How does economic uncertainty change software buying? In Alium’s verified buyer interviews, it changes how purchases get approved more than what companies run. Among buyers who say in their own words that the economy or government policy shaped a software decision, about half describe a higher bar for anything new or a purchase put on hold. About a quarter describe buying or investing more, and about one in eight cut a tool. Those are shares of decisions buyers tie to the economy, not of all companies; across holds for any reason, buyers name their own company’s projects and leaders far more often than the economy. Budget cuts are a different story, and they are where tools actually get dropped.
What does an economic downturn do to software buying?
It raises the bar first. Many buyers describe a stricter test for anything new rather than a cut to what they run. A national nonprofit facing rising costs in 2022 kept its budget flat and set a rule other buyers echo: “if we were to invest in new technology, it would have to be in the place of something that we have, that we already have had historically budget for.” A consumer marketplace with a lean team said of new technology in 2023, “It just doesn’t feel like the time to be expanding there.” The test was still being applied in October 2026, when a regional retailer’s ecommerce lead said “It’s been very difficult to get a new budget approved for headcount, for software, etc.”
The second response is the hold, and it is usually framed as waiting rather than deciding. An online apparel retailer had a project pushed from one year’s budget to the next, and described the market as “waiting to get through Q1 and see if this alleged recession is actually happening.” In 2025 a coffee company put a product-information system on hold because of “the rising coffee costs that were not anticipated to continue to rise,” and an outdoor apparel brand called its year “a fairly status quo, hold and wait and see, given the uncertainty in the market.”
Why do software purchases get put on hold?
Mostly for reasons inside the company. Among software holds where the buyer gives a reason, about two in three come from the company’s own projects and operations: the purchase waits behind a bigger project, a new leader resets priorities, the tool has not earned its place, or the calendar closes for peak season. A budget cut or a missing approval is counted on its own, not in that two in three, and it is the largest single reason, at about one hold in five. These are the reasons buyers name, and a budget cut is itself decided inside the company and may trace back to the economy. The wider economy or a policy change is named in about one in nine, and no buyer who described a hold named tariffs as the reason.
| Reason for the hold | Share of holds | What buyers describe |
|---|---|---|
| Inside the company: about two in three | ||
| Waiting behind a bigger project ERP, replatform, CRM swap, site rebuild | About one in five |
The team cannot run two large projects at once, so the smaller purchase waits |
| Leadership change, reorg or merger | About one in eight |
A new executive resets priorities, or spending stops until a deal closes |
| The tool has not proved itself | About one in nine |
A pilot underperformed, results were hard to trust, or the product needs to mature |
| Contract still running, or no urgency | Few |
The incumbent is locked in for years, or the current setup is good enough |
| Peak season or code freeze | Few |
Nothing changes from autumn until the new year |
| Team bandwidth | Few |
No one free to implement or run the tool |
| Money and the outside world | ||
| Budget cut or no approval | About one in five |
Budgets cut mid-year, or the purchase waits on finance |
| The economy or a policy change recession, costs, pending legislation | About one in nine |
Recession fears in 2022 and 2023, rising costs and market uncertainty in 2025. Tariffs: none |
The bigger project wins. A specialty retailer put a conversational AI tool on hold in October 2026 because “We are undergoing a major ERP upgrade.” A multi-region consumer brand saw its CRM budget pushed out a year because “the focus was intended to be on the ERP.” Leadership changes do the same. At a financial services firm, “the new CMO has some big ideas and we need to pivot,” and at a company waiting on a merger, “platform changes and incremental spending have all been put on hold until the merger is completed.” The calendar is the most predictable cause. An apparel ecommerce brand paused a search “coming up on peak, so we’re going to resume that in January,” and a department-store chain enters “a freeze period” every fall. A national retailer paused a replacement on learning “that’s a three-year contract and we cannot turn it off immediately.”
Our reading, not a buyer’s: a hold caused by the economy and a hold caused by an ERP upgrade look the same from the outside, which may be one reason the economy gets credit for more delays than buyers give it.
What gets cut when the budget is cut?
