The real cost of per-seat SaaS pricing as you grow

Per-seat pricing means you pay for every named user of a software product, every month or every year. For a small team that is simple and predictable. As the business grows, the bill grows with each hire, each new tool and each price rise at renewal, and in a typical stack of four or five tools that adds up faster than most owners expect.

This article explains how per-seat pricing works, which costs the price list does not show, and works through an example of a manufacturing business growing from 15 to 40 people. It ends with a simple way to calculate the real cost for your own business.

How per-seat pricing works

Most business software sold as a subscription charges per user, often called a seat or a licence. The basics are the same almost everywhere:

• Named users: each person with a login counts, whether they use the tool daily or occasionally.
• Commitment: many plans are billed annually, and seats you no longer need often cannot be removed until the next renewal.
• Tiers: features are spread across plans. Needing one feature from a higher tier can raise the price for every user.
• Minimums: some plans require a minimum number of seats.
• Renewal: the price you pay is the price at renewal, not the price you signed up for.

None of this is unfair in itself. It simply means your software costs are tied to your headcount, not to the value the tools deliver.

A worked example: from 15 to 40 people

Take a metal fabrication business with an office, a workshop and a fitting team. It uses four per-seat tools. The prices below are illustrative assumptions, not quotes from any vendor:

Tool	Assumed price per user per month
CRM	€40
Office suite and email	€12
Project and time tracking	€10
Customer service desk	€25
Total per user	€87

The business grows over three years, and the vendors raise prices by an assumed 5 % a year:

Year	Users	Per year at today’s prices	With 5 % yearly increases
1	15	€15,660	€15,660
2	25	€26,100	€27,405
3	40	€41,760	€46,040
Total		€83,520	€89,105

The licence bill nearly triples while the team grows by a factor of 2.7. Nothing about the tools has changed. They simply cost more because more people use them.

Price rises at renewal are not hypothetical. Microsoft, for example, announced a global price update for its commercial Microsoft 365 suites that applies to new and renewing customers from 1 July 2026.

Costs the price list does not show

• Unused seats. People leave, change roles or only log in once a month. Their seats are often paid until someone notices or the contract allows a reduction.
• Tier jumps. One team needs a feature from the next plan up, and the whole company moves tier.
• Add-ons per user. AI assistants, extra storage or advanced reporting are frequently sold per user on top of the base plan. Microsoft lists Copilot Business, for example, at a per-user monthly price.
• Connecting the tools. Four tools mean four databases. Customer data, orders and hours have to be synchronised or copied by hand, and integrations often come with their own fees.
• The people you leave out. This is the most expensive cost and the hardest to see. When every login costs money, the workshop, the stores and the fitters often get no access. Their hours, stock movements and site notes stay on paper, and the office types them up later.

Who needs a login in a manufacturing business

In an office-only business, per-seat pricing roughly tracks the people who create value with the tool. In a business with a workshop and field staff it does not. A welder who records time on a job, a storekeeper who books out material or a fitter who uploads photos from site needs a few minutes in the system each day, not a full seat’s worth of features.

If those people are left out to save licences, the data that matters most for costing a job, actual hours and actual material, never reaches the system.

Alternatives to per-seat pricing

Model	How you pay	Fits when
Per seat	per named user	small, stable teams with few tools
Flat rate	per company or per site	many occasional users
Usage-based	per transaction, storage or volume	usage varies a lot over the year
Open source	no licence fees; you pay for implementation, hosting and support	you want everyone in one system and plan to grow

Open-source business software such as ERPNext and the other Frappe applications has no per-user licence fees. The costs move elsewhere: setting the system up, hosting it and keeping it updated. Those costs do not rise each time you add a user, which makes open source more attractive the more people need access. What open-source ERP covers in a small business is explained in our article on open source ERP for small business.

At openBlueprint we build systems on these applications without per-user licence fees, so the workshop and field teams can have their own access from day one.

How to calculate your own per-seat costs

1. List every tool you pay for per user, including add-ons.
2. Note the price per user from your latest invoice, not the pricing page.
3. Count the users per tool, and the people who should have access but do not.
4. Multiply and add up for today’s headcount.
5. Repeat for the headcount you expect in two or three years, with an allowance for price rises at renewal.

Our licence cost calculator (in German) does this for a typical tool stack in a few seconds. How further areas such as quotes, stock and invoicing build on the same database is shown on our home page.