SaaS Pricing Rose 11.4% Last Year. Inflation Was 2.7%.
72% of SaaS revenue growth came from price hikes. The average person pays $273/month across 12 subscriptions. Here's where the money goes.
In 2025, SaaS pricing increased 11.4% on average. The US inflation rate was 2.7%.
That’s a 4x gap.
This wasn’t a one-time adjustment. It’s a pattern that has been compounding for years. And the data behind it tells a story about how the software industry makes money now.
The Numbers
Here’s what I found when I dug into vendor earnings reports, pricing trackers, and industry analyses.
$273/month. That’s the average person’s subscription spend across 12 tools. $3,276 per year on software that mostly moves text from one place to another.
87 applications. The average organization uses 87 different software tools. With 7.6 duplicate subscriptions — tools that overlap in functionality.
25-30% waste. Companies waste 25-30% of their SaaS spend on unused or underutilized tools. That’s $1,700-4,300 per year for a small team.
72%. The percentage of SaaS vendor revenue growth in 2025 that came from price increases on existing customers. Not new customers. Not better features. Price increases.
That last number is the one worth understanding.
What 72% Means
SaaS companies grow revenue two ways:
- Sell to new customers
- Charge existing customers more
In a healthy market, most growth comes from #1. You build something better, more people buy it.
In 2025, the split was roughly 28% new customers, 72% price increases. This ratio has been shifting toward price increases for three consecutive years.
This means the majority of your growing SaaS bill is not because you’re getting more value. It’s because the price went up.
Some specific examples from 2025:
Salesforce raised prices 6%. At up to $500/seat/month, a 6% increase on a 100-person team is $36,000/year in additional cost. Pricing contributed 25% of their total revenue growth from 2022-2025. Their Trustpilot rating: 1.5 out of 5.
Slack went from $12.50 to $15/user/month. A 20% increase. Then added an AI add-on at $4-10/user extra. For a 50-person company, the Slack bill went from $7,500/year to $9,000/year — and up to $15,000/year with AI features.
Canva raised Teams pricing by 300%. Users described it as “shocking and epic.” The Trustpilot score dropped to 2.3 out of 5 with 2,645 reviews, mostly negative.
Loom, after being acquired by Atlassian, changed its seat billing. Some teams saw bills go from $240/year to $24,000/year. That’s a 100x increase.
HubSpot added auto-upgrades to the next credit pack mid-contract and paywalled previously-free features. Users reported being pushed from free to paid without clear consent.
Adobe was sued by the FTC for hidden early termination fees. They charge $55-90/month for Creative Cloud and penalize you for canceling before your annual term ends. Their Trustpilot: 1.2 out of 5.
These aren’t outlier companies with unusually aggressive pricing. These are the industry leaders. This is what normal looks like.
The Infrastructure Paradox
Here’s what makes the 11.4% increase hard to justify:
Cloud infrastructure costs have been falling for a decade.
AWS, GCP, and Azure have reduced compute and storage costs consistently. S3 storage costs $0.023/GB/month. Lambda compute costs fractions of a cent per invocation. SES sends emails for $0.0001 each.
The tools that charge $10-200/month per user are running on infrastructure that costs $0.50-5.00/month per user. And that infrastructure cost keeps getting cheaper.
A tool that cost $2/month per user to serve in 2018 might cost $1/month in 2026. But the subscription price went from $15/month to $24/month in the same period.
The gap between infrastructure cost and subscription price is not shrinking. It’s widening. In both directions.
This is the fundamental inversion. The business model used to charge a premium over real costs. Now the business model is the premium. The infrastructure cost is a rounding error.
The Subscription Trap
The 11.4% increase is sustainable (for vendors) because of how subscriptions work.
Switching costs are real. Your data is in Salesforce. Your team knows Figma. Your automations run on Zapier. Migrating to an alternative takes weeks of work and carries risk. Most people absorb a 6-10% price increase rather than switch.
Annual contracts lock you in. Many SaaS tools offer a “discount” for annual billing, then auto-renew at the new (higher) price. You find out about the increase when the charge hits your card.
The free-to-paid cliff. Free tiers are designed to create dependency, not to serve users. SurveyMonkey lets you collect unlimited responses on the free plan but only shows you 25 of them. The data exists. They’ve stored it. They just won’t show it to you until you pay $25-92/month.
Seat-based multiplication. A 6% price increase on a tool with 50 seats means 50x the impact. Most seats aren’t heavily used. But the pricing model doesn’t care about usage — it charges per seat.
Feature gating creates artificial upgrades. Need one feature that’s on the next tier? You upgrade the entire plan. The marginal cost of that feature to the vendor is zero. The cost to you is $10-100/month more.
