The Great Unbundling

Net Revenue Retention (NRR) in SaaS has declined from 110.5% in early 2023 to 107.1% by 2025. Nearly six in ten SaaS companies now report lower NRR than they did two years ago. For boards valuing companies on NRR strength and revenue leaders who built go-to-market strategies around “land and expand,” this erosion represents a fundamental threat to the growth math underpinning SaaS valuations.

CEOs recognize the urgency. In SBI’s latest executive survey, 76% rank “increase customer retention / decrease churn” as a top value creation lever. “Realigning resources to grow revenue from the base” ranks as the top strategic emphasis for 2026. Growth from the base has moved from “nice to have” to “non-negotiable” just as it’s getting harder to achieve.

What CEOs are witnessing is what we call “the great unbundling”: the separation of value delivery from seat consumption. For the 80% of SaaS companies that still rely on seats for pricing, the great unbundling represents a threat that will continue to erode NRR and put growth targets at risk. The instinct is to respond with product enhancements or AI capabilities. But the root cause runs deeper. Customers are fundamentally changing how they consume value, breaking the economics that made SaaS predictable for over a decade.