Smart SaaS budgeting: Refine your spend strategy for 2026

The SaaS budgeting and planning season for 2026 is already upon us. The secret to thriving in the next year lies in smart SaaS budgeting that goes beyond simple cost-cutting to become your organization’s true competitive advantage. To get you started, we’re going to walk through how to build a robust SaaS spend strategy that ensures every dollar spent on software is directly fueling growth, innovation, and efficiency. 

Ready to transform your SaaS budgeting from a necessary evil into a powerful strategic tool? Let’s dive into:

• SaaS pricing trends you need to know for 2026
• Laying the foundation for smart and informed SaaS budgeting with visibility
• Optimizing the current SaaS stack to ensure every dollar is wisely spent
• Forecasting and strategically aligning spending with business goals
• Building spend governance and accountability with a tool like BetterCloud

2026 SaaS pricing trends impacting your spend strategy

The SaaS pricing landscape is transforming as we move into 2026. To exactly no one’s surprise, it’s being driven primarily by the high costs and flexible nature of Artificial Intelligence (AI) as well as ongoing IT demands for value alignment.

The overarching theme is a shift away from simple, fixed-cost or per seat pricing toward dynamic, value-based, hybrid, and consumption-oriented structures.

Rise of hybrid and usage-based pricing

Simple “per-seat” subscriptions are gradually getting replaced or augmented by fee structures that directly link cost to customer activity. As of 2025, according to a Metronome report, 85% of surveyed SaaS companies have adopted some form of usage-based pricing, up significantly from prior years, with 78% adopted in the last five years. 

There is clearly market acceleration toward usage-based pricing, demonstrated by an 8x year-over-year increase since 2024, signaling continued growth as we move into 2026.

The following models align the vendor’s cost to customer value:

• Usage-based pricing bills customers based on consumption metrics. Especially suitable for SaaS apps built on cloud infrastructure like data warehouses (think Snowflake) and API-first tools, invoicing metrics are API calls, storage capacity used, number of transactions, or even computing power. 

• Hybrid models balance customer cost predictability with vendor revenue stability. Thus, the most common model is likely to be hybrid pricing, which generally combines:
  • Fixed subscription base for platform access and essential features
  • Variable usage components like metered charges for overages, premium features, or AI processing

In that same 2025 Metronome study, consumption-based pricing adoption among SaaS companies reached 42% in 2025, up from 38% in 2024 and 29% in 2023. If this upward trajectory continues at the same rate into 2026, it could hit 45-50%. 

In fact, if you consider hybrid models, and that they already penetrate 31% of SaaS vendors, it’s likely to hit that upper range of the estimate. 

There’s consensus in the 2025 survey conducted by the German firm hy. As of mid-2025, research shows that while 54% of SaaS companies still use a per seat pricing model, 59% combine multiple pricing metrics in pricing.

While these pricing structures bring flexibility, they also make it difficult for organizations to predictably budget SaaS application costs. During negotiations, organizations should aim to set not-to-exceed metrics, volume maximums, to limit unpleasant invoice surprises and cost overruns. 

Emergence of AI-driven pricing 

The monumental operational cost and variable usage of AI features are driving a SaaS pricing structure overhaul. In the hy survey from summer 2025, when SaaS vendors were asked about pricing models they’d adopt for AI features in the future, 69% said it would be usage-based. This makes sense because unlike traditional SaaS apps, AI has incremental, high processing requirements, so there are no economies of scale.

While it’s still early to tell which of the following models will become common, organizations should be prepared to:

1. Token or credit-based: For generative AI tools, like ChatGPT, which operates based on large language models, pricing is often tied to the amount of compute required. Prices are measured in tokens, which are tied to a unit of data. Alternatively, organizations can pre-purchase usage credits, which are then consumed based on their AI usage.

2. Feature-specific metrics: AI-powered features within existing software, like an AI-summary generator in a cloud contact center app, are often metered separately, as an add-on to a base subscription.

