UK SMEs could waste GBP £10,000 on unused software

UK SMEs could be wasting up to GBP £10,000 a year on unused software subscriptions, according to Fasthosts. The web hosting company estimates that nearly 40% of workplace software goes unused.

The figures highlight growing pressure on smaller businesses as software costs rise. SMEs typically use between 10 and 20 software-as-a-service tools across functions such as marketing, sales and operations, while annual price increases in the sector range from 8% to 25%.

Rising Bills

Software subscriptions have become a significant operating expense for many smaller companies, especially those that have added tools over time for different departments and workflows. That has left many firms with overlapping products, underused licences and multiple applications needed to complete a single process.

Fasthosts also pointed to wider market data showing that businesses globally now spend an average of USD $7,900 per employee each year on SaaS products, up 27% over the past two years.

It cited findings indicating that 40% of organisations had at least one redundant SaaS tool in place during 2024. Separate research found that 39% of employees do not use the software their companies provide.

To illustrate the cost, Fasthosts used the example of a 15-person digital marketing agency that uses services such as Slack, Asana, HubSpot, SEMrush, Hootsuite, and Xero. With an estimated 10 to 15 subscriptions priced at GBP £10 to GBP £50 per user per month, annual spending could reach GBP £27,000 to GBP £54,000.

On that basis, removing just two tools from the software stack could save up to GBP £10,000 a year. The estimate shows how quickly costs can add up when teams adopt separate systems without regular reviews to determine whether they are still needed.

AI Shift

Fasthosts argues that AI agents are beginning to change that model by taking on tasks that would otherwise require several different applications. These systems can work across platforms and automate processes with limited manual input, potentially reducing the number of subscriptions a business needs.

According to the company, AI agents can manage tasks such as lead management, customer communication, reporting and scheduling within a single workflow. That would make them an alternative to clusters of standalone products connected through integrations and manual oversight.

This reflects a broader shift in how businesses assess software purchases. Instead of adding specialised tools for each task, some are considering whether AI-based systems can combine those tasks into a single layer.

Search interest in AI agents has risen sharply over the past year, according to Fasthosts, alongside growing attention to terms such as agentic AI. It added that products including Claude, Zapier and Lindy AI are helping push more businesses towards automated workflow tools that do not require large internal IT teams.

Pricing Change

The spread of AI is also changing how software providers charge for their products. For years, most SaaS companies relied on per-seat pricing, with customers paying based on the number of employees using the platform.

That structure is now under pressure because one AI agent can complete work that previously required several staff members or multiple tools. In response, providers are shifting towards usage-based or outcome-based pricing, charging for actions such as conversations, resolutions or completed tasks.

Examples cited by Fasthosts include Salesforce Agentforce, which charges about USD $2 per conversation, and Zendesk AI, which charges between USD $1.50 and USD $2.00 per automated resolution, in addition to other fees. So even if companies reduce the number of software licences they hold, they may still face a different cost structure.

Fasthosts says this creates a tension in the market. Vendors are using AI features to justify new charges and higher-tier packages, even as the same technology could help customers buy fewer products.

Around 40% of enterprise SaaS is expected to include outcome-based pricing elements by 2026, according to the company. For smaller firms, that could make software spending less predictable unless they review how tools are used and whether multiple subscriptions can be consolidated into fewer systems.

For SMEs, the underlying issue is not only the headline cost of software, but how fragmented those purchases can become over time. If nearly 40% of software goes unused, many businesses are paying for access they no longer need.

Against that backdrop, cutting even a small number of subscriptions could make a noticeable difference to annual budgets, especially for companies already dealing with inflation and pressure on operating margins.

For SMEs reviewing their technology estates, the key question is how many current subscriptions are essential and how many remain in place simply because no one has switched them off.