According to a new analysis from web data infrastructure firm Decodo , Georgia’s 11,719 mid-market businesses (10–249 employees) collectively spend just over $1 billion annually on SaaS subscriptions.

What makes the data interesting is not just the total, but how structured and concentrated the spending is across company sizes:

Mid-sized businesses across the U.S. are collectively spending tens of billions on software subscriptions each year, with spending heavily concentrated in a small number of states.

A new analysis by web data infrastructure firm Decodo estimates that companies with 10–249 employees across key service industries now spend an estimated $31.8 billion annually on SaaS.

The study uses a bottom-up model combining U.S. Census Bureau business counts with company-size SaaS spending benchmarks across industries, including information, finance, professional services, and administrative support.

California alone accounts for nearly $4B in SaaS spend

The data reveals a highly uneven distribution of SaaS spending across the U.S., with a small number of states dominating total demand.

In California alone, more than 47,000 mid-market businesses (10–249 employees) collectively spend nearly $4 billion annually on SaaS products. Within this, companies with 100–249 employees account for over $1.2 billion of that total.

SaaS costs quickly reach six figures at the company level

While national spending runs into the billions, individual companies are also facing significant software costs.

For a typical 50-person B2B company, total annual SaaS expenditure is estimated at:

This cost equates to approximately $2,832 per employee per year, excluding cloud infrastructure and hosting costs, which can add a further $24K to $120K+ annually depending on usage.

SaaS spend scales rapidly as companies grow

The analysis shows that SaaS costs increase sharply with company size:

Costs typically accelerate at the 25–50 employee stage, when businesses adopt more specialized tools and upgrade to higher-tier subscriptions for growth, compliance, and analytics.

How is AI expansion impacting business toolstacks?

AI is rapidly expanding the modern SaaS stack, with companies layering in writing assistants, analytics tools, coding copilots, and support bots – often at premium prices. 

Vaidotas Juknys notes, “While these tools promise efficiency, they frequently add new costs rather than replacing existing ones. At the same time, AI has the potential to consolidate multiple functions into fewer platforms, potentially reducing overall spend in the future.

“For now, the reality sits in between. Some AI tools that start as cost-effective solutions can quickly become among the most expensive as usage scales or pricing models shift. The key question for businesses is simple: Does a new AI tool replace an existing one, or just add another expense?”

The full analysis can be found here: https://decodo.com/blog/b2b-toolstack-cost