A data analysis of what companies actually spend on software in 2026 — per employee, per portfolio, and per wasted license — plus who controls the budget and why the bill keeps climbing faster than everything else you buy.
The average company now spends $4,830 per employee on SaaS, a 21.9% jump in a single year, according to Zylo’s 2025 SaaS Management Index, which tracks over $40 billion in managed spend. That is the first increase in average SaaS spend in three years, and it is being driven by vendor price hikes, more complex licensing, and a rush into AI tools. The numbers below show where the money goes, how much of it is wasted, and why 2026 is the year SaaS budgets stopped drifting and started spiking.
Key takeaways
- SaaS spend hit $4,830 per employee in 2025, up 21.9% year over year, per Zylo — the first rise in three years
- Companies waste roughly $21M a year on unused licenses, a 14.2% increase year over year, per Zylo; Zylo’s 2026 index puts average waste at ~$19.8M (Zylo)
- Lines of business control 70% of SaaS spend; IT owns just 26.1%, per Zylo — SaaS budgets have left the IT department
- 66.5% of IT leaders reported unexpected charges from consumption-based or AI pricing models (Zylo)
- SaaS prices rose 11.4% in early 2025 against 2.7% G7 consumer inflation — about 4x faster, per Vertice; the SaaS inflation rate hit 14.7% in November 2025 (Vertice)
- AI-native application spending surged 75.2% year over year (Zylo)
- Gartner forecasts $1.44 trillion in worldwide software spending in 2026, growing 15.1% (SaaStr, citing Gartner)
How much do companies spend on SaaS per employee?
Per-employee SaaS spend reached $4,830 in 2025, up 21.9% from the prior year, per Zylo. Vertice, using a broader spend definition, puts the figure closer to $9,100 per employee at the end of 2025, up from $8,700 in 2024 and $7,900 in 2023 (Vertice). The methodologies differ, but the direction is identical: the per-head cost of software is rising fast.
At the company level the totals are large. Zylo reports small companies average $11.5M in annual SaaS spend, while enterprises above 10,000 employees average $284M (Zylo). Software now absorbs roughly $1 of every $8 a typical organization spends (Vertice).
How much SaaS spend is wasted on unused licenses?
A lot. The average organization wastes about $21M a year on unused SaaS licenses, a 14.2% increase year over year, per Zylo. Zylo’s 2026 index reports average waste of roughly $19.8M as tracking improved, with license utilization climbing from 47% to 54% (Zylo) — meaning nearly half of all purchased seats still sit idle.
The problem is widening in perception too: 35% of IT asset managers say SaaS waste has grown over the past year, per the Flexera 2025 State of ITAM Report. Unused seats survive because offboarding lags, bundles ship features nobody adopts, and no single owner watches the whole portfolio — the same dynamics we cover in our SaaS sprawl analysis.
Who controls the SaaS budget — IT or the business?
The business does, and it is not close. Lines of business now account for 70% of SaaS spend, while IT controls just 26.1%, per Zylo. A separate Capgemini figure cited by Zylo puts 48% of SaaS expenditure outside IT’s direct control (Zylo) — a lower number, same story.
That decentralization is the engine of both sprawl and waste. When marketing, sales, and product each buy their own stack, portfolios balloon past 275 applications on average and duplicate tools accumulate (Zylo). The visibility gap this creates is the subject of our shadow IT statistics, and it is why consolidating vendors starts with knowing who is buying what.
How fast are SaaS prices rising?
Faster than almost anything else a company buys. SaaS pricing rose 11.4% in early 2025 against a 2.7% G7 consumer inflation rate — roughly 4x faster, per Vertice. The SaaS inflation rate then accelerated, peaking at 14.7% in November 2025 and running at 13.2% in March 2026 (Vertice).
