EP 22: Mapping the Rise of SaaS and SaaS Management w/ Dusan Omercevic

ABOUT THIS EPISODE

The market for SaaS tools has expanded dramatically in recent years. Alongside an accelerated delivery of applications in the cloud in large enterprises, there is now an estimated 11,000+ SaaS companies worldwide. SaaS revenue also exceeded $100 billion last year, and it’s predicted that 80% of software will be SaaS by 2030.

These estimates get bigger every year, and it should come as little surprise to listeners of Unleash IT that SaaS management and SaaS visibility are key concerns of IT and Business leaders throughout industries. Still, strategies and tools for SaaS management are not widely understood – a problem forcing many to rely on homegrown and ineffective solutions.

For these reasons and more, I’m pleased be speaking today with LeanIX’s very own Dusan Omercevic, VP of Product for the SaaS Management Platform — LeanIX’s fully automated SaaS management solution which provides automated views of SaaS applications in an enterprise.

Dusan recognized the great potential and challenges of SaaS many years ago, and in response, built and launched the SaaS Management Platform at Cleanshelf, a US and Slovenia-based group which he headed and founded until its acquisition by LeanIX earlier this year.

Dusan’s innovations are a perfect complement to LeanIX’s offerings in Application Portfolio Management and are a necessary antidote to the problems CIOs and CFOs face when keeping track of a company’s decentralized software tooling ecosystem. In addition, his previous engineering and product leadership roles at companies like Zemanta and Squrb make him especially qualified to share best practices and insights on SaaS today.

... but now quite often you are not buying just the software but also best practices. So from sus vender it's actually expected to introduce best practices into the company. Welcome to unleash it, a podcast where we discuss the experiences and ideas behind what's working in enterprise architecture and digital transformation within the IT landscape. Unlock Your Business has digital capabilities. Transform your enterprise architecture. Unleash it. Let's get into the show. Welcome to this episode of unleash it. The estimates on ZAS get bigger every year. The zast market exceeded a hundred billion dollar last year. It should come as a little surprised to the listeners of unleash it. That's us. Management and ZAS visibility are key concerns of it and business leaders throughout industries still strategic strategies and tools for SAS management and not widely understood, a problem forcing many to rely on homegown and ineffective solutions. For these reasons and more, I'm very pleased to be speaking today with Leni's very own do Jan or, much of which our VP of product for Zas Intelligence, Lenich's fundamentally exhaust management solution, which provides automat views of Zaus applications in an enterprise. Do Jean recognized the great potension and challenges of Sus many years ago and in response built and launched the US management as a product a clean shelf a US and Slovenia based group which he had it and found it until it's acquisition by the IX earlier this year. To Jan's innovations are perfect complement to lenix offerings in application portfolio management and our necessary Sarah and it antidote to the problem cios and CFOs face when keeping track of a company's decentralized software tooling ecosystem. So if there's anyone who knows how companies can turns us into their competitive advantage, it's too Shan. Welcome to unleash a t to Jean. Thank you. Great to be here. Great, yeah, let's let's start right into it. Can you share with our listeners your history in this our space, or, to put it more precisely, tell us how you became so fascinated with us and began looking at it from a management and visibility perspective? The FISCINA fascination is actually now more than twenty years old. So I first encounter this idea of delivering software over internating late N S, when it was still called applications service provisioning, and at that time we wanted to build a counting software delivered over Internet and are inspiration was net sweet, which was seven people at that time. So I got interest in this software as a service space very, very early on, and then it definitely intensified when I become a VP of engineering and product at one venture backed company which was early adopter of cloud and sauce. So I was seeing both benefits a challenges of suce on for from very early days of suce. So now I'm tracking this field for more than fifteen years. So literally you also moved from the practitioner side over to like the vendor sides of solving such a problem. I mean this is also something probably what connects the both of us. So for me this was more on the enterprise architecture sites, seeing that problem in in a business, for you seeing the seeing the issue from a company side itself.

