Your software subscriptions are adding up to more than you think - here's how to change that

The average UK business spends about £6,500 per employee per year on software subscriptions. For a company of 20 people, that's £130,000 spent annually on tools alone. A 2024 SaaS management index from Zylo found that roughly half of those licences aren't being used by anyone.

Most business owners don't set out to overspend on software, obviously - it's more that each tool gets signed up for individually, usually for a good reason at the time, and nobody is really keeping a running total of what the whole lot costs together. It tends to be one of those things where you don't notice until someone in finance flags it or you sit down and actually go through the bank statements.

Prices go up more than you'd expect

Vertice, which tracks software pricing across thousands of contracts, recorded SaaS price inflation of 12.2% in 2024 - about four times faster than what UK consumers were seeing on groceries. A separate UK-focused analysis put SaaS inflation at 8.7% for 2023, with 73% of vendors having raised their prices that year.

Some of these increases are pretty hard to miss - Microsoft increased Power BI Pro pricing by 40% in 2025, and Adobe raised prices between 17% and 50% across several products in 2024, which caused a fair amount of frustration at the time. A Vertice contract analysis found that 74% of software vendors had raised their list pricing at some point since 2019, so it's not just the big names doing it.

Other increases are not as clear. Vendors remove features from lower tiers without making a big deal about it, retire grandfathered plans, or add consumption-based charges that can inflate a monthly bill by 50% or more. A tool that cost £15 per user per month three years ago might now be £22, and if your team has also grown from 12 to 25 people in that time, just that one subscription costs three times what it did when you signed up.

Half of what you pay for probably isn't being used

IT Brief reported that nearly one in every five pounds UK firms spend on SaaS is lost to unused or duplicate licences, and the Zylo index puts average licence utilisation at 49% across the companies it tracks, which basically means that for every tool you're actually using there's probably another one you're paying for that nobody has logged into in months.

Smaller companies run about 16 different SaaS applications on average, rising to 47 for businesses between 100 and 500 employees. At those numbers, it's hard to avoid duplication. Two departments using different project management tools. A CRM that overlaps with a marketing platform that overlaps with a customer support tool. Subscriptions that someone signed up for during a free trial and never cancelled.

A breakdown of one 15-person UK digital marketing agency found they were running 10 to 15 subscriptions at £10 to £50 per user per month, putting their annual bill between £27,000 and £54,000. When they reviewed what was actually being used, cutting two redundant tools saved them close to £10,000 a year.

The costs that don't appear on any invoice

On top of the licence fees themselves, every tool comes with setup costs that tend to be bigger than you'd think when you're first signing up - configuration, migrating your data across, getting the team trained on yet another platform. That typically runs between £5,000 and £10,000 per tool, and then there's the ongoing admin of managing licences and permissions across 16-plus different platforms, which is a job in itself that someone in the business ends up doing on top of their actual role. And whenever staff have to switch between apps that don't share data, manually re-entering information or exporting CSVs to move things between systems, that's paid time going to work that the software was supposed to be handling.

Then there's the integration side of things, which is where costs can really start to add up in ways that are hard to predict. Connecting tools from different vendors through APIs and middleware sounds like it should be simple enough, but it's not really ever as easy as the sales pitch makes it seem, and businesses regularly end up spending thousands on consultants just to get two systems sharing data properly, and even then the connections tend to need ongoing maintenance because every time a vendor updates their API something stops working and someone has to go in and fix it.

At what point does building your own system make more sense?

Custom software used to be something that only really made sense for large enterprises with big IT budgets, but that's been changing over the last few years. The UK custom software development market was valued at roughly $1.9 billion in 2024 and it's growing quickly, and a lot of that growth is coming from smaller businesses that have done the maths on what they're spending on subscriptions and worked out that a purpose-built system could actually cost less over a three to five year period.

It's worth doing the comparison properly if you think you might be in that position. Add up what you're currently spending on subscriptions, integration work, consultant fees, and the staff time that goes to manual workarounds, then project that forward three to five years and factor in the kind of annual price increases we've been seeing. Compare that total against the cost of building one system that does what you actually need, and the gap is often smaller than people assume.

For businesses in the 10 to 200 employee range, the numbers are often closer than expected. Specialist development firms now offer fixed-price projects for this market, replacing multiple subscriptions with a single system built around the business. Smaller projects - automating a specific workflow or connecting two key systems - can pay for themselves within the first year when measured against the subscriptions and manual effort they replace.

Signs your subscription setup has run its course

Not every business needs to go down the custom software route, and it would be wrong to suggest otherwise - sometimes a proper audit and cancelling a few unused subscriptions is genuinely all that's needed. But if you're seeing several of these patterns at the same time, it's probably worth looking at things more seriously.

Monthly software spend keeps going up but nothing has got easier. New tools keep being added to fix problems caused by the tools you already have.

People in the team are spending a lot of their time on manual data entry. Copying information between systems, maintaining spreadsheets that bridge gaps between platforms, re-entering the same data in multiple places.

Integrations need constant attention. Zapie

onnections and API workarounds that break when something updates, or can't handle the volume you need.

Enterprise pricing kicked in but the extra features are irrelevant. You crossed a user threshold, got moved to a higher tier, and you're paying for capabilities your business will never use.

Off-the-shelf tools can't support what makes your business different. If your competitive advantage comes from a specific process or workflow, software built for a general audience will always be a compromise.

Practical first steps

The obvious starting point is to just go through every subscription your business pays for and work out who actually uses what. Cancel anything nobody has logged into recently - it costs nothing to do this and in most cases it saves a surprising amount of money on its own.

If the audit shows deeper problems - tools that can't share data, workflows that depend on spreadsheets, costs that keep growing without matching improvements - then it's worth working out whether a custom build makes financial sense. The most useful thing you can do before talking to a developer is write down exactly what you need the software to do. A software requirements specification template can help with that, covering everything from business objectives to technical needs, so you go into those conversations with a clear brief.

Whatever direction you end up going in, it makes sense to start with one problem rather than trying to overhaul everything at the same time. Pick the workflow that's costing you the most in subscriptions and manual effort, sort that one out, measure what it actually saves, and then decide whether it's worth doing more. The businesses we've seen get the best results from custom software are generally the ones that took it step by step rather than trying to replace their entire stack in one go.