The result: once a user is past the free tier and on an annual contract, the vendor can raise prices 5-15% per year with minimal churn. The switching costs are higher than the price increase.
The 41% Fatigue
41% of consumers report subscription fatigue.
This is not a vague sentiment. It’s measurable behavior:
- Cancellation attempts are up. Search volume for “how to cancel [SaaS product]” has grown year-over-year across nearly every major tool.
- Subscription audit tools are growing. Products that help you identify and cancel unused subscriptions (Ramp, Cleanshelf) have seen double-digit growth.
- Consolidation is happening. Companies are actively reducing tool count. The average organization’s app count peaked and is starting to contract.
- AI is accelerating the shift. $4,127/month in realistic SaaS costs being replaced by AI agents at $20-30/month. General-purpose AI ($20/month for ChatGPT or Claude) is replacing $150+/month in point tools for the average knowledge worker.
The fatigue comes from the combination of rising prices and declining perceived value. When every tool raises prices 11.4% and the new features are mostly AI add-ons that cost the vendor pennies to deliver, users notice.
Where the Money Goes
If infrastructure costs $0.50-5.00 per user per month and the subscription is $20-200/month, where does the rest go?
SaaS companies typically run 70-85% gross margins. The best-in-class run 85-95%. Here’s a rough breakdown for a typical SaaS tool at $50/user/month:
| Category | Percentage | $/User/Month |
|---|---|---|
| Infrastructure (servers, storage, bandwidth) | 5-15% | $2.50-7.50 |
| Engineering (development, maintenance) | 15-25% | $7.50-12.50 |
| Sales & Marketing | 20-40% | $10-20 |
| General & Administrative | 10-20% | $5-10 |
| Profit / Reinvestment | 10-30% | $5-15 |
Sales and marketing is usually the largest cost center. More money goes to acquiring and retaining customers than to building or running the product.
This means a significant portion of your subscription is funding the vendor’s customer acquisition engine. You’re paying for their next billboard, their SDR team, their conference booth.
This is standard business. But it explains the gap. Infrastructure might cost $3/month. You’re paying $50/month. The extra $47 goes to business operations, not to serving you.
The Usage-Based Shift
The market is already moving.
45% of SaaS companies have adopted usage-based pricing. This is up from 27% three years ago.
61% are testing or planning to adopt it. Nearly two-thirds of the industry acknowledges that per-seat monthly subscriptions are not the optimal model.
78% of UBP adoption happened in the last 5 years. Nearly 50% in the last 2 years. This is accelerating.
Companies like Twilio, Snowflake, and Datadog have proven that usage-based pricing works at scale. These are $10B+ companies built on “pay for what you use.”
But most consumer and SMB-facing SaaS hasn’t switched. The reason is simple: usage-based pricing would reduce revenue from existing customers. A company making $135/month from Mailchimp users who send 10,000 emails would make $10-30 under usage-based pricing. That’s a 75-90% revenue cut per user.
No public company volunteers for a 75% revenue cut, even if the pricing is more honest. So the shift happens through disruption, not evolution.
What Happens Next
Three forces are converging:
1. AI is collapsing the value of point tools.
AI writing wrappers (Jasper at $49/month) are being replaced by ChatGPT at $20/month. Basic design work is moving to AI generation. Customer support is shifting to AI agents at $0.99/resolution instead of $85/agent/month. Meeting summaries are built into the AI tools people already pay for.
Gartner predicts 35% of point-product SaaS will be replaced by AI agents by 2030. A trillion dollars in software market cap was wiped out in early 2026 when AI agent capabilities accelerated.
2. Usage-based pricing is becoming expected.
The 45% adoption rate and 61% testing rate mean this is no longer a niche model. Users are increasingly aware that they’re paying monthly for tools they use sporadically. Subscription fatigue (41%) is the demand signal.
3. Infrastructure costs keep falling.
Every year, the gap between what tools cost to run and what they charge gets wider. A tool that charges $40/month on infrastructure that costs $0.20/month has a lot of room for a competitor to undercut them.
The SaaS companies that raised prices 11.4% in 2025 are betting that switching costs and inertia will protect them. For most of their existing customers, they’re right. It takes a lot of pain to overcome the friction of migration.
But for new customers — the freelancer choosing their first e-signature tool, the startup picking an email platform, the content creator selecting a scheduling tool — the calculation is different. They have no switching costs. They have no legacy data. They can start with the option that charges $0.02 instead of $10.
That’s where the disruption starts. Not by converting DocuSign’s existing customers. By making sure the next million users who need e-signatures never sign up for DocuSign in the first place.
SaaS pricing rose 11.4% last year. Inflation was 2.7%. 72% of revenue growth came from price hikes.
The numbers speak for themselves. The question is how long the gap lasts before someone closes it.