Happy New Year, everyone!
2025 was another exciting year filled with impressive AI advancements. As you might expect, some significant cost changes accompanied these new developments.
Because reflecting on the past is one of the best ways to prepare for an even stronger future, here’s your end-of-2025 headline round-up, complete with what you can expect going forward into 2026:
- SaaS costs are rising, but if you have the right tools, there’s no need to despair.
- Outages in 2025 threw plenty of companies for a loop, which means budgeting for redundancy will be a hot topic in 2026.
- The percentage of revenue the average company spends on cloud costs continues to climb.
Get caught up on the details below.
Top Cloud Cost Headlines From December 2025
1. If your SaaS company was forced to raise prices in 2025, you’re not alone
You may be all too aware of how AI has impacted vendor pricing. Companies have reported seeing anywhere from 8 – 12% price hikes on average over the course of last year, with increases up to 25% being fairly common.
Most SaaS providers can’t eat that loss, so they’ve had to pass the price increases down to customers. Companies have been compensating for price hikes by:
- Reducing customer discounts
- Un-bundling features that were previously packaged together
- Charging on a consumption-based model rather than per license
- Building credit-based pricing into any agent products they release
If you don’t relish the idea of providing less value to your customers while asking for more money, it’s worth doing a deep dive into your unit costs to see if you can create wiggle room that would allow you to keep prices competitive without negatively impacting your customers’ experiences.
Take the time to do this now, and you could make 2026 the year you pull well ahead of competitors and escape the cycle of perpetually thinning margins.
2. Executives learned the value of redundant systems the hard way
Company leaders understandably want to focus hard on innovation; it’s less exciting (and can feel like a money drain) to worry about building failsafes and backups for existing workloads.
However, the major service interruptions in late 2025 from cloud provider outages showed numerous executives why it’s important, if not very glamorous, to make sure those redundancies are in place before disaster strikes.
We expect to see companies reprioritizing segments of their budget in 2026 to make room for backup plans they wouldn’t have worried about before. We have a quick-tip guide on maintaining resilience during outages.
Read more: The Outage Anxiety Test: Can You Answer These 3 Questions In Under 10 Minutes?
Since it’s never fun to take cash flow away from the innovations that keep your company at the bleeding edge, we recommend evaluating your unit cost metrics to reallocate funds from places you won’t miss.
You’d be surprised how much you can trim by reducing your spend on idle resources or repackaging your product tiers to return a bigger profit.
3. Inherently unpredictable cloud spend now equals about 10% of revenue for the average company
If that headline doesn’t make you nervous enough, about a quarter of respondents to Cloud Capital’s survey reported that they spend up to 20% of their revenue on cloud costs.
That means cloud spend (including AI and machine learning costs) falls in second place — just behind personnel costs — as the second-highest operational expense for these companies.
Considering how volatile cloud costs can be, that might seem like quite a gamble.
However, if you can learn to predict and manipulate your cloud costs in detail, you can use each expenditure as a lever that directly raises your profits.
In other words, instead of spending blindly and hoping for the best, you can make the most out of that 10-20% chunk of reinvested revenue and actually widen your margins.
The trick is, you’ll need a platform that helps you dig into your granular unit costs to make your infrastructure choices as profitable as possible.
Make 2026 Your Best Year Yet By Refining Your FinOps Strategy
On Jan. 22, CloudZero will be hosting a virtual Capture the Flag event where we’ll help bring your team up to speed on the latest FinOps best practices.
Participants will get to learn all about cost optimization strategies, hone their cost anomaly sleuthing skills, and even earn a certificate they can use to prove their new knowledge.
The Cloud Cost Playbook
The step-by-step guide to cost maturity
