This is part 4 in my ongoing series that all started with my Six Tech Trends Shaping 2026 post.
Part 1: Agentic AI Takes the Wheel in 2026
Part 2: AI Governance Will Stop Being Optional
Part 3: Hybrid Work Gets Its Second Act
Look, we need to talk about that spreadsheet. You know the one, the Excel file tucked away in SharePoint (or worse, still living on someone’s desktop) where you’re trying to track all your organisation’s SaaS subscriptions. The one that makes you question your life choices every time you open it.
If that spreadsheet is currently tracking somewhere between 100-400 different software tools, congratulations you’re completely normal. Also completely drowning in unnecessary complexity and haemorrhaging money, but hey, at least you’re not alone.
Welcome to 2026, where the party’s finally over and the cleanup begins.
What We’re Actually Talking About Here
SaaS sprawl isn’t just “having too many apps.” It’s the organisational equivalent of death by a thousand subscriptions, each one seemingly justified, most barely used, and collectively creating a management nightmare that would make even the most zen IT director contemplate early retirement.
Here’s what typically happens: Marketing gets Salesforce. Sales adds HubSpot because they “prefer the interface.” Customer Success deploys Zendesk. Meanwhile, someone in Operations discovered Monday.com, Finance is paying for both QuickBooks and Xero (don’t ask), and the development team has somehow accumulated fourteen different project management tools.
The average enterprise today manages 106 different SaaS applications,[1] down slightly from 112 in 2023 but before you celebrate that consolidation, the pace has slowed to just 5% year-over-year,[2] suggesting organizations are hitting diminishing returns on the easy wins.
And here’s the kicker: the average company only uses 49% of its purchased SaaS licenses.[3] That’s not a typo. Organizations are literally paying for twice as much software as they actually need.
The Reality Check: What This Is Actually Costing You
Let’s talk numbers, because “too many apps” sounds like an inconvenience until you see what it’s doing to your budget.
Gartner research shows that organizations without centralized SaaS management overspend by at least 25% due to unused entitlements and unnecessary overlapping tools.[4] For a mid-sized enterprise spending $5 million annually on SaaS, that’s $1.25 million evaporating into unused licenses and redundant capabilities.
But the financial waste is just the beginning. Consider the hidden costs:
Security exposure that keeps CISOs up at night: Organizations without proper SaaS lifecycle management are five times more susceptible to cyber incidents or data loss.[5] Every unmanaged application is a potential entry point, especially when employees leave and their access isn’t properly terminated across the entire portfolio.
Integration chaos: Different teams using different tools means constant manual data transfers, broken workflows, and the kind of inefficiency that makes grown professionals weep quietly at their desks. One European manufacturer reduced active suppliers by 13% and identified 15% savings opportunities just by getting visibility into their actual software usage.[6]
Decision-making paralysis: When you have seventeen different “sources of truth” scattered across multiple platforms, good luck getting accurate reporting or making confident strategic decisions.
The Australian market provides an interesting case study. With IT spending projected to hit A$172.4 billion in 2026—and software becoming the largest category at nearly A$60 billion[7]—organisations Down Under are discovering that procurement strategy matters more than procurement volume.
Why This Got So Out of Hand
The SaaS explosion wasn’t an accident—it was the perfectly predictable result of several converging forces that sounded great individually but created chaos collectively.
The democratisation of IT procurement changed everything. Gone are the days when IT controlled all software purchases. Today, 75% of employees are expected to acquire, modify, or create technology without IT oversight by 2027 up from 41% in 2022.[8] Marketing can spin up a new analytics platform. HR can deploy a recruitment tool. Finance can trial expense management software. All without bothering IT with tedious details like “security reviews” or “integration requirements.”
This shift happened for good reasons. Business units understood their needs better than IT could. Cloud-based tools were cheap and easy to deploy. The subscription model meant no massive upfront capital expenditure or lengthy approval processes. Why wait six months for IT to evaluate solutions when you could have something running by next Tuesday?
