SaaS companies' newest rivals are their own customers
Companies are increasingly using generative AI to build internal software tools, bypassing traditional enterprise vendors like Salesforce and SAP. McKinsey data suggests that about a third of organizations have opted to build their own solutions rather than purchase existing software.
Why it matters
This shift threatens the revenue models of major enterprise software providers and signals a broader trend toward internal automation and DIY corporate infrastructure.
Last year, employees at Spotify built HR Bot, a program that serves as a personalized HR help desk. Gary Hershorn/Getty Images Companies like Spotify and Twilio are relying less on software vendors and more on homegrown tools. Roughly a third of organizations have already skipped a software purchase because of AI. Building your own tools can slash costs — but you're also on the hook if they break. Companies big and small are embracing a DIY approach to software. With the help of AI, they're building tools that they could otherwise purchase from large enterprise software vendors like Workday , SAP, and Salesforce. West Monroe, a Chicago-based consultancy, wanted a program that could check payroll for errors and another that could surface useful insights for managers about its roughly 2,000 employees.
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