Why Building for Scale and Creating Benchmarks Matters

We’ve uncovered a few kernels of truth I believe can be applied to any potential category leader: Creating scale early and identifying unique benchmarks matter.

Article by
Eric Christopher

One of my favorite quotes about leading a category comes from High Alpha’s Scott Dorsey:

Customers want to buy from category leaders, employees want to work for category leaders, and partners want to partner with category leaders.

I couldn’t agree with these sentiments more. And, in the three years since my co-founders and I started Zylo, I feel fortunate to have contributed firsthand with them to develop a product that leads an emerging category, SaaS management.

Along the way, we’ve uncovered a few kernels of truth I believe can be applied to any growing SaaS-focused business or potential category leader. In a few words: Creating scale early and identifying unique benchmarks matter.

Solve Discrete Problems With a Big Vision

In the beginning, we knew that Zylo could help solve the practical “chaos” problem of SaaS proliferation. The SaaS market’s revenue cap has grown about 16 percent every year, and in 2020, it will be worth about $110 billion, according to Gartner. This incredible growth is the result of more and more businesses and employees purchasing SaaS, which can often lead to the chaos of shadow IT.

We also knew with the analysis and insights we provided, our customers would save money on software costs. According to our data, many enterprise businesses now invest in total about $10,000 per employee in SaaS tools and services, and everyone wants the most value from their money.

And even at the early stages, our solution helped clients optimize their SaaS license usage, as only about 60 percent of licenses are actively used in any given 30-day period. Why pay for what you don’t use, right?

Each of these individual problems represented great opportunities in and of themselves for novel solutions. But what excited my co-founders and me was when we realized Zylo had the potential to be more than a simple chaos-correction, cost-containment, or license optimization tool.

We discovered that if we analyzed data at a massive scale–that is, large enough to ingest entire multi-year volumes of supplier spending transactions for large enterprises–and build a solution that created actionable outcomes, we could make not just a single solution but an entire management platform that solved multiple problems at once. This led us to build the Zylo product with a massive data set as our standard for the scale of our solution.

The result, the Zylo Discovery Engine and Saas management platform, today helps clients manage $10 billion in cloud spending identified accurately from more than $130 billion in supplier transactions.

Focusing On The Problem

When we started working with our first three or four customers, trends emerged that validated that scalability would be one of our highest priorities.

But acknowledging that was easy, building a solution that solved multiple problems at once meant that we had to work to solve every problem with future scalability in mind.

Today, our solution, a machine-learning analysis engine that detects every SaaS instance by ingesting large volumes of supplier spend data, solves many of the original problems we identified early on because we prioritized building for scale first.

Large Scope, Tight Focus

We are at an exciting point where technology is all designed to make people’s lives better. But there’s so much of it, it creates a lot of inefficiencies.

Solving the early problems I mentioned above by ingesting high volumes of data at speed meant that we had to prioritize identifying the right data. In a sense, our solution’s job is to find the needles (cloud and SaaS application spending) in the haystack (all supplier spending transactions).

That means, on average, the Zylo Discovery Engine turns away about 93 percent of the data it processes. While our engineering infrastructure allows us to ingest large volumes of data quickly, we focus on solving the problems found in only a small part of it.

Why do we ignore more than 90 percent of all the data we’re able to ingest and analyze? We focus only on the information we need to inform decisions and drive actions for the problem set we’re attempting: SaaS.

Our goal is to provide data to change business decisions our customers make on this software. That’s what we identified as the opportunity for doing something extraordinary with an impressive set of data. And when customers are making decisions based on actionable data exclusively, you’ve uncovered truly scalable product value.

That’s what’s exciting about the data set that we have — we’re starting to uncover these inefficiencies and opportunities for improvement that no one else can see. It’s unpacking the surface level problems — which are significant in their own right — but at the same time getting to the root of the core problem.

Benchmarks Build Credibility

That said, not everyone understands the problem we’re trying to solve. And when we’re analyzing hundreds of billions of dollars in supplier transactions, it’s easy for the novelness of our solution to get lost in the sheer volume.

Creating benchmarks help you and your customers find the sweet spot between expectations and credible outcomes. In a sense, you have to “enlighten” the customer about the problems they face.

They also provide near-instant credibility in an emerging category. In our example, SaaS management is still establishing itself as a new strategic approach compared to traditional IT asset management or software asset management practices.

But developing a decent set of industry benchmarks takes time, effort, and a mindset for long-term planning. Although we’ve always had a core set of internal benchmarks as guideposts, these rarely translate directly to a client’s immediate needs.

It took Zylo nearly three years to fully develop a set of benchmarks for enterprise SaaS management that we believed captured the scope of our solution. The result, our recently released report, State of Enterprise SaaS Management, clearly illustrates the problems created by unmanaged SaaS — and the opportunities that active SaaS management can unlock.

The benchmarks not only help enlighten and inform our prospects and customers but also clearly establish Zylo as the market leader in our category, enterprise SaaS management.

Trust Starts Here

At Zylo, one of our core cultural values is that “trust starts with me.” It means that no matter what we do — major or minor, external or internal — a trusting relationship is the basis of our work.

And to a large extent, I believe our efforts to build a solution with massive data capabilities and to establish industry benchmarks reflect this value. When customers prefer to work with a category leader, as Scott said, that preference stems from trust.

That trust has helped us attract the biggest and best enterprise customers. Our confidence in each other has allowed us to build the most substantial amount of data possible and the infrastructure to effectively analyze it, creating reliable opportunities for improved business outcomes for our customers.

Our vision and the trust we’ve established as the category leader who can execute it are what set us apart competitively. And we don’t have any plans on scaling back or backing down from that leadership position.

The largest independent enterprise SaaS management platform, Zylo transforms how businesses manage their SaaS application portfolios. By creating transparency around SaaS spend, license utilization, and user feedback, Zylo provides a centralized system of record that empowers business leaders to discover, manage, measure, and optimize their SaaS investments. Zylo was noted as a Rising Star in Forbes’ 2018 Cloud 100 list, the definitive list for private cloud companies, and was recognized as a Cool Vendor by Gartner.

For more information on Zylo or to request a demo, visit zylo.com or follow @getzylo.

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