So maybe let's shift the focus a bit on the Zar's industry as a whole. And we've arrived at a place where visibility and control is very difficult now. So, in your opinion, which are some noteworthy catalyst for growth that you think launched this whole evolution of suce? Yeah, it all started, of course, with sales force. So sales people were the most natural people to adopt this model because they used to be on the field. They had to have the access to software outside of the organization. So having that in the cloud was a natural start for SAC industry. So sales force did a great job developing this, but of course at exploded and now all departments, all software categories have moved these to this model because it perfectly aligns the interest of sus vendors and US customers. Yeah, I still remember when I first saw the logo of sales for saying sales force is not a software. I was, like always irritated. It took me many, many years to understand what they really mean with this, but I think today we're all very clear. Well, it meant. It meant they are not going to sell it to it, they are going to sell it to the business. Right. So they actually were groundbreaking in changing this. So and focus, focusing a bit on Zas users themselves. Can you briefly describe the ways in which software, the service is consumed in in larger scale organizations today? What are common trends relating to usage and purchase today? And so, definitely we are moving to solutions which are not just providing the software but also additional services on top of it, so additional data sources, professional services associated with that, because with us you're not just providing people on with code, you have a full team of customers, success specialist, everybody else working in the back and making customer successful. So this model of the software distribution has opened also our completely novel way how to deliver services. So I like to say that, okay, on the the trend now is a software as a service, but are really long and transformative trend is actually software as a service. Everything is becoming a service. Software is eating the work. When we look at the other side of the coin, and I mean we all know today it's so super easy to like purchase us in at Lena X, we've din an assessment, also with the help of course, of the new technology, seeing that we actually spend more than now two million dollar for software a service. If we look at the four hundred emplies. We have roughly fivezero dollar per employee of suspend and the big thing behind is its super convenient to actually like purchase this this. But now, looking on the other sides of the of the company, what are what do many companies fail to understand when it comes to this as purchasing and usage, and why? Why do they fall into those bad habits? From your point of view? Yeah, I think it's not just about convenience of purchase. It's also about giving departments and individuals the best tools to do their job. But on the flip side, and there are certainly challenges if software is not procured by professionals, and those challengers are definitely...

...about cost aspects. So if you are not buying software every day, you don't know all the right techniques, how to get the best price, how to optimize the service usage. And similarly, if you are not experienced software buyers on, you don't know all aspects of software compliance and security implications. So you say it has to do with like the intention of buying software. The centrally is good because they want to increase productivity, bring the best tools to the business, have better workflows and so on, but the primary problem is that you're not you're not familiar doing that a hundred times a year and that's why you miss out on some critical step. Yeah, so I think from from from what I see often as a very critical point is it's not in single sign on anymore. You haven't looked at where the data is stored. Sometimes you buy exact solution and then it's the data is hosted in a different country than you. Then you could have cho chosen in the beginning. So you probably those type of things right. So there is a term flying around in the industry called shadow it and do from your point of view, do you think that's the right term, or is it possible that the accessibility of Zas and the advent of emput and business for software because has made this term actually outdated? How do you think about it? Yeah, I think that it's the right thing for departments individuals to get the tools they need. I think that there is nothing wrong with this more business led ID, but having it involved is only growing in important. But maybe the ID should change from kind of gatekeeper approach to more kind of shepherd in more kind of helping on position and help these business buyers with their expertise in software procurement and management. Yeah, maybe we stick around a bit with this point because it's reminding me a lot about this topic of business and it alignment. So very traditionally there was this idea, or there was this concept like software was procured through it. So no alignment really needed because then someone would buy it for you. Then for many years we were, I think, in this process of you business and it need to be aligned. So if there's a requirement, you actually go to the IT, then it selects the right tools for it based on the requirements. What I'm observing currently is more okay. The the way processes are supported today is a bit different. It's not that you write down a document with requirements and then go out and search and then it a different person goes out and searches the software. But today what I see more is you have requirements and then a process starts of evaluating software and matching it against those requirements and figuring out new requirements based on the technical capabilities of the czar's you're looking at. So how do you think about this? Like this classical you need to look at the requirement, then someone else selects a tool for for you and then you come back and and then purchase it. So is this still is this still the right way to go, or will the way software is evaluated also change with with it? And so depends on the type of the software. So you have some software which is important crossed or...

...cross the organization and where it's definitely the right thing for it to lead and kind of juggle the interest of many people. So introduced introduction, for example, of slack or similar communication software is an example of such software. But you also have software which is super important for a particular department, for example market or part of all. That's the key tool for marketing department and typically they are leading the initiative which tools to select, with support of other departments. So we always see finance involved, will always see Info Sec and legally involved and of course it is supporting this. So it depends on the type of software whether are the its leading the initiative or is the business owner leading the initiative? Yeah, so you're saying literally, the more impact on multiple functions, the more core to conaboration in the business a solution is. Then then this is where, like cross coordination becomes more important. That's where also probably becoming more rigorous around requirements. Collection is important, but the more autonomously a software can be used, then, like we can go with less requirements engineering up front and actually be the more open to fund understand how the matching of a of a solution is to to to the needs. So I think I can only say I I really like that, that view you're sharing here, because it allows to actually figure out innovation through technology a bit quicker, because sometimes I feel if you look at a software to you understand like what, what additional capabilities, what additional processes can you set up? And on the flip side, I mean we have seen a lot of projects going on a specifically around like big earp software platforms, as AP, Oracle and so on, which were more customized towards the company processes instead of like using the processes within a software and then applying it to what what the company is doing. Right. So it's I think there's a lot also in with like how do you how much do you need to tailor your own processes, versus how much do you customize the software to do actually fulfill like your your processes right. So they're I see a huge and change in perception here from top management. So back in the days there were often buying software to support their existing processes, but now quite often you are not buying just the software but also best practices. So from sus vender it's actually expected to introduce best practices into the company. Yeah, and and I think this is that this is opens a lot of opportunities to have like less struggles with upgrading software, moving to new software. Of course it puts more emphasis on the integration of the US between different departments. So as as you are having more and more specialized solutions, you actually need to think about how do you integrate the data across across it very well, yea. So maybe you have some ideas around like why it's why it's so crucial to have visibility on this ass portfolio, maybe also a bit in conjunction with application portfolio management, which is more a discipline for from for we were, you know, x started. So why this becomes more important when planning out the landscape. Can you share your thoughts on that...

