features are utilized. Mark needs this information to decide whether the tool is worth the cost.

5. Complex Compliance Requirements:

Managing the security and compliance of SaaS applications presents additional challenges, as these tools often deal with sensitive company data that reside outside the traditional network.

SAM tools aren’t designed to monitor how data is accessed, shared, or secured within cloud applications. This lack of control exposes organizations to compliance risks and data breaches.

For Example, An HR team using a SaaS payroll service needs to ensure that sensitive employee data is stored and handled securely. SAM tools can’t provide the necessary monitoring of data compliance, increasing the potential for vulnerabilities.

6. No Support for Automated Provisioning/Deprovisioning:

Managing employee access to SaaS applications, particularly during onboarding and offboarding processes, is crucial for security and cost efficiency. SAM tools do not support automated provisioning (granting access) or de-provisioning (removing access) of SaaS apps.

This leads to manual errors, such as employees retaining access to tools after they’ve left the company, increasing security risks and unnecessary spending.

For Example: When an employee exits the company if their access to SaaS tools like Google Workspace or Dropbox is not revoked in time, it can result in data security breaches or continued costs for unused licenses.

Given the challenges mentioned, it's clear why specialized SaaS management tools are more effective for handling the complexities of modern software environments.

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Case Study: How CloudEagle.ai Enhanced a Media Company's ITAM Strategy

A leading media company faced significant challenges in managing its SaaS portfolio using Flexera, a SAM tool. As the company’s SaaS stack grew, Flexera struggled to provide accurate visibility into all the SaaS applications being used, which led to difficulties in optimizing software spend and managing licenses.

Challenges:

• Lack of visibility into their full SaaS portfolio.
• Inaccurate usage data leads to wasted resources and excess spending.
• Difficulty managing vendor contracts and renewals, causing missed opportunities for savings.

Solution:

The company integrated CloudEagle.ai with Flexera, which significantly improved its ability to manage its SaaS apps. CloudEagle.ai provided real-time insights into software usage, identifying underused licenses that could be reallocated or cancelled.

The platform also streamlined contract management with AI-driven extraction, creating automated renewal reminders and enhancing vendor negotiations.

Results:

• Improved visibility into their SaaS stack, making it easier to manage licenses and avoid unnecessary purchases.
• Reclaimed underutilized licenses, including reducing 200 JIRA licenses to just 80, leading to significant cost savings.
• AI-powered contract management allowed timely vendor negotiations, reducing manual effort and improving terms.

This case study highlights how integrating a SaaS management platform like CloudEagle.ai with a SAM tool can provide complete visibility, reduce unnecessary spending, and streamline contract management, ultimately improving efficiency and cost control.

This makes combining both tools essential for companies looking to effectively manage their entire software portfolio.

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Conclusion

SaaS Management and Software Asset Management are both essential for optimizing software use, but they serve different purposes.

The key takeaway is that relying solely on SAM tools is insufficient in today's cloud-centric world. SaaS management platforms, like CloudEagle.ai, are necessary to fill the gaps left by SAM tools, providing the visibility, optimization, and security needed to manage modern software environments effectively.

By integrating both, businesses can streamline software management, save on costs, and reduce risks.

CloudEagle.ai is the leading SaaS management platform for organizations seeking to enhance their SAM tools.

With over 500 integrations, it offers deep insights into your SaaS portfolio, helping optimize license use, manage renewals, and improve vendor negotiations.

Book a demo now and see how you can enhance your SAM strategy with a SaaS management platform.

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SaaS Management vs Software Asset Management: FAQs

Q1. What is the main difference between SaaS Management and Software Asset Management (SAM)?

Ans. SaaS Management focuses on managing software applications, tracking usage, and optimizing costs. Software Asset Management manages both on-premise and cloud software but lacks the detailed insights needed for modern SaaS applications.

Q2. Why are SAM tools insufficient for SaaS management?

Ans. SAM tools cannot track real-time usage, optimize SaaS renewals, and manage licenses effectively. SaaS management platforms offer advanced features to handle the dynamic nature of cloud software, filling these gaps.

Q3. How do SaaS Management platforms help reduce costs?

Ans. SaaS management platforms like CloudEagle.ai track usage, reclaim underutilized licenses and automate renewal processes. This ensures companies only pay for the software they use, reducing unnecessary spending and improving efficiency.

Q4. How does SaaS management improve security compared to SAM tools?

Ans. SaaS management platforms offer better visibility into shadow IT, tracking unauthorized or unknown apps used within the organization. This ensures all applications are managed properly, reducing security risks and improving overall compliance.

Q5. Which is the best SaaS Management Platform to enhance SAM tools?

Ans. CloudEagle.ai is an ideal platform for complementing SAM tools. It provides deep insights into SaaS usage, integrates with over 500 tools, and automates license management, ensuring cost efficiency and better software visibility.

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