Corporate software spending rose by 10 percent in 2024, driven by the widespread adoption of AI features that increased overall costs, according to a new report from Tropic. The analysis, which reviewed $11 billion in corporate technology spending, found that OpenAI led all vendors with a 146 percent growth rate. At the same time, traditional enterprise tools like Salesforce and Slack experienced a slight decline in market share. The report highlights that companies are strategically investing in software, prioritizing tools that improve operational efficiency while pushing back against high-cost AI add-ons. Many businesses are also consolidating their software stacks by choosing integrated platforms over standalone solutions to control expenses.
The study reveals that AI is significantly influencing software pricing, with 19 of the 20 fastest-growing companies prominently featuring AI in their offerings. Some vendors are using AI-driven enhancements to justify price increases, moving away from traditional seat-based pricing to variable, usage-based fees. Security software saw the highest price surge, rising by 56 percent per full-time employee. Additionally, contract lengths have grown to an average of 14.2 months, as suppliers push for long-term commitments. The report advises businesses to adopt a "spend-per-employee" approach, negotiate renewals early, and carefully assess AI investments to ensure cost-effective procurement strategies.