When the budget itself shrinks, tools do get dropped, and a pattern shows: point tools and add-ons are cut, while core platforms are more often moved to a cheaper vendor. Among the cuts buyers describe are attribution and analytics tools, testing tools, standalone customer data platforms, digital asset management, SMS volume, agency work and premium support tiers.
The cuts are often not about the product. A national restaurant chain that removed a marketing tool put it plainly: “It wasn’t anything reflective of the product. It was just cost-cutting.” A DTC apparel brand “had to get rid of our CDP this year due to budget cuts” and planned to draw the same customer data from tools it already pays for. A DTC home brand cancelled its testing contract in a cost-cutting round and has no replacement until budget and a hire are approved. A global beauty company describes SMS as the line it trims first, because per-message fees make it “an easy one that we cut.”
Core platforms get swapped instead. A consumer products brand moved its commerce platform to a simpler one: “The goal was to simplify, primarily reduce costs, and also the ability to move faster.” A DTC wellness brand moved its help desk to a vendor with similar features at about half the cost, and others describe CRM, email and social-media tools moved to cheaper options, sometimes giving up a capability on the way. Folding tools into a platform the company already pays for is the other route, covered in the great consolidation; building the tool in-house is a third, covered in build or buy.
The counter-current: some buyers buy their way through it
About a quarter of the buyers who tie a software decision to the economy describe investing more rather than holding back. Some had made the purchase and others were still planning or weighing it; several of the tools were meant to save labor or cost, or to protect sales. A restaurant chain facing lower traffic in 2024 was putting new point-of-sale technology into its restaurants and looking at kiosks, asking “how do we deliver the same experience and reduce labor?” A media company that has been through repeated layoffs says expectations are high for “AI, agentic AI, and tools to subsidize the missing seats that are not going to be filled.” A consumer electronics brand added installment payments as the economy slowed and an online retailer weighed them as shoppers grew hesitant, while another retailer wants a pricing tool to replace its spreadsheets as pricing and promotions became its top problem.
Did tariffs change software buying?
For few companies. In 2025 interviews, tariffs came up often, but only about one in ten of the buyers who raised them tied them to a software decision. Most described tariffs as a problem of prices, sourcing, margins and promotions. Where tariffs did reach a software decision, the effect ran through margins and budgets: less money for tools, vendor costs reviewed, or funding lost for a planned purchase. Those are cuts and cost reviews, not the holds counted above.
The other tariff-linked decisions are of the same kind. An outdoor gear brand facing lower margins has “fewer dollars to invest in marketing and various tools and tech.” A footwear brand vets its vendors on contract pricing every year and in 2025 went through its whole stack to offset “additional tariff that we weren’t expecting.” A multi-brand manufacturer choosing a product-information system expected that “in the tariff environment, some of it will come down to cost,” keeping a lower-priced option on the shortlist for that reason. No buyer who described a software hold named tariffs as the reason, so tariffs are absent from the hold reasons above; the apparel brand’s lost DAM budget shows they could still cost software money.
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Start my checkup →Has the economy’s role in software decisions changed since 2022?
It has faded. In 2022 and 2023, recession fears were the outside reason buyers gave most often for holding or questioning a purchase. Tariffs brought the economy back in 2025. In 2026 interviews, buyers still name the economy as a business challenge, but rarely as the reason for a software decision: among those who raised it on their own, fewer than one in ten tied it to software, against about one in five in earlier years. A consumer products company’s technology chief described the earlier pattern, heavy investment in rebuilt sites one year, then “because of economic conditions, that all slowed to a halt this year.” What has not faded is the budget. Cuts, cheaper replacements and harder approvals keep appearing in 2026, usually without the buyer blaming the wider economy for them.
Does regulation work the same way?
No. Regulation more often adds a purchase or a step than stops one. Buyers describe consent and privacy tools bought to meet state and European privacy laws, customer data kept in-house for data sovereignty, and tools switched in a single market to meet local consent rules. The cost is time: a travel-services company’s rollout stalled because “internally we go through a GDPR private policy review and oh my God, that takes time,” and a global cosmetics group went more than a decade without a heat-mapping tool because of privacy rules on watching shoppers. Holds caused by regulation are uncommon: a privacy review that delays a rollout, or a purchase paused while legislation was pending.