The pandemic accelerated everything to ludicrous speed. Companies that might have spent years carefully planning their digital transformation found themselves desperately deploying anything that kept people productive while working remotely. Collaboration apps on enterprise devices increased 176% in a single month during 2020.[9] When survival is the priority, portfolio management gets… deprioritised.
The rise of freemium and trials created another interesting dynamic. Why not try six different project management tools when they’re all offering free tiers or 30-day trials? The problem is that “trying” often morphs into “using,” which becomes “depends upon,” and suddenly you’re paying for all six because different teams have built their workflows around different platforms.
Regional variations tell interesting stories. In APAC where the SaaS market is growing at 16-19.2% annually[10] companies are rushing to digitise, sometimes skipping the “planning” phase entirely. European organizations, meanwhile, are adding GDPR compliance as another layer of complexity to their consolidation efforts, though European companies still increased SaaS spending by 57% between 2020 and 2021.[11]
And let’s be honest about the vendor landscape. When every software company discovered they could slap “AI-powered” on their product description and double their pricing, suddenly that perfectly functional tool you’ve used for years needs to be “upgraded” to the AI version. Whether you need AI capabilities or not becomes irrelevant when vendors start deprecating the features you actually use.
What Successful Consolidation Actually Looks Like
Here’s what doesn’t work: declaring “We’re cutting apps!” and handing down mandates from the executive team without understanding how work actually gets done. That approach typically results in either rebellion (shadow IT goes deeper underground) or compliance theatre (officially consolidating while unofficially maintaining the old tools).
Real consolidation starts with visibility, and I mean genuine visibility not the version where IT thinks they control 30% of SaaS spending when they actually control 26%.[12]
Phase 1: Actually Know What You Have
Organizations serious about this are deploying SaaS Management Platforms (SMPs) that automatically discover applications through multiple methods: integration with SSO, CASB traffic logs, API connections, browser extensions, and expense system parsing.[13] The goal is finding shadow IT before it becomes a security incident.
One useful framework from Forrester suggests starting with business drivers that define the need for change, then defining application portfolio characteristics that enable those changes, followed by phased program activities.[14] It’s less sexy than wielding the consolidation axe, but significantly more effective.
Phase 2: Understand What You Actually Need
This is where application rationalisation moves from inventory management to strategic portfolio optimization. The questions shift from “What do we have?” to:
- Which applications align with our current operating model and strategic objectives?
- Where do we have genuine functional gaps versus perceived gaps?
- What’s the total cost of ownership, including integration maintenance and training?
- Which tools are genuinely best-of-breed versus “good enough but we’re used to it”?
Through 2027, over 50% of organizations are expected to centralize SaaS management using an SMP,[15] suggesting this shift from reactive purchasing to proactive portfolio management is becoming table stakes rather than leading edge.
Phase 3: Make the Hard Calls
Here’s where strategy meets reality. McKinsey’s research on B2B SaaS shows that companies in the top quartile of Net Revenue Retention achieve 113% meaning they grow 13% without adding new customers partly through better consolidation that reduces churn and increases expansion revenue.[16]
The consolidation decision tree typically follows this pattern:
Platform consolidation: Can we get 80% of the functionality from an existing platform we already pay for? If Microsoft 365 or Google Workspace can handle the use case adequately, the incremental cost is zero and integration is already solved.
Best-of-breed assessment: Is this tool demonstrably superior enough to justify the additional complexity? “Superior” needs to translate into measurable business outcomes, not just features that sound nice in demos.
Vendor partnership: For tools that survive the cut, are we truly partnering with vendors or just collecting subscriptions? Organizations with strong vendor relationships often negotiate better terms, get early access to new capabilities, and receive genuine support rather than ticket responses.
The German market—expected to grow from €6.85 billion to €16.3 billion by 2025[17]—demonstrates how regulatory environment shapes these decisions. European organizations are prioritizing vendors with proper data residency, GDPR compliance built-in, and transparent security practices, even if it means paying premium pricing.
The AI Complication (Because Of Course There Is One)
Just as organizations start getting serious about SaaS consolidation, AI shows up to thoroughly complicate matters. Gartner estimates that by 2026, 80% of enterprises will have deployed GenAI-enabled applications,[18] and many of those will be net-new SaaS tools rather than capabilities added to existing platforms.
