The PMC audit starts with your software stack. Not your ads. Not your SEO. Your software stack. The reason is simple: most businesses are funding the wrong channels with money they could recover in a week without cutting a single team member or capability. The data behind that claim is not an estimate. It comes from research across tens of millions of licenses and billions of dollars in managed spend. The numbers are worse than most operators expect.
What is the overlap tax, and how large is it?
The overlap tax is the monthly cost of paying multiple vendors to do the same job - plus the operational cost of your customer data living in three systems that do not talk to each other. Zylo, which manages over 40 million software licenses and $40 billion in spend, found in its 2025 SaaS Management Index that 52.7% of purchased SaaS licenses go unused. The annual waste figure: $21 million per organization on average, up 14.2% from the prior year.
That is only the waste from seats nobody logs into. The overlap cost - paying for four tools that do one job - sits on top of that. BetterCloud's 2025 State of SaaS found that the average company now runs 106 SaaS applications. Sixty-three percent say too many unused or underutilized apps are the primary driver pushing them toward consolidation.
How the redundancy clusters
The Zylo 2024 index provides the clearest breakdown. Redundancy clusters in categories where different departments adopted tools independently without checking what already existed.
- Online training and learning management: 15 duplicative tools on average per organization
- Project management: 11 overlapping tools
- Team collaboration and messaging: 10 parallel tools
- CRM and customer data: multiple systems across sales, marketing, and support, each holding a separate record of the same customer
- Scheduling and booking: common in service businesses, where each new hire adopts a preferred tool without retiring the previous one
How much does the average business spend on software per employee?
Far more than the tools are worth at current utilization rates - and the number doubled in one year. Zylo's 2026 index puts median SaaS spend at $9,455 per employee, up from $4,830 in 2025. The driver is AI tooling: AI-native app spending increased 108% year-over-year, with ChatGPT becoming the single most-expensed application across companies of all sizes.
Cledara's 2025 Software Spend Report, based on 600 companies from 20 to 200+ employees, breaks the waste picture down by size:
| Company size | Avg annual software spend | Avg waste | Waste % |
|---|---|---|---|
| 0 - 20 employees | $121,336 | ~$41,000 | ~34% |
| 50 - 100 employees | $193,716 | ~$66,000 | ~34% |
| 100 - 200 employees | $251,119 | $89,033 | 34% |
| 200+ employees | Varies | 48% of budget | 48% |
The pattern: waste holds near 34% for smaller organizations and climbs toward 48% as companies grow. Scale does not solve the overlap problem - it compounds it.
Why does Gartner's 25% overspend prediction matter?
Gartner's market guide for SaaS management platforms predicted that through 2027, organizations without centralized SaaS visibility will overspend by at least 25% due to unused entitlements and overlapping tools. For a company spending $500,000 annually on software - not unusual at 50 to 100 people at current per-employee rates - that is $125,000 per year sitting in tools that either go unused or duplicate something already paid for.
The Flexera 2025 State of ITAM Report adds a ground-level signal: 35% of respondents said SaaS waste increased over the past year, while complete visibility across IT assets dropped to 43%, down from 47% the prior year. Organizations are losing ground on knowing what they have while spending more on it. Eighty-one percent of SaaS spend is now controlled by business units rather than IT - meaning purchasing decisions happen without a cross-stack view.
The average company runs 15 duplicative online training apps and 11 project management tools simultaneously. That is not a technology problem. That is an operations problem wearing a technology invoice.
What does this look like in specific verticals?
Published research on SaaS waste at the SMB level by vertical does not exist as a single study. What does exist is the pattern visible across every stack audit run on service businesses, restaurants, salons, fitness studios, and local operators.
Restaurants and hospitality
A typical restaurant runs a POS (Toast, Square, or Clover), a separate online ordering platform (ChowNow or BentoBox), a reservations tool (OpenTable or Resy), and two or three delivery integrations each with their own dashboard. Toast now includes Toast Tables, which overlaps directly with existing OpenTable subscriptions - OpenTable charges $249 per month at entry level, and Toast Tables is included in the POS fee. Most operators pay both because nobody stopped to check when Toast added the feature.
Salons, barbershops, and fitness studios
The typical stack includes Mindbody ($139 per month), Vagaro ($30 per month plus per-location fees), and Square Appointments (included in Square's POS tier) - all three doing the same job, all three holding fragments of the client list that do not reconcile with each other. Running two of the three in parallel is common. Running all three is not rare.
What a software audit actually does with this data
The PMC 90-day audit starts with the software stack because it is the fastest path to recoverable budget without cutting headcount, pausing campaigns, or rebuilding anything. Every active subscription runs through four checks.
- Duplication check. Does this tool do something that another tool you already pay for also does? If yes, pick one. The rule is not to keep the cheaper option - it is to keep the one your team actually uses.
- Data visibility check. Are the analytics this tool produces ones you can act on, or are they locked inside its own dashboard? If the data does not feed your CRM or attribution layer, the subscription is paying for numbers you cannot connect to revenue.
- Customer record check. Can a customer interact with your business through this tool without that interaction landing on a contact record you own? If yes, the tool is building someone else's database at your expense.
- True cost check. Monthly fee plus the time cost of training, managing, and reconciling the tool across the rest of the stack. A $30 per month tool with four hours of monthly admin overhead is not a cheap tool.
The consistent range across engagements run to date: $400 to $1,200 per month in recoverable software spend found in the first 30 days. That is not a projection.
Common questions
Is the Zylo data from enterprise companies only?
Mostly, though Zylo's 2025 data includes companies with as few as 500 employees showing average spend of $11.5 million annually across 152 applications. The Cledara data covers companies down to 20 employees and shows consistent waste percentages - around 34% - across smaller organizations.
Our team is small. Does the overlap tax apply to us?
Yes, and often more acutely. At smaller companies, software purchases happen without IT oversight - every manager buys what they need and nobody has a cross-team view. The Cledara data confirms: software waste at companies under 200 employees runs at roughly 34% of total spend.
What is the first tool to cut?
The first tool to cut is the one that duplicates a feature already included in something you are already paying for. The most common: a standalone scheduling tool running alongside a POS or CRM that already includes scheduling. The second most common: a standalone email marketing tool running alongside a CRM that already sends email.
How do I find what we are actually paying for?
Pull your last three months of credit card and bank statements. Filter for recurring monthly charges. List every one. Then ask: does any other tool in the stack do the same thing? If you cannot name the primary user of a subscription, cancel it at the next renewal date.
