BetterCloud: 60% of SaaS Vendors Bill by Usage in 2026

By 2026, a projected 60% of SaaS vendors will bill by usage, a seismic shift driven by the rise of generative AI. As conversational interfaces move from novelty to the default user experience, the traditional SaaS playbook is rapidly evolving. Flexible pricing, defensible data moats, and agentic orchestration are now the key factors determining which companies will thrive as resource-intensive AI models reshape industry margins.

SaaSmageddon: Will AI Eat the Software Business?

The transition to usage-based billing aligns costs with value in the AI era. As vendors incorporate resource-intensive AI features, flat-rate subscriptions no longer reflect variable compute expenses. This model allows companies to monetize heavy users accurately while offering customers transparent, scalable pricing that matches their consumption.

Industry data confirms this trend. According to the BetterCloud 2026 report, 60% of SaaS vendors are adopting usage-based billing, with hybrid models delivering a 21% higher median growth rate than legacy per-seat plans. This aligns with Gartner's forecast that 80% of enterprises will deploy generative AI by 2026, compelling finance teams to track token costs with the same diligence as cloud spend.

The rise of agentic automation is a primary catalyst. Research from Jotform AI in SaaS highlights a 280% increase in enterprise AI feature adoption since 2023, with projections that one-third of all packaged software will include autonomous agents by 2028. These intelligent agents streamline workflows and reduce reliance on complex user interfaces, shifting the competitive focus from UI design to secure data management.

Revenue models in flux

Many AI calls run on GPUs that cost dollars per hour, so vendors expose those costs transparently. Three trends dominate:

• Usage based meters tied to API calls or tokens processed.
• Hybrid plans that add overage fees on top of a base subscription.
• Outcome pricing where an agent books a meeting or closes a ticket and triggers a micro-payment.

The risk of unbundling

This new paradigm introduces the risk of commoditization. As UncoverAlpha's analysis on the Great SaaS Unbundling suggests, natural language agents could render many single-purpose applications obsolete by 2027. Point solutions lacking proprietary data or deep domain expertise are particularly vulnerable as large platforms like Salesforce and ServiceNow integrate their own AI agents to orchestrate tasks across their ecosystems.

In this environment, "data gravity" becomes a critical defense. Companies with vast, proprietary datasets, such as Salesforce, can train powerful private models and command premium fees for access. This strategy is widespread; a 2026 pricing guide from Valueships reveals that 68% of vendors are gating AI features behind higher-priced tiers, effectively turning data ownership into a powerful tool for revenue generation and churn mitigation.

What to watch in 2026

Investor sentiment reflects this transition. While capital markets initially reacted negatively to the uncertainty - with stocks like ServiceNow seeing significant volatility - analysts now project robust 18.75% subscription growth for 2026, driven by AI upsells. Key metrics for investors will include the percentage of revenue tied to usage, the gross margin on AI transactions, and rates of agent adoption.

For operators, the path forward is clear: integrate natural language interfaces, tie pricing to measurable actions, and build a defensible moat around proprietary data.

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Why are 60% of SaaS vendors switching to usage-based billing by 2026?

The switch is driven by the variable compute costs of AI. Traditional per-seat models cannot account for resource-intensive actions like token processing or API calls. According to the 2025 Maxio SaaS Pricing Report, hybrid plans (a subscription base plus metered usage) achieve the highest median revenue growth (21%) by capturing value from power users while offering flexibility.

How does AI commoditize traditional SaaS features?

AI-powered natural language agents allow users to bypass complex user interfaces. A single prompt can execute tasks that previously required navigating a dedicated application, diminishing the value of "great UX." Analysts predict this could unbundle up to half of existing SaaS tools as horizontal platforms like Salesforce orchestrate workflows through integrated agents.

Is ServiceNow's 40% stock drop an overreaction?

Many on Wall Street view the drop as an overreaction. Despite market volatility, over 30 analysts maintain a 'Buy' rating on NOW, citing strong fundamentals. The company's Now Assist AI platform surpassed $600 million in annual contract value, demonstrating that AI enhancements are successfully translating into significant revenue, not just market hype.

What makes data custody valuable in an AI-first world?

In an AI-first world, secure data access is a key pricing lever. As AI agents interact with sensitive corporate records, vendors can monetize this access through metered pricing per query, token, or outcome. BetterCloud reports that AI add-ons can increase total contract value by 30-110%, transforming secure data custody from a compliance requirement into a core revenue driver.

How should finance teams prepare for unpredictable AI bills?

To manage unpredictable AI costs, finance teams should adopt FinOps best practices, turning volatile spend into a planned expense:

• Negotiate hard caps and overage rates up front
• Forecast AI spend the same way you forecast cloud egress - monthly burn reviews with FinOps tags
• Demand real-time dashboards that surface token or task consumption before the invoice arrives