Almost two-thirds of software-as-a-service licences tracked by procurement company Vertice were unused or underused in the second quarter of 2026, suggesting that many businesses are paying for more seats than their staff need.
Vertice classified 65% of the SaaS licences it tracked as either wholly unused or underutilised, up from 62% a year earlier. SaaS, short for software as a service, is software supplied online through a recurring subscription rather than bought once and installed locally.
Fully unused licences accounted for 14% of the total, down from 15%. The underutilised category rose from 47% to 51%. Vertice places a tool in that category when fewer than half of the licences purchased for it are being used.
The figures are drawn from more than $75bn in global processed spending managed by Vertice during 2026. They are commercial data from a company that sells procurement and software-spending services, not an independent estimate of waste across the whole economy.
They nevertheless point to a practical distinction. Most of the reported waste was not software that had been abandoned completely. It sat inside products that companies were still using, but for which they had bought too many seats.
The bigger saving may be inside useful contracts
Vertice estimates that businesses with more than 10,000 employees spend $18.9m a year on unused and underutilised software. Its estimate rose from $17.6m in the first quarter of 2026.
That does not mean those companies could cancel every affected application and recover the full amount. A business may need a product used by hundreds of staff while still paying for hundreds of additional accounts that sit idle.
The immediate task is therefore often to reduce the number of paid seats or premium features before renewal, rather than remove the software altogether.
Subscriptions make that easy to overlook. A licence can remain assigned after an employee leaves or changes jobs. Two departments can buy applications that perform similar work. A contract can renew automatically after the manager who approved it has moved elsewhere.
Finance can see the invoice, while the IT department can see logins and access rights. Procurement may hold the contract and an individual department may control the budget. Unless those records are brought together, nobody has a complete view of cost and usage.
Shadow IT is related, but it is not the same problem
Some software escapes central oversight because employees or departments acquire it outside the normal IT process. This is commonly called shadow IT.
A 2019 systematic review of shadow IT research defined it as technology deployed or managed by business units without alignment with the central IT organisation. The review found that its effects can include both benefits and risks.
Not every unused licence is shadow IT, and not every unauthorised tool is wasteful. An exploratory study published in Business Information Review found that employees sometimes turned to unapproved collaboration tools because the systems supplied by their employers did not let them communicate efficiently. Such tools could help geographically dispersed staff share knowledge more quickly.
This matters when companies review subscriptions. Cancelling a poorly governed application may remove a genuine duplication, but it may also take away a tool that staff adopted because the approved alternative was inadequate.
AI subscriptions add cost and governance risks
Generative AI can add another layer of software spending. Teams can subscribe separately to writing tools, coding assistants, meeting transcription services and research platforms, often with overlapping functions.
A 2025 mixed-methods study of shadow AI, based on a survey of 140 professionals and interviews with 10 executives, found that employees widely viewed AI as a productivity tool while company governance often lagged behind their actual behaviour.
For employers, an unapproved AI subscription may create two separate concerns. The company may be paying for a product that duplicates another service, while employees may also be putting business information into a system that has not passed its security and data-governance checks.
Usage data still require judgement. Software used only a few times a year may be necessary for tax filings, regulatory work, engineering or disaster recovery. A low login count is evidence for a review, not proof that a licence has no purpose.
A workable control is to give every subscription a named owner, compare paid seats with active users before renewal, and connect software access to employee joining, role changes and departures. The test should be repeated because a purchase that was sensible a year ago may no longer match the workforce using it today.
