Quick question: How many software subscriptions does your business pay for right now?

If you answered with confidence, you’re in the minority. If you said “I think around 10 or 15?” you’re probably closer to reality—but still low. The average small business now pays for over 15 different software subscriptions, and here’s the uncomfortable truth: you’re likely wasting 30% of that budget on seats nobody’s using.

Welcome to the era of subscription creep, where $12.99 here and $49/month there quietly compounds into a line item that would make your 2015 self faint.

Death by a Thousand Monthly Charges

Remember when software came in a box? You bought it once, installed it, and used it until the CD physically disintegrated. Those days are gone, replaced by the SaaS (Software as a Service) model that promised flexibility and always-updated tools. And it delivered! But it also delivered something else: a slow, steady drain on your operating budget that’s accelerating faster than inflation.

Here’s what the numbers look like in 2026: SaaS costs per employee hit $9,100 annually—up from $7,900 just two years ago. Total SaaS spending increased 8% year-over-year even though companies aren’t adding more tools. 61% of organizations had to cut projects due to unplanned software cost increases. And AI-native application spending jumped 108% in a single year.

That last one is the kicker. Your tools aren’t getting more expensive because you’re buying more of them—they’re getting more expensive because vendors are embedding AI features and charging premium prices for them. Whether you asked for those features or not.

The Microsoft 365 Wake-Up Call

Speaking of paying for features you may not have requested: if you use Microsoft 365 (and let’s be honest, most of us do), mark July 1, 2026 on your calendar.

Microsoft just announced price increases across most commercial plans. Business Basic goes from $6/month to $7/month (+$12/year per user). Business Standard jumps from $12.50/month to $14.50/month (+$24/year per user). Microsoft 365 E3 increases from $36/month to $39/month (+$36/year per user). And Microsoft 365 F1 sees the biggest percentage hit—from $2.25/month to $3/month, a 33% increase.

Microsoft’s justification? They’ve added over 1,100 features in the past year, including Copilot AI capabilities, enhanced security tools, and management features. Whether you use those features is… well, your problem now.

For a 20-person business on Business Standard, that’s an extra $480 annually. Not devastating, but multiply that across all your subscriptions doing the same thing, and suddenly you’re looking at real money.

The Hidden Costs Nobody Talks About

The subscription fees themselves are just the tip of the iceberg. Here’s what’s really eating your budget:

Shelfware is software you’re paying for but barely using. That project management tool someone insisted on two years ago? Still auto-renewing. That second video conferencing platform from when you couldn’t decide between Zoom and Teams? Still billing.

Shadow IT means tools your employees signed up for without approval. One person’s “free trial” they forgot to cancel becomes a company expense when they use their work email. Finance finds out three months later.

The Duplicate Problem happens when multiple teams buy similar tools that do essentially the same thing. Marketing has their project tracker, operations has theirs, and neither talks to the other. You’re paying double (or triple) for the same capability.

The Integration Tax hits every tool that doesn’t talk to another tool. Someone’s manually entering data from one system to another because the “integration” costs extra or doesn’t exist.

The Training Treadmill kicks in because more tools mean more training. More training means more time spent learning instead of doing. And when that employee leaves? Start over.

The AI Premium Problem

Here’s the trend that should concern every business owner: AI is becoming the justification for price increases across the board. Vendors are layering AI tiers into existing products, shifting to consumption-based pricing, and charging premiums that inflate your spend without adding new tools. Even well-governed software portfolios are absorbing these increases.

The 2026 Zylo SaaS Management Index found that spending on AI-native applications surged 108% in one year. And here’s the thing—much of that spending is being absorbed into tools you already pay for, just at higher prices. Microsoft calls them “enhancements.” Adobe calls them “innovations.” Your accountant calls them “why did our software line item increase 15%?”

Your Subscription Audit Homework

Before your next budget cycle, here’s what to do:

This Week:

  • Pull your credit card and bank statements for the last 90 days
  • Search for recurring charges—every single one
  • Build a simple spreadsheet: Tool name, monthly cost, who uses it, and what it’s for
  • You’ll find at least one subscription you forgot existed. Guaranteed.

This Month:

  • Identify “shelfware”—if fewer than 40% of paid seats are active, investigate immediately
  • Look for duplicates: Do you really need two file-sharing platforms?
  • Check renewal dates. Auto-renewals should never surprise you.

Before July 2026:

  • If you’re on Microsoft 365, talk to your IT provider about early renewal options to lock in current pricing
  • Negotiate. Multi-year contracts can save up to 40%—vendors would rather keep you than lose you
  • Evaluate who actually needs premium features versus who could use a lower-tier plan

The Big Picture Questions: Does every tool have an owner who’s accountable for its value? When did you last retire a subscription? Can you actually quantify what each tool saves you in time or money?

It’s Not Just Software

While we’re on the subject of creeping tech costs: it’s not just your subscriptions getting more expensive. If you’ve priced a new laptop, server, or even just a RAM upgrade lately, you’ve probably noticed hardware costs climbing too.

AI is hungry—and it’s eating the supply chain. The massive data centers powering ChatGPT, Copilot, and every other AI tool require specialized memory that’s cannibalizing production of the regular DRAM that goes into your office computers. DRAM prices surged over 170% in 2025, with another 50%+ increase expected in early 2026. Tariffs and supply chain constraints are piling on top.

The bottom line? Your technology budget is getting squeezed from both directions—recurring software costs AND one-time hardware purchases. Planning for one without accounting for the other leaves you exposed. (For a deeper dive on hardware costs and what it means for your equipment refresh plans, check out our recent article: The Great Hardware Squeeze.)

The Bottom Line

Subscription software isn’t the enemy—it’s genuinely more flexible and capable than the shrink-wrapped boxes of yesteryear. But that flexibility comes with a hidden cost: the burden of management shifts entirely to you.

Nobody’s going to tell you that you’re overpaying. The auto-renewal model is designed to keep billing until you actively stop it. And with AI becoming the excuse for across-the-board price increases, passive management isn’t just expensive—it’s getting more expensive every quarter.

The good news? A few hours of honest auditing can often recover thousands in annual spend. The better news? You don’t have to figure it out alone.

Staring at your software expenses and wondering where to start? We help clients audit their technology costs, identify waste, and build budgets that account for the subscription realities of modern business. Sometimes the best ROI isn’t a new tool—it’s finally canceling the old ones nobody uses. Questions about how rising software costs should factor into your 2026 planning? Let’s talk.