The economics of business software changed faster than most company budgets. In the illustrative case, a company retires $1 million in annual SaaS spend with a $500,000 build. The replacement produces about $925,000 in recurring savings. At a 9x multiple, that could add roughly $8.3 million in enterprise value. This session works through the calculation, keeps the cash and valuation cases separate, and shows where the math breaks.
The software budget changes by sector. Trade groups can nominate an anonymized member stack, and portfolio groups can use a pattern that appears across several companies.
The $8.3 million line in the software budget.
I work through the full illustrative model: $1 million in annual SaaS retired, a $500,000 build, roughly ten months to project-level payback as contracts roll off, and about $8.3 million in potential enterprise value if $925,000 of recurring savings reaches EBITDA at a 9x multiple.
The session
Open the software budget
A prepared company case exposes annual spend, renewal timing, workflow pain, and the systems employees barely use.
Run the replacement math
The audience works through the build cost, operating burden, cutover timing, cash return, and potential effect on enterprise value.
Choose what stays rented
The final step separates a credible replacement from a custom liability and produces a short sequence for the first candidate.
What people take home
- Find the replacement candidates hiding in the software budget.
- Underwrite the cash return and potential enterprise value without counting the same savings twice.
- Sequence one high-confidence replacement while leaving commodity and compliance-heavy systems in place.
The SaaS Replacement Economics Calculator
A decision tool for testing the full replacement program. It keeps operating cost, cutover timing, and switching risk in the model.
- A SaaS inventory ranked by spend, workflow pain, and renewal date
- A hard-dollar model that keeps potential enterprise value separate
- A diligence sequence for the first replacement candidate
Questions we work through
- Can $1 million in SaaS spend become $8.3 million in enterprise value?
- Which subscriptions have become economically indefensible?
- When should a company keep renting?
A note on the talk
The maintenance question gets easier after the replacement case survives the finance question.