Updated: July 2026 | 6 min read

Executive Summary

Comparing SaaS to on-premise software in 2026 requires care, because most public cloud research covers the full cloud stack (IaaS, PaaS and SaaS together) rather than SaaS alone. This article draws on the Flexera 2025 State of the Cloud Report, which surveyed more than 750 technical professionals and executives worldwide. Where the report covers broad cloud rather than SaaS-specifically, that scope is stated explicitly. No broad-cloud figure is presented as a SaaS-only number.

Quick Overview

  • The Flexera 2025 State of the Cloud Report surveyed more than 750 technical professionals and executives worldwide involved in cloud use (source: Flexera 2025 State of the Cloud press release).
  • 84% of respondents said managing cloud spend is the top cloud challenge for organizations (source: same).
  • 33% of organizations spend more than $12 million annually on the public cloud alone (broad cloud, not SaaS-only) (source: same).
  • Cloud spend is expected to increase by 28% in the coming year per Flexera respondents (source: same).
  • 69% of respondents are involved in managing the use and/or cost of SaaS applications (source: same).
  • 21% of cloud workloads have been repatriated to non-cloud environments, though net cloud growth continues (source: same).

Cloud Spend and Cost Management

The Flexera 2025 State of the Cloud Report found that 84% of respondents believe managing cloud spend is the top cloud challenge (source: Flexera press release). Nearly one-third (33%) of organizations spend more than $12 million annually on the public cloud alone, and cloud spend is expected to increase by 28% in the coming year. These figures cover the full public cloud stack (IaaS, PaaS and SaaS), not SaaS alone. Organizations are increasingly turning to FinOps teams (59%) and managed service providers (60%) to control spending. The number of respondents that use or plan to use a FinOps team increased by eight percentage points year over year. We do not report a single SaaS-only spend total because Flexera does not break out SaaS as a standalone dollar figure in the press release.

SaaS Management and Cloud Software Decisions

The Flexera report found that 79% of respondents responsible for cloud use and costs are now involved in cloud software decisions, and 69% are involved in managing the use and/or cost of SaaS applications (source: Flexera press release). This indicates that SaaS management is increasingly falling under the same FinOps and cloud-management umbrella as IaaS and PaaS. The report also found that 64% manage the use and/or costs of cloud licenses (software running in the cloud). These figures suggest convergence between cloud-infrastructure management and SaaS license management, but they do not represent a SaaS-versus-on-premise market share split. The report also noted that 87% of respondents indicated cost savings is the number-one metric for assessing progress against cloud goals, for the sixth year in a row, a 22-point increase from 2024.

Workload Migration and Repatriation

The Flexera report found that 21% of cloud workloads have been repatriated to non-cloud environments (own data centers or co-located/hosted environments), though ongoing migration and net-new cloud workloads outstrip these exits, resulting in continued cloud growth (source: Flexera press release). Among public cloud providers, AWS maintains a lead among SMBs (53% of SMBs use AWS versus 29% for Azure), while Google Cloud Platform holds the third spot with 46% of all organizations running workloads on it. These are broad-cloud adoption figures, not SaaS-specific. The report also found that generative AI public cloud services use is booming, with 72% of organizations reportedly using the technology either extensively or sparingly, compared to 47% in 2024. Data warehouse services adoption reached 76%, often leveraged to feed AI models. Over half (57%) of respondents reported they have or plan to have a defined sustainability initiative in place within twelve months.

Key Takeaways

  • Flexera 2025: 84% of respondents cite cloud spend as the top cloud challenge (source: Flexera press release).
  • Flexera: 33% spend more than $12M annually on public cloud; spend expected to grow 28% (broad cloud, not SaaS-only) (source: same).
  • Flexera: 69% involved in managing SaaS application use/cost; 79% in cloud software decisions (source: same).
  • Flexera: 21% of cloud workloads repatriated, but net cloud growth continues; GenAI use up from 47% to 72% (source: same).
  • Flexera: 87% cite cost savings as the top cloud metric for the sixth year running, up 22 points from 2024 (source: same).

Methodology and Limitations

  • Flexera figures cover the full cloud stack (IaaS, PaaS, SaaS) unless explicitly labelled as SaaS-specific; broad-cloud numbers are not presented as SaaS-only.
  • The Flexera survey sample is 750+ technical professionals and executives; it is a sample survey, not a census.
  • No Gartner or IDC market-size estimate is reproduced without a named, dated, publicly accessible report page.
  • No TCO comparison percentage is reproduced without a named, dated source.

Sources

  1. Flexera: 2025 State of the Cloud press release (2025).
  2. GlobeNewswire: Flexera cloud spend release mirror (2025).
  3. Flexera: 2025 Gartner Magic Quadrant for SaaS Management Platforms (2025).