If you're leading or building a SaaS company, you've undoubtedly witnessed the dramatic shifts in buyer behavior over the past four years. The initial push for growth at all costs gave way to spending cuts and a renewed focus on efficiency. You’ve also likely been on the other side — looking at your own costs and asking yourself, “How do we become more efficient?” In 2025 (and for the foreseeable future), AI is reshaping what’s possible, and pricing models are evolving faster than most can keep up with. Navigating it all takes clarity — and a bit of help from the right data.
That’s where Zylo’s 2025 SaaS Management Index comes in. Launching this week, this report is packed with insights into how businesses are managing SaaS spend, embracing AI, and staying efficient in a rapidly changing market. Let’s get into the insights:
1. Average SaaS Spending Grows for First Time Since 2021
According to data from Zylo, SaaS spending is growing after decreasing over the past three years, with an average SaaS spend of $49 million in 2024 (a 9.3% year-over-year increase). According to the report, decentralized purchasing and shadow IT are driving this growth, adding complexity to how companies manage and optimize their stacks.
As a SaaS founder, this could be seen as both a good and bad thing. On one hand, growing SaaS spending could indicate budget opening back up for purchasing and growth in the market. On the other hand, rising SaaS costs could hurt efficiency for your own company — Zylo’s report stated that the average cost of SaaS per employee is $4,830, a 21.9% year-over-year increase.
Unsurprisingly, AI is driving a lot of this change, which brings us to our next big takeaway.
2. AI Is Both the Opportunity and Challenge
AI isn’t just a buzzword — it’s a seismic shift. Spending on AI-native apps soared 75.2% year-over-year, according to Zylo, as companies increasingly rely on tools like ChatGPT and Microsoft Copilot.
Data from the 2024 SaaS Benchmarks Report shows a similar trend towards AI purchasing but on the flip side — AI and vertical SaaS companies are growing faster than horizontal SaaS.
The takeaway: the opportunity is undeniable, but it’s not without its headaches. AI is here to stay, and in order to ensure the tradeoff in efficiency, results, or even decreasing head count pays off, it will be critical to keep an eye on spending as it relates to the overall investment in AI.
As quoted in the report:
Organizations of all sizes must embrace SaaS Management by investing in team resources, tools, and processes to not only control expenses but also capitalize on opportunities for innovation. SaaS Management becomes mission-critical at AI permeates the software landscape and pricing models shift away from seat-based pricing to consumption- and outcome-based approaches.
Scott Dorsey, Co-Founder and Managing Partner at High Alpha
3. The Pricing Model Revolution
One of the most interesting trends in both reports, and something that adds even more complexity to tracking and forecasting SaaS spend in your own company, is how SaaS companies are rethinking pricing models, especially around AI. Consumption-based and hybrid models are becoming the norm, with examples like Salesforce ($2 per conversation) and Microsoft Copilot ($4 per hour). These models offer flexibility but can complicate budgeting and financial planning, requiring SaaS leaders to be more strategic than ever.
Data from our own report also shows that over half of SaaS companies in 2024 said they launched AI products or features in the last year, and nearly 41% of those companies are monetizing AI (and experimenting with pricing models).
AI and the changes in pricing strategies from traditional seat-based pricing to usage, result, and output-driven pricing will continue to weave their way into existing SaaS products. As a buyer, you need to not only prepare for it, but to expect it — Zylo reported that 66.5% of IT leaders have experienced unexpected charges on SaaS due to consumption-based or AI pricing models. Gartner® also reported that, by 2027, 70% of the top 20 SaaS vendors by revenue will offer consumption-based pricing for a portion of their product portfolio.
Dive Deeper
With the emergence of generative AI and its impact on both efficiency and pricing strategies, managing SaaS spend is more critical than ever. For a deeper dive into the data and key findings, download Zylo’s 2025 SaaS Management Index and High Alpha’s 2024 SaaS Benchmarks Report.