This creates a fascinating tension. Organizations are trying to reduce their SaaS portfolio while simultaneously adopting AI-powered tools that promise transformational capabilities. The result? Even companies actively consolidating are seeing new AI tools enter their environments at approximately six new applications per month.[19]
Some vendors are responding by embedding AI capabilities into existing platforms, Microsoft’s Copilot integration across M365 being the obvious example. Others are launching standalone AI services that promise capabilities existing tools can’t match. And IT teams are stuck trying to determine which approach delivers actual value versus which is just AI-washing their existing features.
The Chinese market projected to reach $37.98 billion by 2029[20] is particularly aggressive about AI integration, with local hyperscalers competing on language-localised interfaces and AI features tailored to regional business practices.
The Pricing Pivot
AI is also forcing the entire industry to rethink pricing models. Usage-based pricing adoption jumped from 22% in 2023 to 38% in 2025,[21] driven largely by AI features with variable compute costs. This makes SaaS spend even harder to predict and manage.
Organizations that might have finally figured out how to budget for seat-based licensing now face consumption-based charges that can vary dramatically month-to-month. A majority of IT leaders report unexpected charges tied to consumption-based or AI-related pricing,[22] adding another layer of complexity to already challenging financial management.
The Microsoft 365 Opportunity (And Challenge)
Since we operate primarily in the Microsoft ecosystem at Insentra, it would be remiss not to address the elephant in the room: Microsoft 365’s role in consolidation strategies.
M365 represents both the biggest consolidation opportunity and the most common source of underutilisation. Organizations pay for E3 or E5 licenses that include Teams, SharePoint, OneDrive, Power Platform, Purview, and dozens of other capabilities then deploy separate tools that duplicate functionality because “nobody knew we already had that.”
The average organisation uses roughly 10 productivity and collaboration tools,[23] many of which overlap with capabilities already included in their M365 licensing. Before buying another project management tool, workflow automation platform, or collaboration space, the first question should be: “Can we do this with Power Platform, Lists, Planner, or Teams?”
But here’s the nuance: Microsoft’s platform approach isn’t always the right answer. Their tools excel at integration within the Microsoft ecosystem but sometimes lag specialised vendors on depth of functionality. The decision shouldn’t be “Microsoft or nothing” it should be “Microsoft unless there’s a compelling reason for something else.”
Australian organizations are navigating this particularly carefully. With software spending projected to grow 13.6% year-over-year,[24] IT leaders are scrutinising every dollar. The question shifts from “Does this tool exist in M365?” to “Will adopting the M365 version deliver sufficient value given our specific requirements and integration needs?”
Making It Stick: Governance That Doesn’t Suck
The biggest challenge isn’t the initial consolidation it’s preventing sprawl from creeping back in six months later.
Organizations achieving sustained consolidation implement a few key practices:
Software review boards that evaluate new requests against existing capabilities. Not to be the “Department of No,” but to ensure business units aren’t solving the same problems multiple times in different ways. Over half of respondents cite underused applications and budget pressure as primary drivers for consolidation,[25] suggesting the financial case usually resonates with stakeholders.
Automated renewal management replaces the calendar-and-spreadsheet approach that 40% of organizations still use.[26] SaaS renewal dates don’t care about your fiscal calendar, and missing a renewal deadline often means auto-renewal at unfavourable terms.
Regular optimisation cycles rather than one-and-done exercises. Leading organizations conduct quarterly or semi-annual reviews to maintain momentum and prevent re-sprawl. The consolidation rate has dropped from 14% to just 5% year-over-year,[27] suggesting many organizations completed the obvious consolidations and are now facing harder trade-offs requiring more sophisticated analysis.
Clear ownership and accountability for each application category. When nobody owns a tool, everyone uses it their own way, and nobody wants to pay when renewal time comes. Sixty-nine percent of organizations report cross-functional collaboration between IT, finance, and business units for SaaS purchasing,[28] but only 30% claim to have truly effective processes in place.