3. Dynamic pricing: AI itself will be used for real-time pricing optimization. Algorithms analyze usage, market demand, and competitor pricing to dynamically adjust price points and discounts to shift demand to lower peak times.

New focus on value and outcomes pricing

In SaaS apps markets with many competitors, vendors are looking for new ways to compete and win. Another pricing method organization can expect is a shift from simply having a tool to the measurable results it delivers. To that end, there are two ways SaaS vendors can price their solutions:

1. Value-based pricing: Vendors aim to price their software based on the measurable business value a customer receives, rather than today’s cost-plus or competitor-matching pricing structure. 

For instance, a marketing automation tool might charge based on the revenue generated through its campaigns, rather than just the number of contacts in the database.

2. Outcome-based pricing: A more sophisticated type of value-based pricing where the invoice is tied to a guaranteed result. For example, a talent recruitment tool charges per successful hire made through the platform, or a security tool charges per detected threat blocked.

In late 2024, Zendesk rocked the CX world by announcing outcomes-based pricing. Called their AI Dynamic Pricing Plan, it’s “flexible pricing and usage model designed to make AI in service more accessible and adaptable for businesses.” As of fall 2025, they’re charging $150 per successful ticket resolution.

Then there’s Chargeflow, a fintech platform that specializes in chargeback automation. It often charges a percentage of recovered funds. If the dispute is lost, the client pays nothing. Thus, fees align directly with the customer’s resulting revenue..

Flexible contract terms 

The purchasing process is becoming less about a static annual renewal and more about continuous optimization. SaaS app buyers want elasticity in contracts, allowing them to scale usage up or down without the excessive penalties. 

And for SaaS vendors? To counteract SaaS app demand volatility, vendors will likely respond by offering deeper discounts or new features that serve to lock in predictable annual contract value (ACV) over a period of years.

According to the 2025 Pricing Trends Report: Usage-based Models and SaaS Growth by Maxio, 40% of SaaS agreements are now multi-year contracts, up from only 14% in 2022

Of course, to avoid surprise bills, customers will need a way to see and track their usage and corresponding charges. Therefore, over the next few years, vendors will have to increasingly provide real-time visibility into them.

In summary, 2026 will be a year when SaaS pricing becomes more complex. On the flip side, organizations will gain as SaaS app usage and spending become strategic. To best compete, IT will need a granular and dynamic SaaS usage and smart spend strategy. In turn, this SaaS spend strategy will be heavily influenced by AI consumption and the demonstrable value of the tools in the stack.

6 smart SaaS budgeting steps

Armed with how pricing and contracts are changing, and what you need to consider for AI-features, it’s time to get busy preparing your 2026 SaaS budget.

Step 1: Build a single source of truth with SaaS discovery 

Quite simply, no organization can create a solid budget for what you can’t see. Developing your SaaS spend strategy for 2026 begins with a complete inventory of all SaaS apps in your environment and total elimination of shadow IT.

If you haven’t done so already, conduct your discovery for shadow IT search using three primary methods:

1. Finance records within your accounting systems
2. Single Sign-On (SSO) and IT security logs for usage data
3. Employee expense reports and credit card statements for any apps that employees subscribed to without involving IT

Once you’ve identified all software in your organization, create a detailed inventory of them, including purpose, cost, user count, and department usage.

To make discovery and inventorying easier, as well as make it an on-going activity, your organization may want to deploy a SaaS Management Platform (SMP). Unified SMPs like BetterCloud are the best-in-class tool for unlimited visibility and continuous monitoring, in addition to other great features and functions.

Step 2: Review current contracts

There’s a chance you may need to change license counts or even switch SaaS providers before your current contract expires. Reviewing current contracts and planning when to make changes is important in SaaS budgeting. 

To make it easier in coming years, establish a vendor and contract management process to help you stay on top of vendors and contracts. It’ll help you avoid missing key SaaS cancellation or renewal deadlines, keep track of legal reviews, and ensure you’re getting the best deal possible. 

Some companies like to use contract management software solutions for this process. Recently, SaaS spend management software solutions have begun including contract management in their platform to eliminate the need for duplicate services.

