Consumption Pricing is not just about driving growth; it’s necessary for survival in 2025.

CFOs are cutting SaaS spending like never before. The average number of SaaS applications companies use is trending down (see below), and the average overall SaaS spend has dropped even faster.

The thing CFOs hate most is unused licenses. According to SaaS Management firm Zylo, 53% of SaaS licenses go unused each month. That’s astounding and unsustainable. In their most recent survey, “Seven in ten respondents said that reducing [SaaS license] waste is their top SaaS management priority” this year.

Unused licenses occur for various reasons. Sometimes, underutilization is due to a poor estimate of users up front, slow implementation, weak training, or simply a clunky app that’s hard to use. However, other, more mundane things like employee turnover or position changes also cause significant underutilization.

Do you know which applications have zero underutilization? Those with consumption pricing. A company may be using an application less than it should, but it never pays for an application it is not using. When it comes to renewal time, there is a long list of SaaS products on the chopping block ahead of you.

Consumption pricing is also advantageous when securing a new booking in this environment. Customers are pushing to lower their commitment levels and maintain flexibility. According to the same Zylo data, SaaS contract durations have decreased over the past two years. Consumption pricing fits perfectly into this trend.