Amid SaaS Explosion, Zylo Aims To Help Organizations Rein In Runaway Software Spending
Seasoned employees of enterprise-level organizations may remember a time, not too long ago, when all of a company’s software purchasing was done through IT. Those days came to an end when software-as-a-service exploded onto the tech scene, giving way to a new era of decentralized buying. Since then the SaaS market has shown steady growth, reaching $58.6 billion in 2017 and predicted to grow to $99.7 billion in 2020.
Today, decision-makers in each department of a company typically have the authority to purchase necessary software tools for their team. That’s good news for employees, but it can lead to situations where organization leaders have no idea who’s using which products—or even how many apps they’re paying for.
“ Our average customer has over 400 Cloud subscriptions in their business that they renew every year ,” said Eric Christopher, co-founder and CEO of Zylo. “We generally find that’s two to three times what a company expects.”
Zylo is an Indianapolis-based startup that wants to help organizations close these gaps in purchasing knowledge. Its web-based software platform finds all applications in use across departments and collects them into a single database alongside relevant account information. Managers can then use the platform as a system of record to identify waste, measure usage and maximize returns on SaaS spending.
Bringing Clarity to the Chaos of SaaS Spending
The managerial tasks mentioned above fall into the category of “SaaS optimization,” a subject that’s been gaining interest as the number of Cloud-based software solutions grows exponentially. Christopher is no stranger to this complicated topic; he and the entire leadership team at Zylo are alumni of ExactTarget, the Indianapolis marketing tech company that sold to Salesforce for $2.5 billion in 2013.
Following his departure from ExactTarget and subsequent VP roles at two other startups, Christopher co-founded Zylo with local venture studio High Alpha. Zylo went on to raise $3.3 million in seed funding in 2016, securing additional guidance from GGV Capital and SV Angel—two prominent Silicon Valley firms—as well as Hyde Park Venture Partners and a handful of SaaS industry leaders.
With this high-profile support and expertise, Zylo has emerged as an early leader in the SaaS optimization space, which includes about a dozen other companies like Cleanshelf, Meta SaaS and Alpin. While the size of Zylo’s recent funding round separates it from similar startups, there are larger, well-funded companies such as Freshworks and Ivanti that currently offer products similar to Zylo within a suite of software solutions. And there is always the risk that an enterprise company such as Salesforce could decide to build its own solution, undercutting the efforts of these smaller companies.
In an effort to differentiate, Zylo is developing AI tools that aim to help customers strategically choose software products by using data to eliminate the guesswork. Their plan is to grow the platform to something much bigger than a tool for finding waste.
“As much as spend is an important measure, [optimization] is really about how products work together,” Christopher said. “A big vision of ours is helping with recommendations and product selection.”
A Smarter Future for SaaS Adoption
In order to make its automated recommendation tools a reality, Zylo is working to gather customer usage data on a wide variety of SaaS applications. Its ideal customers are Cloud-first organizations with more than 1,000 employees; Uber, Zendesk and Eli Lilly are a few of the companies currently supplying vital data through Zylo’s platform.
Zylo would eventually like to expand its product to suit the needs of smaller organizations, but for the time being, enterprise companies have the greatest need for SaaS optimization and can provide the most useful information. If all goes well with Zylo’s planned developments, Christopher is hopeful it could become available to smaller businesses by the end of this year.
And although Zylo’s platform can be used to simply find and cancel unwanted software subscriptions, the company wants to ultimately be seen as an ally to SaaS providers as well as buyers. By helping customers discover the best products for their needs and optimize their usage, Zylo hopes it can encourage smart software adoption and spur business growth for all parties.
“We want [SaaS providers] to look at the idea that we can help drive transparency. In fact, if we uncover lack of use and adoption earlier in the contract, we’re actually going to be a great friend,” Christopher said.