The Consolidation Calculus for 2026
Let’s get tactical about what this means for organizations heading into 2026.
If you’re a mid-market company (1,000-5,000 employees): You’re statistically running 100-150 SaaS apps. Industry data shows mid-sized firms achieved a 29% reduction in SaaS applications in 2025,[29] suggesting there’s still significant optimization runway. Focus first on duplicate functionality—the three expense management tools, five project trackers, and seven communication platforms. Low-hanging fruit alone can recover 15-20% of SaaS spend.
If you’re enterprise-scale (10,000+ employees): You’re probably managing 400+ applications,[30] and your challenge isn’t just quantity but governance at scale. Prioritise unifying around platforms with proper APIs and integration capabilities. Every tool that doesn’t play well with others creates expensive middleware requirements and brittle workflows.
If you’re growth-stage (scaling rapidly): Your instinct is to move fast and worry about optimisation later. That’s fine until it isn’t. The companies hitting efficient growth metrics early are the ones establishing proper SaaS governance before sprawl becomes endemic. Better to prevent the problem than cure it.
Regional considerations matter too. Indian organisations where the SaaS market is growing at 25-35% CAGR[31] need to balance rapid adoption with financial discipline. European companies must weigh consolidation benefits against data sovereignty requirements that sometimes force geographic redundancy. Australian enterprises are finding that local compliance requirements and data residency needs influence which consolidation strategies are actually viable.
Where Insentra Comes In
We help organizations navigate SaaS consolidation with a focus on the Microsoft 365 ecosystem and broader enterprise architecture. Whether you’re trying to understand what you actually have, determine what you genuinely need, or implement governance that your people will actually follow, we’ve done this enough times to spot the patterns.
Our Agentic AI Sprint Series specifically addresses the AI complication mentioned earlier. Rather than letting AI tools proliferate unchecked, we help you develop a coherent strategy for AI adoption that integrates with your existing architecture rather than fragmenting it further.
We work with you to:
- Conduct proper application portfolio assessments that go beyond inventory to strategic alignment
- Identify genuine consolidation opportunities versus false economies where “cheap” tools create expensive integration debt
- Implement sustainable governance frameworks that enable business agility without sacrificing control
- Navigate the Microsoft ecosystem effectively knowing when to leverage what you’re already paying for and when specialised tools genuinely add value
The Bottom Line
2026 is the year organizations stop pretending that 100+ SaaS applications represents “modern” and start recognising it as “expensive and risky.” The consolidation wave isn’t about returning to the old days of monolithic on-premises software it’s about being strategic rather than reactive with cloud adoption.
The math is compelling: 25% overspend for organizations without proper SaaS management,[32] five times higher risk of security incidents,[33] and billions in wasted spend on unused licenses. But beyond the numbers, there’s the simple reality that complexity itself has costs—in productivity, in decision-making, and in the daily friction of working with too many tools that don’t quite fit together.
The organizations winning in 2026 won’t be the ones with the most software. They’ll be the ones with the right software, properly integrated, actually used, and strategically aligned to business objectives.
That spreadsheet tracking all your SaaS subscriptions? It’s time to make it a lot shorter. Your CFO, your CISO, and your sanity will thank you.
If you are ready to move from SaaS sprawl to a portfolio that actually supports how your organization works, we can help. Contact Insentra about assessing your current SaaS landscape, identifying real consolidation opportunities, and putting governance in place that enables growth without losing control.
Dan Kregor | Insentra
Making enterprise tech transformations slightly less terrifying, one consolidation at a time.