SaaS spend management software allows you to proactively manage your contracts. Proactive contract management is crucial for controlling SaaS spending. Negotiate favorable terms with vendors, including flexible renewal options and clear termination clauses. Implement a centralized contract repository and automated renewal alerts to prevent missed deadlines and ensure you’re always getting the best deal.

7. Invest in a SaaS spend tool

The real reason most people struggle with SaaS budgeting is that it’s too much information to track by yourself. From numerous user seats to countless account managers and a multitude of line items, keeping track of everything can be a monumental task. In fact, the sheer volume of data necessitates a dedicated employee, if your cash flow allows for it.

Most companies don’t have that kind of spend available. This is why many invest in a SaaS spend management tool like BetterCloud helps organizations streamline and optimize internal software spend, utilization, contracts, and compliance by effortlessly housing and visualizing your technology stack.

Everything is automated so that you can spend less time managing spend and more time doing your job. It’s a lifesaver for teams of any level. For start-ups, it allows you to put the little things on the back burner so that you can focus on hypergrowth. For enterprise companies, it tracks the complicated webs between departments, managers, and different offices.

8. Analyze and adjust

There’s a chance you don’t get things right on the first try, and that’s okay!

Maybe you thought you’d use a software solution more than you do. Or maybe you underestimated how many seats you’d need for SaaS software. Tracking your SaaS spending after you’ve made your purchases is crucial to optimizing your SaaS budget.

Ask yourself: 

• Are we using these SaaS solutions enough to justify the cost?
• Is there a benefit to increasing our spend with a SaaS provider?
• Do we have enough seats for this SaaS solution?
• Could any of these products be classified as duplicates?

Adjust as you go. Remember, the right SaaS solution for your company today might not be the right solution three years from now. You need to keep an eye on how SaaS software grows with your company. Always be looking for ways to improve.

Some companies find contract management software useful. Another option is to use a SaaS spend-management tool, which allows you to proactively manage your contracts—crucial for controlling SaaS spending. 

This functionality is also found in the best all-in-one SaaS management platforms. With its centralized contracts repository and automated renewal alerts, you’ll never miss renewal deadlines. Best of all, it gives you the time to negotiate favorable terms with vendors, including flexible renewal options and clear termination clauses. 

Step 3: Optimize current licenses and apps for a smarter SaaS budget

Now that you’re familiar with all the apps and vendor contracts in the organization, it’s time to clean up and right-size your SaaS apps and licenses. In this step, to save money and know the exact number of apps and licenses your organization should use, you’ll do: 

• Usage reporting and tracking. Track usage patterns and identify overlapping functionalities and redundancies
• License reclamation: Identify and de-provision licenses for inactive users and solve the  “Jane left 2 years ago but still has a license” problem once and for all
• Tier downgrades: Analyze usage data to see if a team is paying for an ‘Enterprise’ tier but only uses ‘Pro’ features
• Consolidation and de-duplication: Find overlapping functionality, like those three different project management tools, which is key for smarter SaaS budgeting

Eliminating duplicate SaaS and inactive licenses optimizes spending, saves you money and frees up spend for new SaaS apps or strategic IT projects. In fact, if possible, standardize enterprise-wide SaaS apps for core functions, like project management or HR tools. This way, departments don’t contribute to the costly SaaS sprawl that prevents you from getting the best deals. 

These are all important steps to getting to accurate SaaS spending estimates.

Step 4: Forecast SaaS spending for 2026

Accurate SaaS forecasting moves beyond simply taking last year’s number and adding 10%. It requires aligning software needs with the company’s operational roadmap and leveraging granular usage data.

Of course, there are different ways to build your forward-looking projections and now that many SaaS apps have hybrid or usage-based pricing, forecasts need to consider both fixed and variable components.

Estimate future fixed costs per SaaS app

For applications with predictable per-seat or tiered pricing, such as HR software or CRM, effective budgeting requires a structured approach tied to key business drivers. 

