SaaS shrinkflation

SaaS shrinkflation remains a hidden cost

SaaS shrinkflation – the practice of vendors reducing product features or service levels while maintaining or increasing prices – remains a significant factor in software procurement. Vertice’s Q1 2026 data shows that 27% of SaaS vendors are currently practicing some form of shrinkflation. While this is a slight improvement from the 30% peak seen in Q3 2025, it indicates that over a quarter of all software renewals are still subject to hidden value erosion.

Is software shrinkflation slowing down?

The data shows a marginal quarterly decline, suggesting that while the most aggressive "unbundling" phase has passed, the practice has become a structural part of vendor pricing strategies.

• Q1 2026 (27%): The current benchmark shows a 1% drop from the previous quarter. However, the fact that nearly 1 in 4 vendors still utilizes these tactics means buyers must remain highly vigilant during renewal negotiations. Especially with prices continuing to rise by 32% YoY.
• The downward slope: The move from 30% (Q3 2025) to 28% (Q4 2024) to 27% (Q1 2026) suggests that market pushback and procurement scrutiny are beginning to have an effect. Vendors are finding it harder to strip away core features without facing churn or aggressive price re-negotiations.

Data source: These insights are derived from over $30bn of global processed spend managed by Vertice in 2026.