In Feb 2026, Monday.com delivered what looked, on paper, like a strong quarter. Full-year revenue had crossed $1.23 billion, up 27% year-on-year. Earnings per share beat analyst estimates by 73%. Gross margins held firm at 90%.
Investors responded by wiping 13.3% off the company’s stock price.
Buried inside the earnings commentary was a strategic shift. The Israeli startup, which built its reputation through the ‘freemium’ model, is making a deliberate retreat from the self-serve market and shifting its focus towards big business.
“We’re leaving the smaller [customers] and focusing on the better ones with higher ROI, bigger retention.” – Roy Mann, CEO, Monday.com.
The reason cited was “deteriorating unit economics” – corporate shorthand for a simple and uncomfortable truth. Small business customers cost too much to acquire, support, and retain relative to what they spend. The numbers no longer work.
It’s a significant moment – but not an isolated one.
What is Self-Serve SaaS?
For a decade, the self-serve SaaS model — free tiers, bottom-up adoption, and expansion within organisations — powered extraordinary growth. It also created a generation of businesses that came to depend on accessible, affordable tools to compete with companies ten times their size.
Vendr’s 2025 SaaS Trends Report found that SaaS pricing rose 11.4% year-on-year in 2025, against general inflation of 2.7%, running roughly five times the standard rate. When hidden mechanisms are factored in – AI add-ons, feature tier consolidation, usage caps – the effective price increase reaches 20-30% annually. The average organisation now spends $7,900 per employee per year on SaaS, a 27% increase over the past 2 years.
Simultaneously, the growth that once justified those pricing models has evaporated. Median SaaS revenue growth has compressed from approximately 30% in 2021 to around 12% today, as the pandemic-era wave of digital adoption recedes (which is the polite, spreadsheet-friendly way to say the easy years are over).
Vendors can no longer grow by adding customers at scale. Instead, they are growing by charging their existing clients more and focusing business development efforts on customers worth charging.
Why is Monday.com Pivoting Towards Big Business?
Monday.com Customers spending more than $500,000 annually grew 74% year-on-year. Those spending more than $50,000 now account for 41% of total revenue. Research and development investment climbed to 20% of Q4 revenue, with capital flowing toward AI features and enterprise tooling that cannot be monetised at SMB price points.
The company’s cautious fiscal 2026 guidance – revenue of $1.45 to $1.46 billion, down from earlier projections – signals that no AI-driven SMB renaissance is on the horizon.
The investment is real. The returns, for now, are reserved for the enterprise (behind a slightly thicker paywall).
Monday.com did not abandon small businesses because it wanted to. It did so because the unit economics gave it no choice.
Why SaaS Companies Are Prioritising Enterprise Customers
What makes this more than a single company story is how consistently the same logic is playing out elsewhere.
Asana’s Q4 FY2026 results showed enterprise customers – those spending $100,000 or more annually – growing at 13% year-on-year, faster than the company’s overall revenue growth of 9%. Its flagship AI Studio product, validated by enterprise case studies citing hundreds of thousands of dollars in annual savings, is priced for and built around large organisations.
Zoom, once synonymous with accessible video collaboration for teams of any size, has systematically pivoted its product investment toward Zoom Phone, Zoom Contact Center, and its AI Companion suite – all enterprise plays. Free and SMB tier users are not where the roadmap is pointing.
Slack raised prices 20% – from $12.50 to $15 per user per month – while positioning deeper Salesforce integration as its primary value driver, a proposition built for enterprise buyers rather than independent teams.
Taken together, these moves point to a broader industry realignment: collaboration platforms are no longer optimising for ubiquity – they’re optimising for enterprise value, where AI-driven outcomes can justify higher spend and deeper integration.
Are SMBs Being Left Behind by SaaS Vendors?
For IT managers and procurement teams in the mid-market, this trend is already emerging in renewal conversations: fewer discounts, thinner free tiers, and pricing structures that push smaller organisations toward plans built for companies twice their size. It’s like being handed a suit tailored for someone else and being charged extra for the privilege.
Work management tools do not sit in isolation. They integrate with UC platforms – Microsoft Teams, Zoom, RingCentral, Slack – and when a vendor in the stack repositions, it affects the coherence and total cost of the broader environment.
The SaaSpocalypse (what an unfortunate name…) is a story about infrastructure as much as it is about finance.
Who’s Stepping Up for Small Businesses?
The gap being vacated will not stay empty. ClickUp has been explicit about targeting the customers Monday.com is deprioritising. Notion, Hive, and a wave of newer entrants are positioning directly on SMB accessibility. Channel partners who move quickly have a real commercial opportunity to fill the advisory void.
The SaaS model was built on a promise: enterprise-grade software, accessible to everyone. For a decade, that promise drove adoption, loyalty, and extraordinary valuations.
The mandate to fund AI, satisfy investors, and reach profitability has changed the calculation. The next generation of vendors will make the same promise of openness and accessibility.
If the underlying economics don’t change, the outcome won’t either.
FAQs
Why is Monday.com moving away from SMB customers?
Monday.com is shifting toward enterprise clients due to deteriorating unit economics – SMBs are more costly to acquire and retain relative to their spend.
What is the self-serve SaaS model?
The self-serve SaaS model allows users to adopt software through free or low-cost tiers and expand usage organically within their organisation.
Is SaaS becoming more expensive?
Yes. SaaS pricing is rising significantly, with effective increases of 20–30% annually when factoring in AI features, add-ons, and usage-based pricing.
Why are SaaS companies focusing on enterprise customers?
Enterprise customers offer higher revenue, better retention, and stronger ROI – especially for AI-driven products that require larger budgets.
How does this trend affect SMBs?
SMBs are facing higher costs, fewer free features, and pricing tiers designed for larger organisations, making tools less accessible.
Which SaaS platforms still target SMBs?
Vendors like ClickUp, Notion, and Hive continue to focus on SMB-friendly pricing and accessibility, alongside newer market entrants.
Is this shift happening across the SaaS industry?
Yes. Companies like Asana, Zoom, and Slack are also prioritising enterprise customers, signalling a broader industry-wide trend.
Will SaaS become inaccessible to small businesses?
Not entirely. While major vendors are moving upmarket, new SaaS providers are likely to emerge to serve SMB needs.