Start with what’s called a growth driver analysis, which links software needs to a primary metric like headcount. For instance, if the Engineering team is projected to grow by 25% next year, budgets for tools like GitHub and Jira should also increase by 25% of the current cost per user to accommodate this growth. 

Then your next step is to account for inflation or increased pricing. It’s a good idea to assume a 5-10% price increase for major contract renewals, as what SaaS vendor doesn’t raise prices annually?

Finally, you need your forecasts to account for some uncertainty, as things never turn out as planned. In this sensitivity analysis, you have three forecasts. First, you have a “conservative” one that assumes minimal headcount growth and prioritizing optimization or cost cuts. Second, there’s a most-likely scenario that assumes approved headcount and sales pipeline projections for a balanced outlook. Finally, there’s an aggressive or best-case scenario that budgets for full funding of all requested tools and high-growth possibilities. 

By planning for various scenarios, you can make sure you have both flexibility and business goal alignment while limiting financial risks.

Next, project variable costs for each app

For applications that charge based on consumption, such as Snowflake, Twilio, or some Zendesk apps, variable-cost forecasting is more complex and requires a multifaceted approach. 

Begin by establishing a baseline consumption rate. This is best done by analyzing the last 6-12 months of usage for the core metric, like terabytes processed or API calls, to define a reliable starting point. Next, you’ll need to consider how business changes will impact that usage metric charged by a SaaS vendor. 

To make sure you don’t end up being completely wrong, add a safety buffer of 10-20% to the usage projection. This buffer will help you if you encounter any unexpected spikes or highly successful growth quarters and prevent mid-year budget crises from overage fees. 

Include an innovation budget

Finally, allocate a small, dedicated budget for testing new, potentially transformative AI or niche tools. This way, your IT team can build in strategic innovation without disrupting core forecasts.

Step 5: Strategically allocate your 2026 budget 

Strategic allocation ensures every software dollar directly contributes to an organizational goal, eliminating paid-for but unused software, or tools that don’t meet value expectations. By linking SaaS spend directly to business Objectives and Key Results (OKRs), if a tool does not drive the measurable result your organization requires, it’s not a priority for SaaS budgeting in 2026.

Use Zero-Based Budgeting (ZBB)

Rather than simply assuming renewal, you must prove its value as some organizations use a ZBB approach for a full reset. For every single SaaS app, you re-justify it from zero based on its projected ROI or strategic necessity. It forces businesses to answer: “If you had to pay for this tool out of your own profit center, would you still buy it, and at what tier?” 

ZBB also requires organizations to separate spending into one of three categories. First, there’s core infrastructure, which is needed and while you can’t cut, you can optimize what you pay. Examples are network and security infrastructure. Second, there are tools that directly affect revenue, like sales and marketing applications. Third, there are overhead tools like HR and finance.

Implement cost allocation

This is the most strategic element: pushing financial ownership down to the department level. There are different levels, including chargeback where IT directly bills each business function for the software they use. In a showback model, IT informs business functions of their software costs, but doesn’t take it from their budgets. Lastly, there is app-owner assignment, where a SaaS user becomes responsible for costs.

By combining a detailed, growth driver-based 2026 SaaS spending forecast with a strategic Zero-based cost allocation model, you transform SaaS budgeting from a compliance task into a powerful lever for controlling costs and fueling strategic growth.

Step 6: Ensure governance and accountability in 2026 and beyond

Smart SaaS budgeting is not a one-time activity. Rather, it’s a culture of good SaaS procurement governance and accountability that should extend far beyond 2026. Here are some ideas to maintain good SaaS budgeting discipline:

• Implement a centralized software request process to ensure visibility across departments.
• Establish a clear SaaS procurement and sign-off process, involving all stakeholders including IT/Security, Finance, and business function leadership
• Automate offboarding processes to ensure no license lies dormant
• Use internal surveys to gather user feedback on software usage and potential redundancies.
• Automate license usage tracking and reclamation if it remains inactive too long
• Develop a catalog or app store of sanctioned SaaS apps to prevent creeping shadow IT
• Make SaaS spend a regular topic for budget review, not just an annual headache, as it will help institutionalize smart SaaS budgeting

How BetterCloud helps you create smart SaaS budgets for 2026

With all-in-one SaaS management platform BetterCloud, there are several ways to save on SaaS and improve your SaaS spend strategy. Recognized as a Leader in the 2025 Gartner® Magic Quadrant™ for SaaS Management Platforms (SMP), only BetterCloud spans the entire spectrum of SaaS management needs from SaaS spend management, data protection, and user automation – helping you to manage every user, app, file, license, contract, vendor, and dollar.

