Software That Never Sleeps: Why Usage-Based SaaS Is Breaking Traditional IT Governance

By Stephanie Day, VP SaaS Management, Calero

For years, enterprise software economics followed a familiar script. Organizations negotiated licenses annually, tracked entitlements periodically, and optimized costs during renewal cycles. Software asset management (SAM) and IT asset management (ITAM) processes were imperfect and highly manual, but sufficient for a world where ownership and usage were relatively static.

That world is disappearing.

Modern subscription software runs continuously, scales automatically, and increasingly charges based on how it is used, not how many people are assigned licenses. Yet most software asset management practices are still built around periodic reviews, fixed entitlements, and renewal-driven optimization. This creates a gap between how software is consumed and how it is governed – and that gap gets bigger every day.

Always-Running Meters

As economic pressure to rein in costs grows and security concerns around unmanaged SaaS intensify, many organizations are confronting a hard truth: legacy control models were never designed for software that charges by consumption.

It’s a bit like the old pay-per-minute mobile phone plans. “Pay for what you use” sounded reasonable until a teenager joined the family plan or a relative forgot to hang up. The bill arrived, overage charges piled up, and no one could quite explain how it happened.

Now multiply that dynamic across hundreds of SaaS applications. Every login, transaction, API call, or unit of data storage becomes a running meter, constantly ticking across every user, every team, every day – often invisible to IT.  The result is that usage-aligned pricing is quietly replacing fixed costs with continuous variability. Each overlooked integration or automation can quietly increase consumption, racking up hundreds of thousands in overages before anyone notices. 

Multiplied Risk 

Management of these dynamic pricing models is further complicated by the explosive volume of SaaS applications arising over the past decade, fueled by speed, accessibility and decentralization. Business units trial tools inexpensively, adopt them quickly, expense them easily, and operate them with minimal participation from centralized IT.

In many cases, this autonomy delivered meaningful productivity gains.  It also produced long-tail SaaS sprawl.

For many years that sprawl was tolerable, if not manageable. Redundant applications, overlapping capabilities, and dormant licenses were inefficient, but rarely urgent. Annual audits and one-time cleanup efforts kept spend and risk within acceptable and predictable bounds. But that tolerance disappears when SaaS is no longer priced as a fixed subscription. Each unmanaged application now represents not just potential waste, but unbounded cost. 

In addition to budget surprises, organizations not prepared to govern consumption-based pricing must reconcile with the tremendous opportunity cost. Instead of getting one shot at optimization every 2-3 years, these licensing models invite quarterly and even month-to-month right-sizing and optimization. As most SaaS vendors will tell you, this creates a strategic opportunity to flex your SaaS spend to match changing fiscal cycles and evolving business needs. 

But exploiting those opportunities requires a day-by-day understanding of where over and under-consumption is happening and what is driving that behavior. Without that governance, enterprises are effectively agreeing to blank-check pricing and hoping usage stays reasonable.

Converging Pressures 

SaaS sprawl increases the number of applications to manage. Consumption-based pricing multiplies the speed at which costs accumulate. Together, they overwhelm governance models designed for a slower, more predictable environment.

At a recent conference, I attended three separate sessions on cost-optimization, shadow IT, and ITAM modernization, each excellent in its own right.  But I was struck by how similar the conversations were, even as the entry points were different. It occurred to me that cost, security and governance are no longer separate problems – they are manifestations of the same loss of control.

A dormant license is no longer just wasted spend – it represents an unnecessary access point. A heavily used integration is not only a performance concern, it may be a cost accelerator. Manual governance doesn’t just waste time and resources, it creates organization-wide risk.  

The convergence of consumption-based SaaS licensing against the backdrop of unchecked SaaS sprawl fundamentally breaks the governance models traditional ITAM practices are built on. Quarterly reviews are too slow. Annual reconciliations are irrelevant. By the time overconsumption is identified, you’re already on the hook for the spend. 

It’s not just manual processes that don’t scale. As software becomes more dynamic and issues of risk, cost and governance become inseparable, this reality is forcing tighter collaboration between IT, security, finance, and procurement. But that collaboration also exposes long-standing silos and blind spots. Data is fragmented. Tooling is disconnected. Each function sees part of the problem, but no one sees the whole picture.

It would be convenient to treat these converging pressures as temporary – a correction after years of rapid SaaS adoption. But that won’t be the case. Vendors favor consumption models because they align price to value. Teams favor SaaS autonomy because it accelerates outcomes. Economic pressure and security scrutiny aren’t going anywhere anytime soon.

For better or worse, this is the new reality of SaaS Management. 

What must change, then, is the operating model.

A New Era
Businesses need control now more than ever, but they won’t achieve it through the traditional means.

This explains why investment in automated SaaS management platforms is accelerating even as overall IT spending tightens. Organizations aren’t pursuing automation for incremental efficiency. They are trying to regain basic operational control of their business. 

When implemented effectively, modern SaaS Management Platforms help close the gap by shifting governance from periodic and manual to continuous and automated. When implemented effectively, they enable:

• Continuous visibility across sanctioned and unsanctioned applications
• Deep usage insights that reflects how software is actually being consumed
• Real-time automation that delivers license optimization at scale 
• Policy-driven governance that scales without additional headcount
• Early-warning signals for cost spikes, usage changes and security risks

It’s important to note that this path forward is not about re-centralizing software purchasing or decision making. SaaS autonomy is not the enemy. The new era of control is about combining visibility and automated guardrails to empower decentralized decision-making while protecting the organization from financial and operational chaos.

Organizations that make this shift will turn volatility into advantage, benefiting from clearer insight into value, fewer financial surprises, stronger security posture, and the ability to align spend with business needs. Those that wait will find themselves paying more, understanding less, and exposing themselves to increasing risk. 

In a world where software never sleeps, the time to modernize SaaS governance is now.