SaaS spend audit: the Zylo methodology plus the Microsoft 365 price creep timeline.

The Zylo 2026 SaaS Management Index reports that the average company manages 305 SaaS applications. This figure is likely an undercount because it reflects only applications that IT has visibility into; shadow IT, the tools purchased directly by individual teams without central procurement involvement, typically adds 20-40% to the discovered total when a proper audit is conducted. Shadow IT is not rogue spending; it is the natural result of teams solving real problems faster than a procurement process can keep up. But it compounds the waste problem because shadow IT applications auto-renew without anyone reviewing whether the problem still needs solving.

The 53% shelfware figure means that, of the average $55.7M annual SaaS spend, approximately $29.5M is paid for tools with less than one login per licensed seat in the prior 90 days. The causes are consistent across industries: annual contracts that outlast the project they were bought for, overstated seat counts locked in during a growth period that has since reversed, tools acquired through mergers that were never rationalised, and the same behavioural bias that keeps a consumer paying for a gym membership they have stopped using.

Microsoft 365 price creep timeline

The rationalisation rubric

A SaaS rationalisation project follows five steps. First, the discovery audit: pull all AP records and credit card charges for the last 12 months, identify every vendor that recurs. Add shadow IT by asking each department head for their direct SaaS purchases. The combined list is your universe. Second, the usage audit: for each tool, pull 90-day active-user data from the admin console or from SSO provider logs. Any tool with under 20% active seat utilisation is a shelfware candidate.

Third, the overlap audit: map tools by function (project management, communication, analytics, CRM, HR). Identify categories where two or more tools perform overlapping functions. The most common overlaps: project management (Asana + Jira + Monday.com + Trello all live in the same portfolio), documentation (Notion + Confluence + Google Docs), and analytics (Amplitude + Mixpanel + Google Analytics 4). Consolidating two tools to one in any category removes one contract, one renewal date, one vendor relationship, and the cognitive cost of context-switching between tools.

Fourth, the renewal calendar: list every contract by expiry date. Negotiations that start 90 days before expiry have the most leverage; negotiations that start 14 days before expiry have almost none. Set Slack or calendar reminders at T-90 and T-30 for every annual contract above $1,000/year. Fifth, the negotiation: for any tool with renewal value above $10,000/year, use a competitive quote or RFP-threat lever. See the negotiation scripts page for the B2B SaaS contract renewal script.

SaaS management tool comparison

For the shadow IT angle, see shadowitcost.com. For IT budget planning, see itbudgetcalculator.com.