As software companies plan for 2026, one thing is clear. Pricing and packaging are becoming some of the most decisive levers for profitable growth. In our latest executive survey of North American and European software leaders, 63 percent cited revenue growth as their top organizational objective, with another 13 percent focused primarily on margin expansion.
At the same time, leaders are facing mounting challenges that threaten both goals. AI commercialization uncertainty, product portfolio sprawl, and persistent churn pressure are pushing pricing and packaging out of the back office and into the center of strategic decision making.
Below are the five macro trends shaping software monetization in 2026, grounded in survey data and what we are seeing across the market.
Table of Contents
Market Expansion Requires Sharper Segmentation and Enterprise Ready Packaging
As software companies pursue growth, many are expanding into new customer segments, most commonly the mid market and enterprise. In the survey, 39 percent of respondents pursuing expansion said they plan to broaden their product offerings, while 26 percent are targeting entirely new customer segments.
Moving upmarket introduces real complexity. Leaders point to challenges such as identifying high value segments, redesigning offers to meet enterprise requirements, and justifying materially higher price points.
Many vendors attempt to stretch an SMB pricing model into the enterprise and discover too late that they are underpricing, overserving, or confusing buyers. This is driving pressure from investors and boards to adopt segment specific value metrics, clearer enterprise tiers, and ROI anchored pricing narratives.
2026 prediction:
Companies that repackage for enterprise with differentiated capabilities, service levels, and usage metrics will see the strongest lift in win rates and average deal size.
The On Prem to SaaS Migration Wave Is Still Creating Revenue Leakage
Despite years of cloud transformation, a meaningful share of software companies are still navigating the shift from on prem to SaaS. For many, the biggest risks are revenue cannibalization, migration discounts, and churn during the transition.
Survey respondents highlighted several challenges, including revenue leakage from poorly defined migration paths, customer resistance to subscription pricing, and difficulty pricing recurring models for long term profitability.
Notably, 37 percent of surveyed companies report net revenue retention below 100 percent, suggesting that leakage remains a widespread issue rather than an edge case.
The takeaway for software leaders is clear. SaaS transformation is a pricing transformation, not merely a technical one. Successful migrations include contraction minimizing guardrails, value based upgrade incentives, and intentional pricing architectures that encourage customers to migrate without discounting away long term value.
Portfolio and Packaging Unification Is Becoming a Top Priority for 2026
One of the most underappreciated trends in software is the shift from product silos to integrated platforms. While customers increasingly expect unified solutions, internal complexity and legacy pricing models often stand in the way.
Leaders cite unclear value metrics, inconsistent pricing levels, and customer confusion as common challenges. These issues create knock on effects such as cross sell friction, missed expansion opportunities, and heavy reliance on discounting. Thirty two percent of companies report using volume based discounts, while 29 percent rely on multiyear terms to close deals.
Unification is not just an operational clean up. It is a monetization accelerant. Companies that bring standalone modules under a coherent packaging strategy often unlock higher net revenue retention, reduce discounting, and improve sales efficiency.
This is particularly urgent given that 28 percent of respondents listed upsell and cross sell as a top monetization initiative for 2026.
AI Monetization Is Moving From Hype to Hard Choices
AI remains one of the most powerful forces reshaping software economics. Nearly two thirds of surveyed companies are actively developing or piloting AI capabilities, yet most are struggling to monetize them effectively.
Key realities from the survey include:
36 percent bundle AI into existing tiers with no price uplift
31 percent are still evaluating pricing structures or lack cost tracking
Only 14 percent offer AI as a premium or usage based add on
49 percent have only partial visibility into AI costs versus value delivered
Sales readiness remains a major constraint. Only 9 percent of respondents feel very comfortable selling AI driven features. The most cited barriers are unclear ROI at 37 percent and customer misunderstanding at 22 percent.
This paints a picture of a market building AI faster than it is monetizing AI. The risk heading into 2026 is that companies embed high cost AI functionality into baseline offerings without a clear value narrative or pricing path, eroding margins in the process.
Winning teams are taking a different approach. They are introducing modular or usage based AI add ons, tracking AI cost to value with greater precision, training sales teams on outcome based narratives, and anchoring AI pricing to specific workflows rather than generic intelligence.
Churn Pressure Is Real and Pricing Can Either Exacerbate or Alleviate It
Churn remains one of the most significant drags on software growth. When asked about the main causes of churn, respondents cited budget reductions at 31 percent, competitive switching at 25 percent, and pricing or value concerns at 22 percent.
Only 11 percent of companies report net revenue retention above 110 percent, a level typically associated with strong product market fit and pricing discipline.
Pricing directly influences churn through transparent value metrics, right sized packaging, flexible commercial terms, and disciplined but fair annual price increases. Yet today, 41 percent of companies implement annual uplifts of just 1 to 3 percent, well below what most mission critical software markets can bear.
Companies breaking out of this pattern in 2026 are building stronger renewal playbooks, better justification content, and clearer ROI storytelling to support pricing actions.
What Software Leaders Should Do Now
Given these dynamics, three priorities stand out as non negotiable heading into 2026.
Invest in pricing infrastructure and capability
While 30 percent of companies are investing in pricing data and systems and 26 percent in AI or machine learning for pricing, only 14 percent invest meaningfully in training. Modern pricing organizations require analytics, tooling, and capability building together.
Redesign packaging with a platform mindset
Whether unifying portfolios or launching new AI modules, companies must move toward modular, scalable packaging that supports upsell, expansion, and new segment entry.
Treat AI monetization as a strategic priority
Leaders who establish structured approaches to AI packaging, cost tracking, and sales enablement will build meaningful monetization advantage as the market matures.
Conclusion
Software companies are entering 2026 with ambitious growth goals and increasingly complex pricing realities. The winners will be those who treat pricing and packaging not as supporting functions, but as core strategic disciplines that directly drive revenue, margin, and customer lifetime value.
