What is SaaS License Management?

With SaaS license management, businesses gain real-time insights into license utilization, subscription renewals, and expirations. This enables informed decision-making, cost savings, and minimization of compliance risks. As a software licensing solution, SaaS license management offers automation, centralized visibility, and effective management of licenses.

Embracing SaaS license management and adopting Licensing as a Service (LaaS) paves the way for seamless saas systems management and operations. This proactive approach facilitates optimal software utilization and mitigates non-compliance penalties. By harnessing the power of SaaS license management, businesses can unlock streamlined operations, ensuring they stay ahead in the fast-paced world of technology.

SaaS License Management Meaning

SaaS license management is a subset of software asset management (SAM) that tracks and manages cloud-based applications and services. SaaS license management becomes essential to their IT operations as companies continue shifting towards cloud-based solutions.

This solution gives a company’s SaaS providers improved visibility and responsibility. It guarantees that businesses are not paying excessive amounts for licenses and that they have the right licenses for their requirements. Additionally, it aids in stopping the illegal use of SaaS apps.

SaaS licensing management is a proactive method of handling software licenses, enabling businesses to maximize software spending and evade fines for non-compliance. It entails managing all of a company’s software-as-a-service (SaaS) applications, including those that are purchased, onboarded, licensed, renewed, and off-boarded.

Companies may examine all aspects of their SaaS consumption, including license utilization, subscription renewals, and license expirations, with the help of SaaS licensing management. They may use this information to find potential cost-saving opportunities, make wise software investment decisions, and lower risk.

There are various software licensing solutions available in the market that offer SaaS license management as a service. These solutions help companies manage their SaaS licenses more effectively, automate their saas operations management processes, and provide real-time visibility into their software usage.

Types of SaaS License

When it comes to SaaS licensing, there are several types available. This section will discuss the most common ones: per-user, usage-based, flat rate, and tiered.

Per User

A corporation pays a one-time fee for each user’s license using a subscription software model known as per-user, per-seat, or seat licensing. Due to its predictable cost, organizations or teams with a certain number of users use this kind of licensing.

If more users require access, the firm must acquire extra licenses since, under per-user licensing, only a certain number of people can utilise the program.


Usage-based licensing, also known as pay-as-you-go licensing or consumption-based licensing, is a software license subscription model where a corporation pays depending on the quantity of usage.

This sort of licensing is suitable for businesses with varying use levels or those who want to save up-front fees. With usage-based licensing, business costs increase as the program is utilized more frequently. For cloud-based applications, this kind of license is frequently applied.

Flat Rate

Flat-rate licensing is a subscription software license model where a company pays a fixed fee for unlimited use of the software. This type of licensing is ideal for companies that use the software extensively or need access to all features.

With flat-rate licensing, the company pays the same amount regardless of usage levels or the number of users.


Tiered licensing is a subscription software license model where a company pays based on the number of features or levels of access needed. This type of licensing is ideal for companies that need varying levels of access based on the user’s role or job function. The company pays more for higher access levels or additional features with tiered licensing.

Overall, selecting the right SaaS license model is critical to managing costs and ensuring your company has the necessary software tools to operate effectively. SaaS license management platforms can help companies manage their licenses effectively, ensuring they have the right number of licenses and are being used efficiently.

Challenges of SaaS License Management

saas manager

SaaS license management can be a complex process, and there are several challenges that organizations may face. Some of the key challenges of SaaS license management are discussed below:

Shadow IT

One of the biggest challenges of SaaS license management is shadow IT. This is when employees purchase and deploy SaaS applications without the knowledge of IT. Shadow IT can lead to several problems, including security risks, compliance issues, and increased costs.

To overcome this challenge, organizations need to have a clear policy in place for SaaS purchases and ensure that employees are aware of the policy.

Unused licenses

Another challenge of SaaS license management is managing unused licenses. Many organizations purchase more licenses than they actually need, leading to wastage and increased costs.

Organizations must clearly understand their usage requirements to overcome this challenge and regularly review their license usage.

Duplicate applications

Duplicate applications can also be a challenge for SaaS license management. This can happen when different departments or teams within an organization purchase the same application independently. This can lead to increased costs and inefficiencies.

To overcome this challenge, organizations must clearly understand their SaaS usage across the organization and encourage collaboration between different teams.

Payment and licensing models

Another challenge of SaaS license management is understanding the different payment and licensing models. SaaS providers may offer different pricing models, such as per user or feature, making it difficult to compare different applications.

Some SaaS providers may also offer different licensing models, such as annual or monthly subscriptions, which can impact costs and budgeting. Organizations must clearly understand their usage requirements and the different pricing and licensing models available to overcome this challenge.

