What Middle-Market Leaders Need to Prepare For
The technology industry and SaaS industry are entering 2026 at a time when innovation is accelerating and expectations are rising across the United States. Companies are modernizing their systems, rethinking their business models, and managing tighter regulatory scrutiny. Many middle-market organizations in technology and SaaS are also navigating how to adopt artificial intelligence (AI), optimize cloud environments, and strengthen data security without overwhelming teams or budgets.
The most successful companies are focusing on targeted improvements that create long-term value and align with the broader 2026 business outlook. The following business trends reflect what we see across the sector and where leaders should focus on the year ahead.
1. AI Is Moving from Experimentation to Everyday Productivity
AI has shifted from exploration to daily use for many technology and SaaS companies. Teams now rely on AI-driven tools to streamline reporting, analyze customer behavior, and support customer service operations. Even smaller organizations and small businesses are adopting artificial intelligence AI to automate tasks and improve forecasting.
What We’re Seeing
- Generative AI adoption has surged, with 65% of organizations now using GenAI regularly—nearly double adoption levels from less than a year earlier. (McKinsey)
- Software teams are seeing measurable gains, with over 60% of organizations reporting at least a 25% productivity improvement from AI tools. (McKinsey)
- AI coding assistants speed development, enabling developers to complete coding tasks 20–50% faster across generation, refactoring, and documentation. (Forte Group)
What This Means for You
Focus on targeted use cases that reduce manual work or improve reliability. Many organizations start with cloud-based software, finance automation, CRM enhancements, or customer relationship management (CRM) insights before expanding to larger transformations.
LBMC Insight
“No leap in AI technology will yield accurate predictions if the underlying data does not exist. Practical, well-governed AI solutions create real business value.” — Jon Hilton, LBMC Consulting & BI
2. Cybersecurity Risks Continue to Expand as Threat Actors Use AI
Cyber risk is rising across the technology industry as attackers use automation and AI to scale threats. Companies now face new requirements for compliance, encryption, vendor oversight, and data security.
What We’re Seeing
- The global cybersecurity workforce gap stands at roughly 4.8 million professionals, up 19% year over year. (ISC2)
- 67% of organizations report cybersecurity understaffing, with the largest gaps in cloud security and AI-driven threat detection. (Fortinet)
- Cloud and SaaS security remain the biggest gaps, with 70% of organizations reporting insufficient expertise to protect modern hybrid environments. (ISC2)
What This Means for You
Traditional security approaches are no longer enough. Mid-market organizations need multi-layered monitoring, identity governance, third-party risk management, and documented response plans. Strong cybersecurity also helps SaaS companies win deals with enterprise customers who require validated controls.
LBMC Insight
“Clients tell us that investing in cybersecurity continues to build trust and strengthen deal-level confidence.” — Stewart Fey, LBMC Cybersecurity
3. Cloud Strategy Is Shifting Toward Cost Control and Sustainability
Cloud adoption is nearly universal across technology and SaaS, but optimization is now the focus. Companies are refining architectures to manage spending more cost effectively, improve performance, and meet sustainability requirements.
What We’re Seeing
- Public cloud spending continues to rise. Worldwide end‑user spending on public cloud services is forecast to reach $723.4 billion in 2025, up from $595.7 billion in 2024 (Origen).
- Cloud is taking a larger share of IT spend, with roughly half of enterprise IT spending in key categories such as application software, infrastructure software, business process services, and system infrastructure projected to shift to public cloud by 2025, up from 41% in 2022. (CloudZero)
- Cost optimization now leads cloud strategy, with enterprises ranking cloud cost savings ahead of migrating additional workloads as their top cloud priority. (Coresite)
What This Means for You
Modernization does not require a full rebuild. Cost optimization, governance improvements, vendor reviews, and access controls can meaningfully improve performance and long-term scalability.
