Unmanaged SaaS Applications: Risks, Costs + Solutions

As organizations scale and adopt more tools – our data shows that the average SaaS stack grows by 7% each year – managing this spend has become both a strategic priority and a growing challenge. While SaaS applications are essential for productivity, collaboration, and innovation, unchecked growth in your tech stack can quietly erode your budget.

For all the value SaaS delivers, it can also introduce complexity, duplication, and waste – especially when applications go unused, underutilized, or unmanaged. In fact, our recent shelfware report shows that as many as 66% of applications aren't fully utilized, contributing to vast amounts of financial wastage.

A major contributor? Unmanaged SaaS applications.

In this post, we’ll break down what unmanaged SaaS means, how it happens, the risks it creates, and what you can do to take back control.

What is meant by unmanaged SaaS applications?

Software licenses and subscriptions that go ungoverned in your organization’s tech stack are considered “unmanaged” applications.

This could refer to applications that haven’t been officially procured through a SaaS purchasing platform, those with undocumented contract terms, or even applications in use without the company’s knowledge – commonly known as Shadow IT.

How do SaaS stacks become unmanageable?

1. Decentralized SaaS procurement

When individual teams or employees make software purchases without approval, your tech stack can spiral out of control. This phenomenon, also known as maverick spend in SaaS, refers to purchases made outside approved channels—often without involving IT or finance.

Without a centralized SaaS procurement software or oversight, duplication and waste are inevitable.

‍2. Dispersed workforces

Distributed workforces have fueled a surge in maverick spending, with many employees now independently sourcing the tools they need – frequently outside the purview of procurement, IT, and finance.

3. Poor stack visibility

Even when software is officially approved and purchased through the right channels, it can quickly become "unmanaged" if it's not properly tracked or documented. This issue is especially common in large organizations operating across multiple teams, departments, or locations.

Without a centralized system to log and regularly update details on all SaaS tools in use – including ownership, usage levels, contract terms, and renewal dates – visibility quickly erodes. Over time, tools may continue to be paid for despite going unused or being completely forgotten, quietly inflating software costs without delivering any value.

The consequences of unmanaged SaaS applications

Over time, software can easily slip into an unmanaged state – often without anyone noticing.

But what impact does this have on your bottom line?

If your goal is to reduce costs, it’s crucial to understand how an unmanaged SaaS portfolio can quietly drive up spending and lead to significant waste.

Here are the key consequences to watch out for:

SaaS duplication – When teams independently buy software without coordination, it often leads to duplication – multiple tools doing the same job. This is especially common with collaboration platforms like Asana or Monday.com, where personal preference can drive procurement.

Unused software – The average organization now runs 134 SaaS applications, but not all of them are being put to good use. 21% of software goes completely unused, while another 45% is underutilized, leaving companies paying for tools that deliver little to no value – and often wasting millions of dollars annually as a result. This problem is made worse by auto-renewing contracts and poor visibility. Licenses often renew quietly, even after teams have moved on to other tools.

Security and compliance risks – Unvetted or shadow software use can lead to serious security risks. When employees use unsanctioned tools to store or process sensitive data, IT teams lose visibility and control – potentially breaching compliance standards.

How to take control of your SaaS portfolio

Managing your SaaS stack effectively is one of the fastest ways to cut wasted spend. With procurement, IT, and finance teams all navigating growing software sprawl, here are three key steps to get your stack under control:

1. Get full visibility

You can’t manage what you can’t see. The first step is gaining a clear view of all the SaaS tools currently in use across your organization – including shadow IT.

Start by documenting key details for each application:

• Purpose and function
• Usage and adoption levels
• Cost
• Contract length and renewal terms
• Billing cycles

This foundational data helps uncover inefficiencies – but the real value comes from turning those insights into action. With the help of procurement analytics software, you can identify underused tools, spot spend anomalies, and prioritize the highest-impact opportunities for optimization.

2. Eliminate redundant tools

With visibility comes the power to cut costs. Review your stack to identify:

• Unused or rarely used licenses
• Duplicate tools serving the same purpose
• Applications delivering little to no ROI

Your goal should be to streamline your software portfolio – retaining only the tools that provide business value. For instance, while a CRM like Salesforce might be essential to your sales pipeline, you may find other apps that no longer justify their cost.

3. Centralize procurement

Decentralized software purchasing is a major driver of SaaS sprawl and overspending. By centralizing procurement through a dedicated SaaS purchasing platform, you can ensure:

• All purchases align with business needs
• Negotiations are handled by experienced stakeholders
• Contracts are standardized and tracked through effective SaaS contract management
• Visibility over renewals is maintained

It's also worth appointing clear owners for each tool to stay on top of usage, renewals, and ROI.

SaaS spend management matters more than ever

With SaaS spend having increased 16% in the last year alone and 66% of applications going unused or underutilized, the cost of inaction is mounting.

Without centralized visibility, budgets are quietly eroded by unused licenses, duplicate tools, and missed renewal deadlines – issues that often go unnoticed until it’s too late. Solving them at scale requires more than spreadsheets though, it demands a dedicated SaaS purchasing platform and a strategy focused on leveraging data for smarter negotiations.

See how one company was able to optimize their spending with Vertice, achieving average SaaS discounts of 32%, while saving as much as $155,000 on a single contract.