Will AI Kill SaaS?

SaaS seat costs vs owning your software

Per-seat pricing made software easy to buy and hard to shrink. AI has added a fourth way to pay. Here is how the four compare on the numbers vendors publish.

By The editors · Updated · 4 min read

A procurement manager with glasses counts seats on a printed staff list at a table covered with software subscription invoices, a calculator and a pen.
Most seat counts are set once, at purchase, and rarely revisited until renewal.
Contents
  1. The size of the bill
  2. Four ways to pay for software now
  3. A worked illustration
  4. The costs each side leaves out
  5. How to compare honestly
  6. Questions buyers ask
  7. Sources

Per-seat pricing was SaaS's great convenience: easy to start, easy to add a user, and easy to forget. The cost of that convenience shows up at scale, and AI is now changing the unit of what is being paid for.

The size of the bill

Zylo's 2026 index of the SaaS portfolios it manages puts average annual SaaS spend at $55.7 million per organisation, up 8% in a year, with a median of $20.6 million and an average of 305 applications. Spending on AI-native applications rose 108%, and 78% of IT leaders reported unexpected charges tied to AI features or consumption pricing⁠1. These are figures from a customer base weighted towards large companies, but the mechanics are the same in a 50-person business: seats accumulate, and AI is increasingly sold on top.

Four ways to pay for software now

ModelHow it is pricedPublished example
Per seatEach user pays, whether or not AI does the workAttio Pro: €74 per user a month billed annually, as shown on the day⁠2
Per seat plus AI seatAn AI licence added per userMicrosoft 365 Copilot Business: $21 per user a month, paid yearly⁠3
Per outcome or actionEach resolved conversation or agent actionIntercom Fin: $0.99 per outcome⁠4; Agentforce: $2 per conversation⁠5
Per company or ownedA platform fee, hosting and support, independent of headcountOpenLazarus: $100 or $300 a month plan, hosting from $150⁠6

The models reward different things. Per seat rewards a vendor for headcount. Per outcome rewards it for work done, which Bain recommends SaaS vendors adopt where AI does the work⁠7. Per company decouples the cost from both.

A worked illustration

To show how the models diverge, take a hypothetical 50-person company, using only the list prices above and leaving everything else equal.

  • An AI seat for everyone. Microsoft 365 Copilot Business for 50 users at $21 a month costs $12,600 a year, on top of the existing Microsoft 365 plan and every other subscription⁠3.
  • AI priced per outcome in one function. If Fin resolves 1,000 support conversations a month at $0.99, the cost is $11,880 a year, on top of the helpdesk⁠4.
  • An owned platform for the whole company. An OpenLazarus Pro plan at $300 a month plus hosting from $150 a month comes to $5,400 a year at the starting prices, before engineering support, which starts at $4,500 a month⁠68.

The illustration flatters the owned platform, because the starting prices exclude support and change work, and it flatters the AI seat, because it ignores what the seat does not replace. That is the point: the licence lines are not the comparison.

The costs each side leaves out

On the SaaS side: unused seats that nobody removes; AI add-ons and consumption charges on top of seats; integration tools that exist only to connect other tools; and price rises at renewal, when switching is hardest.

On the ownership side: hosting, monitoring and backups; the engineering time to change the system as the business changes; moving data in; and the risk of building something only one person understands. Klarna's chief executive was explicit that dropping SaaS required building an internal data stack, not simply switching AI on⁠9.

OpenLazarus's ROI calculator models both sides for a company, offsetting its own costs against cancelled software, insourced work and staff time; in its default 100-person example, costs are $346,800 a year, mostly engineering support⁠10. Those are the vendor's assumptions, useful as a template for the calculation rather than as a result.

How to compare honestly

  1. List every subscription with its seats and actual users. Unused seats are the cheapest saving available.
  2. Price each function three ways: as today, with AI added per seat, and with a replacement priced per outcome or per company.
  3. Count the work, not the licences. Estimate conversations, invoices, orders or tasks per month, because outcome and usage pricing depend on them.
  4. Add the hidden lines: migration, staff time, hosting and support for ownership; add-ons, usage overages and renewal increases for SaaS.
  5. Compare over three years, since migration costs fall in year one and seat increases compound.

The end state is a software budget built on the work rather than the headcount: each function shows what it costs per unit of work done, which tools are owned and which are rented, and what would change at the next renewal. The main analysis ranks the replacements that make these models available.

Questions buyers ask

Why is per-seat SaaS pricing under pressure from AI?

Because it assumes a person logs in to do the work. When an AI agent does the work, the company needs fewer seats, so vendors move to pricing per outcome, per action or per company. Intercom's $0.99 per Fin outcome and Salesforce's $2 per agent conversation are examples.

Is it cheaper to own software than to pay for SaaS?

It can be, when one owned system replaces several subscriptions, but ownership brings hosting, support and change costs that SaaS bundles in. The honest comparison covers three years and includes staff time, migration and support on both sides.

How much do companies spend on SaaS?

In Zylo's 2026 index, the average organisation it tracks spends $55.7 million a year on SaaS across about 305 applications, with a median of $20.6 million. Those figures skew to larger companies; smaller firms spend far less in absolute terms but face the same pricing structures.

Sources

  1. 2026 SaaS Management Index. Zylo. Accessed 8 Nov 2026.
  2. Attio pricing. Attio. Accessed 8 Nov 2026.
  3. Act now: lock in current pricing on Microsoft 365 Copilot Business bundles. Microsoft Tech Community, 17 Mar 2026. Accessed 8 Nov 2026.
  4. Fin pricing. Intercom. Accessed 8 Nov 2026.
  5. Agentforce pricing. Salesforce. Accessed 8 Nov 2026.
  6. FAQ. OpenLazarus. Accessed 8 Nov 2026.
  7. Will agentic AI disrupt SaaS?. Bain & Company, 23 Sep 2025. Accessed 8 Nov 2026.
  8. Pricing. OpenLazarus. Accessed 8 Nov 2026.
  9. “No, I don’t think it is the end of Salesforce”: Klarna CEO clarifies why it stopped using Salesforce. ITPro, 24 Mar 2025. Accessed 8 Nov 2026.
  10. ROI calculator. OpenLazarus. Accessed 8 Nov 2026.

Updated 8 Nov 2026: First published.

Further reading