Advantages of SaaS

Using SaaS apps has several benefits, even if managing licenses for these programs can be difficult. For instance, SaaS apps may be accessible from any location with an internet connection and are often more versatile and expandable than traditional software programs.

SaaS apps may also be updated more regularly and are usually easier to implement and manage. Organizations must have a solid SaaS operations management process in place to maximise the advantages of SaaS apps.

Overall, SaaS license management can be a complex process. Still, by understanding the challenges and advantages of SaaS applications, organizations can ensure they get the most out of their SaaS investments.

Best Practices for SaaS License Management

SaaS license management is a critical aspect of managing software assets in an organization. Here are some best practices to follow to ensure efficient and effective SaaS license management:

Centralize SaaS License Management

Centralizing SaaS license management helps organizations gain better visibility into their SaaS usage, which can help optimize license usage and reduce costs.

A centralized approach enables IT teams to manage SaaS licenses from a single platform, making tracking renewals, license usage, and compliance easier.

Implement a License Management Tool

The process of tracking and maintaining SaaS licenses may be automated by implementing a licensing management platform. These technologies offer a consolidated licensing data repository, making monitoring usage, renewals, and compliance simple.

When licenses are set to expire, they may also issue notifications, saving firms from paying needless fees.

Regularly Review License Usage

Regularly reviewing license usage helps organizations identify underutilized licenses that can be reallocated to other users or departments. This can help optimize license usage and reduce costs. Reviewing license usage periodically is important to ensure all licenses comply with vendor agreements.

Negotiate Better Deals with Vendors

Negotiating better deals with vendors can help organizations save costs on SaaS licenses. This can involve negotiating lower prices, better terms, or bundling licenses to get volume discounts.

Organizations can negotiate with vendors to ensure they only pay for the necessary licenses.

Monitor SaaS Usage

Monitoring SaaS usage helps organizations identify unauthorized SaaS applications and shadow IT.

This can help prevent security risks and reduce costs associated with unnecessary licenses. It is also important to monitor SaaS usage to ensure compliance with vendor agreements and avoid overpaying for licenses.

Train Employees on SaaS License Management

Training employees on SaaS license management can help them understand the importance of license compliance and optimize license usage. This can involve educating employees on the proper use of SaaS applications, license agreements, and non-compliance consequences.

Organizations can efficiently manage their SaaS licenses and accomplish their business objectives by centralizing SaaS license management, implementing a license management tool, regularly reviewing license usage, negotiating better terms with vendors, monitoring SaaS usage, and training staff on SaaS license management.

SaaS License Management Tools

Software programs called SaaS licensing management tools assist businesses in efficiently managing their SaaS licenses. These products offer a consolidated platform for managing all SaaS license lifecycle management phases, such as acquisition, deployment, use tracking, renewal, and retirement.

SaaS license management tools help organizations gain better visibility into their SaaS usage, optimize license utilization, and reduce costs. These tools also help organizations stay compliant with licensing agreements and avoid penalties due to non-compliance.

Some of the popular SaaS license management tools in the market include:


ServiceNow SaaS License Management solution provides a comprehensive view of an organization’s SaaS landscape, enabling them to manage licenses effectively, reduce costs, and ensure compliance. The solution provides features such as SaaS overview dashboard, usage and cost analysis, and direct integrations with SaaS vendors.


Zylo SaaS management platform helps organizations discover, manage, and optimize their SaaS usage. The platform provides SaaS discovery, usage analytics, license optimization, and vendor management features.


Freshservice SaaS license management solution helps organizations manage their SaaS licenses, renewals, and compliance from a single platform. The solution provides SaaS discovery, usage tracking, cost optimization, and license compliance features.


CloudEagle SaaS license management platform helps organizations manage their SaaS subscriptions effectively, reduce costs, and ensure compliance. The platform provides SaaS discovery, usage tracking, cost analysis, and license optimization features.


SaaS license management is crucial for organizations’ IT infrastructure. It provides a centralized platform for managing SaaS licenses and subscriptions, offering insight, control, and optimization over software assets.

These solutions prioritize agility and efficiency, guided by IT and procurement. They align with the expectations of modern buyers who demand more from digital technologies and consumer apps. They enhance SaaS and software vendors’ ownership, visibility, and accountability.

With businesses becoming more cloud-centralized and reliant on SaaS applications, tracking, analyzing, and optimizing software assets is essential. SaaS license management focuses on cloud-based applications and services within the broader Software Asset Management (SAM) domain. It improves the visibility and accountability of SaaS vendors.

SaaS operations management software efficiently cope with SaaS licenses and subscriptions. It helps discover SaaS usage across the organization, automate workflows, optimize spending, and identify opportunities for consolidation. This software licensing solution can be provided as a service, known as licensing as a service.


Scroll to Top