How much does the average business waste on SaaS?

Industry research consistently finds businesses waste a large share of SaaS spend. The most recent benchmark: the average organization uses only 54% of the SaaS licenses it pays for (Zylo, 2026), with the rest lost to unused seats, duplicate tools, and over-tiered plans. A focused SaaS audit typically recovers 15–25% of software spend, with more available where tool sprawl is high across teams or locations.

Ranges reflect industry benchmarks; actual results vary and savings are not guaranteed.

What share of SaaS spend is wasted?

The cleanest way to measure SaaS waste is the license utilization rate: active users divided by paid seats. On that measure the numbers are stark. Zylo’s 2026 SaaS Management Index, built from anonymized customer spend data, finds the average organization uses just 54% of its SaaS licenses, roughly 46% of seats idle in a given month, and wastes an average of $19.8 million a year on unused licenses alone (Zylo, 2026). Those headline dollars skew toward large enterprises, but the ratio is what matters: whether you spend $200,000 or $20 million on software, close to half of it is likely paying for seats nobody is using.

And the pool keeps growing. Gartner forecast worldwide SaaS spending to approach $300 billion in 2025, up from just over $250 billion in 2024 (Gartner forecast, via CIO Dive). More spend added faster than anyone reviews it means the waste compounds year over year.

You will also see “around 30% of SaaS spend wasted” cited across the industry. Different studies measure different things, share of licenses unused, share of dollars wasted, share of apps abandoned, but every serious benchmark lands in the same territory: somewhere between a quarter and a half of SaaS spend is not producing value.

How does SaaS waste vary by company size?

App counts, and the waste that rides along with them, scale with headcount. Zylo’s 2025 index put average SaaS spend at $4,830 per employee per year, with small organizations running about 152 applications and large enterprises about 660 (Zylo, 2025). The average apps per company figure surprises most owners: almost nobody guesses within half of their real number before an inventory.

Smaller businesses run fewer apps but usually have less oversight: no software asset management team, no procurement function, nobody whose job is to ask whether last year’s tools are still earning their renewal. The waste percentage can therefore be just as high at 80 employees as at 8,000, only the dollar figure changes.

What are the three biggest sources of SaaS waste?

Nearly every dollar of SaaS waste traces back to one of three mechanics, and each has a distinct fix.

• Unused licenses: seats assigned to people who left, changed roles, or never onboarded. This is the single largest bucket in every benchmark, and the easiest to prove: most admin consoles show last-login dates, so a 30-minute export tells you exactly which seats have been dark for 60+ days. Reclaim them, then buy fewer at renewal.
• Duplicate and overlapping tools: the classic symptom of SaaS sprawl: two project-management tools, three e-signature products, four ways to share files, each adopted by a different team or location. Every duplicate carries its own subscription, admin overhead, and security surface. Consolidating to the strongest tool per category cuts cost without cutting capability.
• Over-tiering: paying for a premium or enterprise plan when your actual usage fits the tier below. Plans get upgraded for a single feature or a temporary peak and never revisited. Compare the features you demonstrably use against each tier’s checklist before every renewal.

Behind all three sits shadow IT: software bought outside any central process. Zylo’s 2025 index found lines of business now account for 70% of SaaS spend while IT controls just 26.1% (Zylo, 2025). Tools purchased on corporate cards and expense reports never reach an inventory, never get usage-reviewed, and auto-renew indefinitely. You cannot manage spend you cannot see, which is why measurement starts with discovery.

How do you measure your own SaaS waste?

You can get a defensible waste number in a week with five steps:

1. Build a complete inventory. Pull every recurring software charge from accounting and AP, corporate-card and expense data, and your SSO or identity provider’s app list. The union of those three sources catches most shadow IT.
2. Compute license utilization per app. Active users ÷ paid seats, using each admin console’s last-login report. Anything under 100% is a conversation; anything under 70% is a savings line.
3. Map overlap by category. Group every app by the job it does: communication, storage, design, e-signature, analytics. Two or more apps in one box is duplicate spend.
4. Flag tier mismatches. For your ten largest contracts, list the paid-tier features you actually use. Unused feature tiers are silent waste.
5. Total it up. Unused seats × per-seat price, plus the smaller of each duplicate pair, plus the tier delta. That sum is your annual waste number.

Larger organizations often automate steps one and two with a SaaS management platform: Zylo, Productiv, and Flexera One are established examples of the category, which continuously discovers apps and tracks utilization. For most small and mid-sized businesses, an accounting export, SSO report, and a spreadsheet get you 90% of the answer, or an independent technology spend assessment can do the work for you.

How do you turn the findings into savings?

Finding waste and recovering it are different jobs. Reclaimed seats only save money when the license count drops at renewal, so time the cuts to your contract dates. Consolidate duplicates onto the strongest tool, downgrade over-tiered plans, then put utilization on a quarterly review cadence so the waste does not regrow. That ongoing discipline is the core of SaaS spend optimization, and it is one part of the broader work of cutting SaaS, telecom & vendor costs.

Finally, stop the waste from regrowing. Three light-weight controls do most of the work: route new software requests through a single approval step so duplicates are caught before purchase, not after; assign every app an internal owner who answers for its utilization at renewal; and keep a renewal calendar so no subscription auto-renews unexamined. None of this requires new headcount. It requires that someone, internal or an independent advisor, owns the question “is this still earning its renewal?” for every line item. Companies that add that single accountability loop are the ones whose waste number stays down after the first cleanup instead of drifting back within eighteen months.

Want your specific number? Run the savings calculator or book a free assessment.

By Shane Stewart, Founder of Stackstone Advisory, independent technology spend advisor.
Last updated: July 2026.