In early 2026, Monday.com, a prominent work management platform, announced a strategic pivot. Despite reporting a strong fiscal quarter with over $1.23 billion revenue, a 27% year-on-year increase, investors were unimpressed, leading to a 13.3% drop in stock prices. The change involves steering away from small and medium businesses (SMBs) towards larger enterprises. This realignment reflects broader trends within the software as a service (SaaS) industry.
Roy Mann, CEO of Monday.com, explained this shift as a necessary move due to “deteriorating unit economics.” This term encapsulates the challenge that small business customers are costly to acquire, support, and retain, given their relatively lower spend. The model that facilitated growth for many SaaS companies—a freemium approach allowing bottom-up adoption—has seen shifts in its effectiveness. A report by Vendr highlighted this, showing SaaS costs rising significantly, pressuring SMBs to sustain their digital tools.
Adding to the complexity, the post-pandemic era has seen median SaaS revenue growth fall from 30% in 2021 to around 12% recently. The earlier digital adoption surge is tapering off, influencing companies to rethink their customer bases. Now, instead of gaining a high volume of users, the focus is on maximizing revenue from existing clients, particularly large enterprises.
For Monday.com, the number of clients spending more than $500,000 annually surged 74%. Research investments are prioritized at enterprise-level tooling rather than SMB-friendly options. Consequently, predictions for 2026 anticipate revenue to range between $1.45 and $1.46 billion—down from previous projections—indicating limited expectations for an SMB resurgence powered by artificial intelligence.
This shift mirrors movements throughout the SaaS industry. Asana reports that its enterprise customer base, spending $100,000 or more annually, is outpacing its overall growth rate. Zoom has also redirected focus, emphasizing products like its AI Companion suite tailored for enterprise clients. Even Slack adjusted its pricing model, appealing more to large organizations with better integration with Salesforce tools.
Mid-market IT managers and procurement teams face challenges as pricing structures increasingly cater to larger businesses. The coherence of the integrated tech environment used by smaller organizations is disrupted, while pricing becomes prohibitive.
However, the space left by departing giants won’t remain empty. Emerging vendors like ClickUp are vying to serve SMB needs, alongside Notion, Hive, and other newcomers prioritizing affordability and accessibility for smaller entities.
The fundamental draw of SaaS—providing enterprise-level capabilities to all—is seeing a recalibration. To accommodate increasing AI demands, meet investor pressures, and strive for profitability, companies are redefining their market approaches. Yet, if economic structures don’t adapt, this cycle of changing focus may continue. The future landscape of SaaS will depend on balancing profitability with broad accessibility.
