35% of companies have already replaced their SaaS with their own software (and the other 78% are on the way)

Retool's 2026 Build vs. Buy report, covering 817 companies, found that 35% have already replaced at least one SaaS tool with custom software and 78% plan to build more this year. The trigger: with AI, what used to take months is now built in days. Meanwhile, the 'SaaSpocalypse' wiped nearly $2 trillion in sector market cap in early 2026 and every renewal rises ~9%. For a 50-user company, the SaaS stack costs $264,000 in year one versus $78,000 for a custom AI platform. The question is no longer whether to build, but when.

The 'buy or build' decision flipped in 2026

For twenty years the default answer was 'buy the SaaS'. In 2026 it flipped. Retool's 2026 Build vs. Buy report —covering 817 companies, from startups to the Fortune 500— found that 35% have already replaced at least one SaaS tool with custom-built software, and 78% plan to build more this year (Retool, 2026). The reason is simple: with language models and AI-assisted development, what used to take months is now built in days. The market already priced it in: the so-called 'SaaSpocalypse' of early 2026 wiped nearly $2 trillion of software-sector market cap in a matter of weeks, triggered by autonomous agents hollowing out the per-seat licensing model (MarketMinute, 2026).

Why now: the seat stopped making sense

The model that propped up SaaS for two decades —pay per seat— breaks when a single user with AI agents does the work of five. Gartner projects that seat-based revenue share will fall from 21% to 15%, and that at least 40% of enterprise SaaS spend will shift to usage-, agent-, or outcome-based models by 2030 (Gartner, 2026). OutSystems' 2026 State of AI Development report found that 96% of organizations already use AI agents and that these resolve over 80% of internal service requests, which would cut service-management licensing costs by up to 50% (OutSystems, 2026). When the software you buy bills per seat but your work is no longer measured in seats, you're paying for a unit that stopped existing.

The renewal trap: you pay more for the same

Meanwhile, the software you already have goes up in price every year. Gartner estimates that roughly 9% of every IT budget is consumed solely by price hikes on existing services, with average increases of 8.9% at renewal (Gartner, 2026). And the conversation changed: every renewal in 2026 turns on 'what AI value did you add'; if you don't have a clear answer, you get cut or renegotiated (SaaStr, 2026). Translation: the vendor charges you more for AI features you don't control, on a base of seats you no longer use. Worldwide software spend rose to $1.44 trillion in 2026 (+15.1%), and much of that growth buys no new capacity: it pays for the same software, pricier (Gartner, 2026).

The case for buying SaaS (and where it breaks)

Buying SaaS is still the right call in many cases, and that's worth saying. For generic, non-differentiating functions —email, payroll, standard accounting— building from scratch is wasting money: SaaS gives you maintenance, security, compliance and updates without hiring a team. SaaS also wins when your volume is low, when you need something running tomorrow, or when the process changes so fast you don't want to maintain it yourself. Where the argument breaks is on your core processes, the ones that set you apart from competitors: there, renting a generic mold in perpetuity —and paying more every year for seats that no longer reflect your work— is giving away your advantage. The rule of thumb: buy what makes you the same as everyone, build what makes you different.

The alternative: build once, scale with no toll

Building custom no longer means 'months of development and a huge team'. It means a platform that unifies your CRM, your support and your analytics, wired directly to the OpenAI, Anthropic or Google APIs, where you pay the real token cost —cents, not per-seat surcharges or per-action overages. As the comparison shows, a 50-user company goes from $264,000 to $78,000 in year one, a saving close to 70%, but the decisive part is the profile: the software is paid once and scales without your bill rising every time you grow or every time renewal comes around. 35% of companies have already crossed that line and 78% will cross it this year. If you don't want your competition building its advantage before you, request a custom AI software quote and stop renting what you can already own.