Sources
[1] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[2] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[3] McKinsey Global Survey on AI; Zylo (2025). “111 Unmissable SaaS Statistics for 2025.” https://zylo.com/blog/saas-statistics/
[4] Gartner (2025). “Magic Quadrant for SaaS Management Platforms.” https://www.gartner.com/en/documents/5605991
[5] Gartner (2025). “Magic Quadrant for SaaS Management Platforms.” https://www.gartner.com/en/documents/5605991
[6] McKinsey & Company. “Spendscape – Spend Analytics Software.” https://www.mckinsey.com/capabilities/operations/tech-tools/spendscape-technology/spend-analytics-software
[7] Gartner (2025). “Australia IT Spending Forecast”; CRN Australia (2025). “Gartner: Data centers, software to lead IT growth in Australia in 2026.” https://www.crn.com.au/news/2025/partners/gartner-data-centres-software-to-lead-it-growth-in-australia-in-2026
[8] Gartner Research; BetterCloud (2025). “The big list of 2025 SaaS statistics.” https://www.bettercloud.com/monitor/saas-statistics/
[9] Impact My Biz; Spendesk (2024). “60+ eye-opening SaaS statistics.” https://www.spendesk.com/blog/saas-statistics/
[10] Mordor Intelligence (2025). “Software As A Service Market Size & Competitors”; Precedence Research (2026). “Software As A Service (SaaS) Market Size to Surpass USD 1,367.68 Bn by 2035.” https://www.mordorintelligence.com/industry-reports/software-as-a-service-market
[11] Paddle; Spendesk (2024). “60+ eye-opening SaaS statistics.” https://www.spendesk.com/blog/saas-statistics/
[12] BetterCloud (2025). “The big list of 2025 SaaS statistics.” https://www.bettercloud.com/monitor/saas-statistics/
[13] Gartner; Torii (2024). “Lessons from the Gartner® Market Guide for SaaS Management Platforms.” https://www.toriihq.com/blog/lessons-from-the-gartner-market-guide-for-saas-management-platforms
[14] Forrester Research. “Sustainably Executing Application Rationalization.” https://www.forrester.com/report/Sustainably-Executing-Application-Rationalization/RES99121
[15] Gartner (2025). “Magic Quadrant for SaaS Management Platforms.” https://www.gartner.com/en/documents/5605991
[16] McKinsey & Company (2025). “The net revenue retention advantage: Driving success in B2B tech.” https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-net-revenue-retention-advantage-driving-success-in-b2b-tech
[17] Statista (2021). “SaaS market size in Europe by country 2025.” https://www.statista.com/statistics/1219237/saas-versus-other-software-market-revenue-europe-bycountry/
[18] Gartner; BetterCloud (2025). “AI and the SaaS industry in 2026.” https://www.bettercloud.com/monitor/saas-industry/
[19] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[20] Zylo (2025). “111 Unmissable SaaS Statistics for 2025.” https://zylo.com/blog/saas-statistics/
[21] Spend Matters (2025). “The real SaaS trend in 2025 isn’t growth — It’s intelligence.” https://spendmatters.com/2025/04/24/saas-procurement-trends-2025-ai-intelligence/
[22] Editorial GE (2025). “ROI Benchmarking Shift: SaaS Consolidation 2026.” https://editorialge.com/roi-benchmarking-shift/
[23] BetterCloud (2025). “The big list of 2025 SaaS statistics.” https://www.bettercloud.com/monitor/saas-statistics/
[24] Gartner (2025). “Australia IT Spending Forecast.” https://www.themissinglink.com.au/news/australias-top-it-spending-priorities-in-2025
[25] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[26] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[27] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[28] BetterCloud (2025). “State of SaaS 2025 Report.” https://www.bettercloud.com/monitor/saas-statistics/
[29] BetterCloud (2025). “The big list of 2025 SaaS statistics.” https://www.bettercloud.com/monitor/saas-statistics/
[30] BetterCloud (2025). “The big list of 2025 SaaS statistics.” https://www.bettercloud.com/monitor/saas-statistics/
[31] Grand View Research (2025). “Asia Pacific Software As A Service (SaaS) Market Size & Outlook, 2030”; Zylo (2025). “111 Unmissable SaaS Statistics for 2025.” https://www.grandviewresearch.com/horizon/outlook/software-as-a-service-saas-market/asia-pacific
[32] Gartner (2025). “Magic Quadrant for SaaS Management Platforms.” https://www.gartner.com/en/documents/5605991
[33] Gartner (2025). “Magic Quadrant for SaaS Management Platforms.” https://www.gartner.com/en/documents/5605991
