Decodo says 50-person firms spend USD $141,606 on SaaS

Decodo has published an analysis estimating that a typical 50-person B2B company spends USD $141,606 a year on SaaS subscriptions, excluding cloud infrastructure costs.

That works out to about USD $2,832 per employee a year, based on list prices and seat allocations across a modern software stack. The analysis divided spending into core operational tools, department-specific software, and utility or shadow IT applications.

Core operations software accounted for the largest share at USD $77,260 a year. This category covered 10 tools, including Salesforce, Google Workspace, Slack, and Asana.

Department-specific tools added USD $35,146 to the annual bill. That group included products such as ChatGPT, Calendly, Loom, and Grammarly.

Utility and shadow IT tools made up the remaining USD $29,200. Decodo described these as productivity and convenience applications adopted by individuals or small groups, often without direct IT oversight.

Decodo argued that software spending is often underestimated because it is spread across many separate invoices rather than managed as a single budget line. It said the combined annual cost for a 50-person business could rival the salary cost of a senior engineer.

Its figures also suggested software costs rise with headcount. Decodo estimated annual SaaS spending of about USD $35,000 for a 10-person business, around USD $75,000 for a 25-person company, roughly USD $142,000 at 50 employees, and about USD $325,000 for a 100-person organisation.

The analysis said costs tend to climb sharply in the 25-to-50 employee range, when companies usually move to higher-tier subscriptions and add more tools for areas such as compliance, analytics, and growth.

AI costs

Artificial intelligence software is adding to that mix as companies adopt writing assistants, analytics products, coding copilots, and support bots. According to Decodo, these products are often layered on top of existing subscriptions rather than replacing them.

"Most companies would never approve a $141K hire without a job description, a performance review, and a clear ROI. But that's exactly what they do with their software stack every year, they just approve it one $99 invoice at a time," said Vaidotas Juknys, Chief Executive Officer of Decodo.

Juknys said some AI products can begin as inexpensive add-ons before becoming among the costliest tools as usage expands or pricing changes. He said businesses should assess whether a new AI application replaces an existing product or simply adds another expense.

"While these tools promise efficiency, they frequently add new costs rather than replacing existing ones. At the same time, AI has the potential to consolidate multiple functions into fewer platforms, potentially reducing overall spend in the future."

"For now, the reality sits in between. Some AI tools that start as cost-effective solutions can quickly become among the most expensive as usage scales or pricing models shift. The key question for businesses is simple: Does a new AI tool replace an existing one, or just add another expense?" said Juknys.

Hidden burden

Beyond subscription fees, businesses also face added costs tied to integrations, onboarding, security exposure, and licence management, according to Decodo. It argued that each new tool can increase maintenance work as automations fail, APIs change, and administrators spend more time tracking renewals, usage, and account access.

New hires can also lose time learning multiple systems before they can contribute fully, the analysis said. A larger software stack can also widen the security surface area and increase compliance risks.

Cloud infrastructure and hosting costs were not included in the USD $141,606 estimate. Decodo said those costs can add a further USD $24,000 to more than USD $120,000 a year, depending on usage.

To control spending, Decodo recommended that businesses build a full inventory of subscriptions, measure actual usage over the previous 90 days, identify overlapping products across departments, assess cost against business outcomes, and renegotiate contracts or consolidate platforms.

The findings reflect a broader issue for business software buyers, as spending on workplace applications increasingly spreads beyond central IT teams. In many organisations, procurement decisions now sit across departments and individual teams, making it harder to maintain a single view of total software costs.

That trend has become more pronounced as companies adopt specialised tools for sales, collaboration, marketing, support, and AI-assisted work. Decodo's breakdown suggests that for smaller and mid-sized B2B companies, the cumulative effect can turn what appear to be modest monthly subscriptions into a material annual operating expense.