What this means if you are planning a purchase in an uncertain year
The evidence suggests that uncertainty changes the approval more than the need. Buyers make a stronger case for a purchase that replaces an existing line, saves labor or cost, or shows a return within the year than for one that adds a new line, which is the kind that waits. Some of those purchases had been made; others were still awaiting approval or being evaluated. That shows how buyers justify spending under pressure, not that every purchase with a projected return gets funded. And many delays have nothing to do with the economy: they are scheduled behind an ERP upgrade, a replatform, a new leader or a holiday freeze.
Our recommendation, drawn from these accounts rather than a practice buyers describe: before buying in an uncertain year, name what the new tool replaces and what it would cost to keep running for several years, check the calendar for code freezes and larger projects it would collide with, and know which tools in your stack are point tools that a budget cut would reach first. If a core platform is the cost problem, price a cheaper equivalent at the same scope, including migration and the capabilities you would give up, before assuming the cut is a tool you can drop.
What not to read into this
The shares on this page describe the reasons buyers give for their decisions. They do not show that the economy has no effect on software spending: a budget cut a buyer does not attribute may still trace back to the economy, and buyers name the cause they see from their own seat. The tariff share does not mean tariffs had little effect. Most buyers who raised them described damage to prices, sourcing and margins rather than a software decision, a few lost software budget or reviewed vendor costs because of them, and their absence from the hold reasons means only that no buyer gave tariffs as the reason for a hold. And the change between earlier years and 2026 describes what buyers said in their interviews, not a measured change in spending.
Common questions
Do companies stop buying software in a recession?
Mostly they slow down rather than stop. In Alium's interviews, among buyers who say the economy or government policy shaped a software decision, about half describe a higher bar for new purchases or a purchase put on hold. About a quarter describe buying or investing more, some of it planned rather than done, and about one in eight cut a tool. These are shares of economy-linked decisions, not of all companies. A common rule is that any new tool has to replace something already in the budget.
Why do software purchases get put on hold?
Usually for reasons inside the company. In Alium's interviews about two in three software holds with a stated reason come from inside: the purchase waits behind a bigger project such as an ERP upgrade or a replatform, a leadership change or merger resets priorities, the tool has not proved itself, or a peak-season code freeze stops all changes. A budget cut or a missing approval is counted separately from those inside reasons and is the largest single reason, at about one hold in five; the outside economy or a policy change accounts for about one in nine.
Did tariffs change how companies buy software?
For few companies. Among buyers in Alium's 2025 interviews who raised tariffs, about one in ten tied them to a software decision. Most described tariffs as a pricing, sourcing and margin problem. Where tariffs did reach software, the effect was a thinner budget for tools, a planned purchase dropped, a cheaper vendor favored or vendor pricing reviewed: cuts and cost reviews rather than holds. No buyer who described putting a software purchase on hold named tariffs as the reason.
What software gets cut first when budgets are cut?
In Alium's interviews, the tools buyers drop without a replacement are mostly point tools and add-ons: attribution and analytics tools, testing tools, standalone customer data platforms, digital asset management, SMS volume, agency work and premium support tiers. Core platforms such as the email platform, the CRM and the commerce platform are rarely dropped; when cost is the reason, buyers more often move them to a cheaper vendor.
How does privacy regulation affect software buying?
Differently from the economy. In Alium's interviews, regulation more often adds a purchase or a step than stops one: consent and privacy tools bought to meet state and European privacy laws, data kept in-house for data sovereignty, and privacy reviews that add months to a rollout. It occasionally delays a rollout or puts a purchase on hold, for example while legislation is pending.
Related reading: the great consolidation, on folding tools into the platforms companies already pay for; build or buy?, on when companies replace vendors with their own software; do marketing tools follow people to their next company?; and how software buyers find vendors.
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