Vendors also lean on renewals to book increases: in Q4 2025, 28% of SaaS contracts renewed globally reflected a reduction in value with no matching price cut — shrinkflation by another name (Vertice). A $1M software bill in early 2024 would cost an extra $114,000 a year later for the identical subscriptions.
Why is AI making SaaS budgets harder to predict?
Because consumption pricing breaks the flat-subscription model budgets were built on. Two-thirds — 66.5% of IT leaders — reported unexpected charges from consumption-based or AI pricing models, per Zylo. When cost scales with tokens, queries, or seats-in-use, the annual number stops being a line item and becomes a variable.
Demand is fueling the surprise: AI-native application spending jumped 75.2% year over year (Zylo). At the market level, Gartner projects $1.44 trillion in worldwide software spending for 2026, up 15.1% (SaaStr, citing Gartner) — with AI the single largest driver of the increase.
How big is the average SaaS portfolio?
Sprawling, but stabilizing. The average company runs 275 SaaS applications, per Zylo’s 2025 index (Zylo), rising to roughly 305 in the 2026 data (Zylo). Small companies average 152 apps; large enterprises average 660 (Zylo).
Portfolio growth has nearly flattened — a small annual change — even as spend jumps, which tells you the cost increase is coming from price and AI, not from adding more tools. That is the core buying insight: you are paying more for a portfolio that is barely growing. Trimming it is the fastest lever, and our directory exists to help buyers pick the one tool worth keeping in each category.
Frequently asked questions
How much does the average company spend on SaaS per employee?
About $4,830 per employee in 2025, up 21.9% year over year, per Zylo. Vertice’s broader measure puts it near $9,100 per employee. Both agree the per-head cost of software is rising sharply, driven by price hikes and AI adoption rather than by buying more tools.
How much SaaS spend is wasted?
Organizations waste roughly $21M a year on unused licenses, up 14.2%, per Zylo. Even after tracking improved, license utilization sits at just 54% (Zylo) — nearly half of paid seats go unused. Flexera found 35% of IT asset managers say SaaS waste grew over the past year.
Who controls SaaS spending in most companies?
Lines of business, not IT. Departments outside IT control 70% of SaaS spend, versus 26.1% for IT, per Zylo. This decentralized buying is the main driver of portfolio sprawl, duplicate tools, and the visibility gaps that let unused licenses survive unnoticed for months.
How fast are SaaS prices rising in 2026?
SaaS prices rose 11.4% in early 2025 against 2.7% G7 consumer inflation — about 4x faster — per Vertice. The SaaS inflation rate peaked at 14.7% in November 2025 and ran at 13.2% in March 2026 (Vertice), far outpacing every consumer price index.
Why do AI tools make budgets unpredictable?
Because they charge by consumption. 66.5% of IT leaders reported unexpected charges from consumption or AI pricing, per Zylo. When cost scales with usage rather than a flat seat price, the annual figure becomes variable — and AI-native app spending grew 75.2% year over year, magnifying the exposure.
How much is total worldwide software spending in 2026?
Gartner forecasts $1.44 trillion in worldwide software spending in 2026, up 15.1% (SaaStr, citing Gartner). Software is among the fastest-growing IT categories, with generative AI the single largest driver of the increase.
What this means for buyers
The 2026 spend data makes the 80/20 case on its own. Costs are rising 21.9% per employee while the portfolio barely grows — so the extra money is buying price increases and idle licenses, not capability. With nearly half of paid seats unused and lines of business controlling 70% of the budget, the waste is structural, not accidental.
The fix is not another SaaS-management dashboard bolted onto a sprawling stack; it is buying fewer, better tools so there is less to waste. When SaaS prices climb 4x faster than inflation and AI pricing turns every renewal into a surprise, the cheapest license is the one you never bought. That is the whole thesis behind our directory and how we score each pick: one strong tool per category beats a longer shortlist and a bigger bill. For the sprawl and shadow-IT dynamics feeding these numbers, see our SaaS sprawl and shadow IT analyses.