Corporate clients are reining in IT spending during contract renewals, making it harder for enterprise software vendors to retain business. Companies are shifting funds from traditional software-as-a-service (SaaS) products to high-priority AI projects. Overall IT spending is growing, but gains are concentrated in AI and the data center infrastructure it requires.
Many software vendors are raising prices by 8% to 15% annually. A recent survey found that 28% of enterprise software budgets go to vendor-driven upgrades customers did not want. Many large buyers say they have little negotiating leverage, leaving less funding for innovation.