Founding a company in a new industry: why we did it
Eldar Tuvey | MAY 14, 2022
To set the scene, my brother and I have been working in B2B SaaS since 2002. I hate to admit we’ve been around this long, but that’s 20 years of seeing the cloud revolution from a front row seat. In that time it was called a bunch of different names, from ASP to on-demand, but the defining essence was that we would go to various prospects and customers and urge them to adopt a SaaS approach that would be cheaper for them to maintain, easier to keep up to date with new features, flexible to add or remove users, and cheaper than capital expenditures for on-prem hardware/software.
It was an easy case to make — which is why for the last 20 years, corporate customers converted to SaaS in the thousands, adopting a wide variety of SaaS tools required to power their businesses.
While SaaS has delivered on its initial promises, it has come with its own added costs for the enterprise. The sheer volume of applications used by the modern enterprise has led to widespread budget over expenditure. Our data shows that a typical business is overspending by about 20% to 30% per year on SaaS. At the same time, managing this spend across multiple applications and geographies requires levels of time, effort and specialization that most finance and IT teams lack. They need help.
The picture becomes increasingly complex when you consider how a tech stack changes as a business grows over time. You need more and more applications and licenses as your team grows, and annual spend is continuously rising as you hit renewal periods throughout the year. So far, our test customers have an average of 78 separate live SaaS contracts that require renewals throughout the year.
The current difficult economic environment makes this a critical time for enterprises to get their SaaS spend in check, with Gartner projecting annual SaaS spend to exceed $145 billion in 2022, up nearly 20% over 2021.
But if lowering your SaaS expenses and managing constant renewals were simple tasks, you wouldn’t need outside help.
In late 2021, we set out to help enterprises meet these challenges by forming Vertice. Our mission was to reduce the cost and time taken up by endless SaaS renewals, procurement, approvals and management.
Having been on both sides of the explosion in SaaS over the past two decades, as both a customer and as a vendor, we knew we had valuable insights and solutions to help enterprises with their SaaS purchasing challenges.