In BetterCloud Spend Optimization, you can integrate different financial and accounting platforms to identify your organizational spending. It provides full visibility into your tech stack, allowing you to discover the tools used across departments and how much you’re spending on each. BetterCloud alerts IT to unusual spending patterns and automates license reclamation based on the usage threshold you set—both help reduce the overall budget.

Once you’ve identified your software spending through BetterCloud’s financial and accounts integrations, you can allocate a SaaS budget to different departments. Allocations can be manual or automatic, depending on the headcount of users. BetterCloud will monitor which departments are consuming the most of your SaaS budget against their planned allocation based on the products you’ve mapped to each department. 

BetterCloud also simplifies budget ownership by identifying the app owners. This empowers departments to enhance communication and make the right calls as needed.

But that’s not all. 

BetterCloud also reduces common SaaS security risks, automates data loss prevention, gives file sharing security insights, and improves file sharing governance, so your organization can protect what matters, and avoid hefty fines or sensitive or proprietary data exposure. Finally, BetterCloud also automates key IT processes like user lifecycle management to ensure maximum IT operational efficiency.

So by now, you’re likely ready to take what you’ve learned and start making better business decisions. Your best decision yet is partnering with BetterCloud for all your SaaS management needs across both the app and user lifecycles.

FAQs

Q: What is the SaaS usage-based pricing trend?

A: Usage-based pricing bills customers based on consumption. This kind of pricing is calculated using invoicing metrics are API calls, storage capacity used, number of transactions, or even computing power. It’s a growing trend because of the growth of AI features and native-AI apps.

Q: What is the hybrid SaaS pricing trend?

A: Hybrid pricing generally combines a fixed subscription base for platform access and essential features, as well as variable usage components like metered charges for overages, premium features, or AI processing. It’s a growing trend for AI features that are subscription add-ons.

Q: Why are most AI features priced based on usage?

A: Unlike traditional SaaS apps which have enormous economies of scale, AI is the opposite. These AI features and apps have incremental, high processing requirements and no economies of scale, making usage-based pricing the most suitable business model.

Q: How can enterprises track app usage to limit unpleasant billing surprises?

A: Using SaaS spend management software or SaaS management platforms is the most flexible and best way to track end-user SaaS usage, as well as spend tracking.

Q: Do all SaaS management platforms find AI apps and track their usage?

A: If your SMP can find non-AI apps, it can find native-AI or AI features, as well.

Q: Why is discovery of all Shadow IT so important in smart SaaS budgeting?

A: If you don’t completely understand your current SaaS workplace – all apps, vendors, contracts, and spending—it’s impossible to accurately forecast and strategically allocate SaaS spending.

Q: Can I build my single source of truth or SaaS inventory without using a SaaS spend management tool or SaaS management platform?

A: Yes, it’s possible to do it manually using finance, accounting, expense, and SSO apps, but it captures a single point-in-time (when you look). It’ll be accurate then, but by its very nature Shadow IT requires constant monitoring. That’s why even Gartner says many organizations rely on a SaaS management platform.

Q: What SaaS management platforms are best?

A: There are several alternatives, but BetterCloud is one of the very few that offers a unified SMP that helps organizations automate, discover, secure, and manage the SaaS workplace.

Ready to see how all-in-one SaaS management platform BetterCloud can help manage your SaaS contracts, vendors, and smart SaaS budgets? Join our next live demo or speak with our sales team now.

EDITOR’S NOTE: THIS IS AN UPDATE FROM A MARCH 2025 POST