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Cutting software costs

Software Savings Benchmarks: What Is a Realistic Target?

What savings a software asset management program can realistically deliver, what drives the range, and how to set a target finance will believe.

By the MI Solutions SAM team9 min read2 exhibits

"How much will we save?" is the first question every SAM program is asked. The honest answer is that it depends, but that is not an answer a CFO accepts. This article explains what drives the range, what the published benchmarks say, and how to set a target you can defend and beat.

What the benchmarks say

30%average first-year reduction in software expenses for mature, tool-supported license optimizationGartner, 2016
$21Maverage annual spend on unused SaaS licenses in Zylo's datasetZylo, 2025
35%of organizations say SaaS waste increased in the past yearFlexera, 2025

Gartner's often-cited research found that organizations with mature software license optimization processes, automated with SAM tools, reduced software expenses by an average of 30% within the tools' first year. Zylo's 2025 data shows how much room there often is, and Flexera's 2025 survey suggests the room is growing.

Those figures describe what is possible, not what every organization will achieve in year one. Gartner's figure comes from mature programs; Zylo's from a dataset that leans toward large enterprises. Your number depends on where you start.

What drives your number

Exhibit 1
The first year captures most of the opportunity in an unmanaged estateIllustrative planning range for first-year savings by starting maturity, % of addressed spend0%5%10%15%20%25%22%Level 1 Reactive16%Level 2 Tracked10%Level 3 Connected6%Level 4 Optimized3%Level 5 GovernedIllustrative planning midpoints, not guarantees. See the SAM maturity model for the levels.
01Starting maturity

An estate that has never been reviewed holds more waste. See the SAM maturity model.

02Vendor mix

Per-user SaaS and productivity suites usually offer more reclaim and right-sizing opportunity than infrastructure contracts.

03Contract timing

Savings at renewal can only be captured when renewals come round. A year with few renewals is a year with fewer savings.

04Decentralization

The more teams buy their own tools, the more duplication there is to consolidate.

Vendor mix matters as much as maturity. The same program, applied to different kinds of software, produces very different percentages:

Exhibit 2
Per-user SaaS offers the largest percentage savingsIllustrative first-year savings range midpoint by software category, % of category spend0%10%20%30%Departmental SaaS24%Design and creative21%Productivity suites14%CRM and sales tools13%Security tools9%Database and middleware7%ERP5%Illustrative. Capacity-licensed and ERP contracts are larger but have fewer idle seats; savings there comemostly from negotiation and right-sizing capacity.

How to set a target finance will believe

  1. Build it per vendor

    Estimate each lever for your top 10 vendors from your own usage data.

  2. Discount for confidence

    Halve speculative savings; keep the evidence-based ones.

  3. Phase it by renewal date

    Show when each saving can land, quarter by quarter.

  4. Agree the definition

    Decide with finance what counts as a saving before you start.

  5. Report identified and realized separately

    See SAM KPIs.

For a quick first range, try our savings estimator.

After year one

Savings change character after the first year. There are fewer large one-off wins, and more value from preventing new waste, keeping renewals governed and negotiating better terms. A good second-year target is usually smaller in percentage but more predictable, and the cumulative saving keeps growing.

How MI One helps

Frequently asked questions

Is 30% realistic?

For some estates in some years, yes. For planning, a lower, evidence-based target you can beat is more useful.

Do savings continue after year one?

They change character: fewer large wins, more prevention of new waste and better renewal terms.

Should the target include cost avoidance?

Report it, but separately. Run-rate savings and avoided costs mean different things to finance.


Sources

See where your software budget goes

Bring your five largest vendors to a 30-minute call. Our SAM experts will show you where the savings usually hide, and how fast MI One can surface them.