LBMC Insight
“Most companies cannot outspend major hosting centers. Cloud platforms now provide some of the most advanced security and scalability available.” — Bryan Wilton, LBMC Technology Solutions
4. SaaS Models Are Evolving as Buyers Demand Flexibility and Industry Fit
The software as a service landscape is maturing quickly. Clients want SaaS solutions that integrate seamlessly, support specific industries, and deliver clear ROI. SaaS companies are responding with more personalized onboarding, stronger integrations, and expanded features in SaaS platforms.
What We’re Seeing
- Vertical SaaS is scaling quickly, with the global market projected to reach $157.4B by 2025, growing at roughly 24% annually, driven by demand in regulated industries like healthcare and financial services. (Cornerstone Search)
- Vertical SaaS is outpacing horizontal platforms, with adoption growing about 31% year over year, compared with roughly 14% growth for horizontal SaaS solutions. (UserGuiding)
- Usage-based pricing continues to expand, as more SaaS vendors adopt consumption-based or hybrid models rather than relying solely on seat-based licensing. (UserGuiding)
What This Means for You
Revisit pricing, onboarding, integration of roadmaps, and customer support. Buyers want tools that deliver value quickly and work with existing systems without disruption.
LBMC Insight
“AI and IoT capabilities allow organizations to extend product lifecycles and drive smarter decision-making.” — Aaron Hale, LBMC Audit
5. Workforce Skills and Capacity Continue to Shape Technology Strategy
Talent remains a major challenge across the technology industry and SaaS industry. Companies need skills in cloud architecture, cybersecurity, analytics, CRM systems, and modern development practices.
What We’re Seeing
- Developer demand continues to rise, with U.S. software developer employment projected to grow 13% from 2023 to 2034, driven by cloud, mobile, and AI applications. (BLS)
- Cybersecurity talent shortages remain severe, with more than 700,000 open roles in the U.S. and a 4.8 million–person global workforce gap tied to cloud, AI threats, and compliance needs. (ISC2)
- Upskilling supports retention, with 94% of employees saying they would stay longer at companies that invest in learning and development. (LinkedIn Learning Workplace)
What This Means for You
Redesign roles to remove repetitive tasks. Improve onboarding, invest in training, and use automation to support teams. Strong workforce planning improves retention and stability.
LBMC Insight
“We help technology firms align HR strategy with business goals, improve analytics, and strengthen compliance. These steps directly support retention and scalability.” — LBMC Employment Partners
6. Data Foundations, Governance, and Compliance Are Becoming Non-Negotiable
Many technology and SaaS organizations adopted AI, analytics, and cloud platforms before modernizing their data foundations. Weak data quality and governance now limit the effectiveness of automation, increase compliance risk, and slow value realization.
What We’re Seeing
- Poor data quality carries significant financial and compliance risk, costing organizations an average of $12.9 million annually through inefficiency, errors, and regulatory exposure. (Cambridgespark; ESRI)
- AI initiatives remain data‑heavy: surveys show data scientists spend roughly 60% of their time cleaning and organizing data and nearly 80% on data preparation overall, underscoring the need for strong data foundations. (Forbes)
- Governance gaps are blocking AI and SaaS value: a global data integrity survey finds that 62% of organizations cite lack of data governance as the primary data challenge inhibiting their AI initiatives, making robust documentation of data flows essential for compliance and customer trust. (PR Newswire)
What This Means for You
Reliable data is now a prerequisite for AI adoption, regulatory compliance, and customer confidence. Strengthening data quality, governance, and integration improves forecasting, supports SaaS scalability, and reduces audit and security risk.
LBMC Insight
“Organizations that invest in data governance early create a foundation that supports AI, compliance, and long-term growth.” — LBMC Consulting & BI
Looking Ahead: Priorities for Technology and SaaS Leaders in 2026
To stay competitive, organizations should focus on:
- Strengthening cybersecurity and identity controls
- Evaluating AI opportunities with proper governance
- Optimizing cloud performance and cost
- Updating software developed and SaaS solutions to meet industry needs
- Modernizing data infrastructure
- Building workforce capability
These steps support resilience, increase operational visibility, and align with the broader 2026 business outlook.
LBMC supports organizations across the technology and SaaS industries with advisory, audit, tax, and cybersecurity services that enhance performance and guide long-term decision-making.