So it’s hard to get a sense of just what is happening in SaaS.  “B2B2B” remains in a big funk, with Salesforce projecting a decline to single-digit growth for the first time ever next year.  And in the aggregate, public SaaS companies are growing the slower they have in history.  Pitchbook summarizes this nicely here.

Median year-over-year growth for public SaaS companies has fallen below 20% for the first time:

And yet … both AI and the consumer economy remain strong:


How does this all net out?

Well, according to Gartner, the AI gains more than outweigh the other losses.  They’ve raised their expectations for both 2024 and 2025 for SaaS:

Gartner is now projecting overall SaaS spend to be up a stunning 20.0% this year, from $247 Billion.  And up another 19.4% next year, to $294 Billion. 

That’s a lot of spend increase.

No one said it’s easy.  Budgets everywhere are under more scrutiny, and pressures remain.  Everyone in impacted segments from Salesforce to HubSpot to Asana has said it isn’t getting any easier for them.  And a lot of this “AI spend”, one way or another, is coming from freeing up budget, by cutting elsewhere.

But overall, AI is fueling an acceleration in SaaS spend.

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