...too? It's very clear if you have five different video conferencing solutions that that is not helping for internal collaboration and productivity. And here the role of enterprise are architect and eppy leaders is to align the organization towards more uniform medity. And the second one is about data. So the modern companies are built around data. If you don't have good data on your customers, user suppliers, you can't run an efficient company and having very strong data lakes with the required data and then building other parts of the business from that is UN crucial for running an efficient modern company. Great, let's shift the view or the focus a bit on the challenges of understanding what software as a service is out there. And I know you. You have a lot of experience and background in that. So let's start here. What a company is doing today to discover what's us is out there. How do they how did they do it actually without having a solution in place? Yeah, so, unfortunately often they're flying blind and you can't protect, you can't optimize, you can't enforce compliance if you don't know what exist. So there are some systems, for example the Kaler or Microsoft cloud access broker, which provides part of the solution, but we see that that is producing a lot of false positives and providing a very, very partial vie. So what we see working best is to connect to all the key systems, having this information and then combining the data together and cross referencing and crush checking the data to really understand what the company is using and what impact the software has on their organization. So it's actually stitching together a lot of different data sources. A lot of manual effort goes into that. Like how is how is that change now? So let the guide us a bit through. What are important steps to actually get the automated discovery right? So what what are some of the data sources which are most important from your view? So and also you have maybe some anecdotes on like this discovery piece, right, so, flying by blind, how many applications or how many is our systems did they expect to have versus what was then, in the end the outcomes? Just like maybe you can shed a light on both topics. Yeah, definitely. It's interesting to see how much sauce is hidden from the eyes of senior IT leader. So when we speak to a CIO, we really like to ask him or her this question. How many such services do you think you have? And typically the number they give is two three times smaller than what we actually discover once we do a fully automated discovery and have the actual data so on. Having Cio not being aware of two fourds of their software Portfolia, that of course very problematic from security, cost compliance and in order to provide customers with full visibility, we use on several...

...approaches. So first we connect to all existing sources of data, so single sign on solution, SCILSB systems. They typically already and include quite some data. But we go much, much further. And one other approach that we use is follow the money. So looking at the ARPS, at the expense software and other sources of example credit card data, we are able to identify software that is Sperchon individual or department clever and then combining on all these sources and cleaning the data and presenting car concise list provides customers with full understanding of their sus portfolio. Great. What are some of the what are the some of the challenges in that? So maybe also technical challenges in that journey? I'm so, I guess. I mean bringing data together from all those very data sources is never like easy. But like what are some of the technology challenges young to be solved in in creating that visibility? Yeah, and definitely it's about a lot of data. So, for example, in a bigger company you have millions of line items in expense reporting system and, yeah, what you seeing individual expense reports is typically not really in telling. So, for example, you just have description may expense report, while there is a hidden linkedin subscription hidden there. So definitely the experience that we built over the past six years how to identify on sus within the larger pull of data is one of the key capabilities that you need to have their perfect. Maybe rounding it up a bit, what are some of your recommendations you can share for implementing a successful Zass management program and making it making it impactful for the organization? Yeah, so what we see our customers doing successfully is to set up software review board, so having something which is cross department and making sure that software is properly managed and purchased with Saus there is this key on difference that subscriptions are not always there, but you are able to cancel them at every renewer. So having not just initial procurement process in place but also periodic review is crucial if you want to have a streamline portfolio and optimize cost and yeah, we see that just by introducing creasibility you already are able to substantially improve how sauce is managed. So definitely starts with full discovery and Sus transparency using automated tools, and then after that is about having good insights how software is being used, on good grasp on renews so that you can be effective about your management. And these are some of the things which make for a very successful sus management program fantastic. To Jean. It was really great to get some of your first and insights with with your background. I think the whole...

...space off sus management is still in its infancy as we see an explosion of the ecosystem going on. So I'm excited that we are in this journey together and and see much more to come. So looking forward also to the upcoming disastro and your conference, some of one of the biggest conferences on Zas in the world, where we will, as a company, also be and understand where the ecosystem is further developing. So thank you again for being my guest on unleash I t so I hope you all enjoyed the sessions. So see you, see you next time. Thank you to Jean. Thank you you've been listening to unleash. I T to ensure that you never miss an episode. Subscribe to the show in your favorite podcast player. If you'd like to learn more about enterprise architecture and tools to help unleash your businesses digital capabilities, visit lean ix dotnet. Thank you so much for listening. Until next time,.

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