UK firms waste GBP £8.9 billion on unused software

Marketing Signals has published research estimating that UK businesses could be wasting up to GBP £8.9 billion a year on unused software subscriptions. Its central estimate puts the annual total at GBP £7.6 billion.

The figures come from a model based on UK software market data and published waste rates from industry sources, rather than a standalone survey. Marketing Signals used a UK SaaS and cloud software market value of GBP £13.75 billion, then applied estimates of unused or underused spending from Zylo, Gartner as cited by Productiv, and Vertice.

That produced a range of GBP £4.95 billion to GBP £8.94 billion. The published midpoint uses a 55% waste rate drawn from Gartner's estimate of wasted or heavily underused software spending.

The report identifies unused software seats, forgotten free trials and unreviewed subscription renewals as the main sources of wasted spending. It argues that these costs often build gradually as companies add new tools without removing older ones.

Using Office for National Statistics business population data, the model also breaks down the estimated waste by company size. Large businesses with 250 or more employees account for the biggest losses in cash terms, with average annual waste of GBP £434,949 each.

According to the model, medium-sized businesses lose an average of GBP £31,351 a year. Small businesses lose GBP £6,333, while micro businesses lose GBP £1,164. The report suggests these sums may attract less scrutiny because spending is spread across smaller teams and subject to less formal oversight.

Regional split

London has the largest estimated regional share of the total, at about GBP £1.5 billion a year. The report attributes this to the concentration of businesses in the capital, rather than to higher waste among London firms.

By sector, professional and technical services record the largest modelled total at roughly GBP £1.16 billion. Retail, wholesale and construction follow close behind.

Marketing focus

The research gives particular attention to marketing departments, where software estates can expand quickly across analytics, advertising, design, automation and content tools. It argues that this area is especially exposed because businesses often buy specialist products for individual campaigns or teams without folding them into a wider purchasing review.

Zylo data cited in the report shows that the average organisation now uses about 103 marketing-related software applications. At the same time, only 31% of marketing leaders say their software stack is properly integrated, while 64% say they struggle to track everything they have bought.

The report also cites Gartner data showing that marketers use only 42% of their martech functionality, down from 58% in 2020. That suggests companies may be paying not only for entirely unused products, but also for tools whose features are only partly adopted.

Another source of spending identified in the research is what it calls "zombie tools", including AI subscriptions bought individually for tasks such as copywriting, image generation and transcription. These services are often charged to personal cards or expensed separately, making them harder for finance or procurement teams to track once staff stop using them.

Marketing Signals estimated that these AI-related subscriptions alone cost UK marketing departments GBP £63.7 million a year under what it described as a conservative model. The report adds that spending on AI-native software has risen 108% year on year.

The findings point to software management problems that extend beyond procurement teams and central IT functions. In many businesses, different departments can buy overlapping products, renew contracts automatically, or keep paying for services adopted for a short-term need and never switched off.

Harry Nisbet, General Manager, Marketing Signals, commented on the pattern identified in the research.

"What surprised me wasn't the size of the number, it was how familiar the causes are," said Nisbet. "Every business we work with has run into some version of this, a tool someone signed up for eighteen months ago that's still being billed monthly, or three different platforms doing the same job because nobody checked what was already there before buying a fourth. The businesses that get on top of it aren't the ones with the biggest procurement teams. They're the ones who've made reviewing the software stack somebody's actual job, even if that job only takes an hour a quarter."

The report outlines steps for companies seeking to reduce software waste. These include auditing every paid tool and assigning ownership, putting one named person in charge of renewal approvals, asking staff what software they pay for themselves, and checking whether an existing product can meet a need before buying another.

Its central argument is that software waste is rarely caused by a single bad purchasing decision. Instead, it tends to emerge from routine renewals, limited visibility across teams and the steady growth of digital tools that outpaces internal controls.