Editorial illustration for AI cuts costs as 35% of teams replace SaaS, 78% plan builds by 2026
AI Slashes Enterprise Costs: 35% Ditch SaaS for Custom Tools
AI cuts costs as 35% of teams replace SaaS, 78% plan builds by 2026
Why are enterprises suddenly eyeing home‑grown software over the cloud services that have dominated their stacks for years? The answer isn’t a single breakthrough; it’s a gradual tightening of budgets paired with the promise that AI can shave dollars off development pipelines. While the tech is impressive, many IT leaders report that cost‑saving calculations now tip the scales toward building rather than buying.
Yet the shift isn’t uniform—large, well‑funded teams still lean on the biggest SaaS platforms for core functions, whereas smaller groups experiment with niche replacements. Governance frameworks, however, lag behind the pace of these experiments, leaving many organizations to navigate compliance and security concerns on their own. This tension between financial pressure and institutional oversight creates a fertile ground for custom tooling to take root, especially in areas like workflow automation and internal admin utilities.
The emerging pattern suggests a broader re‑evaluation of the SaaS‑first mindset, setting the stage for the data that follows.
Retool's report found that 35% of teams have already replaced at least one SaaS tool with a custom build, and 78% plan to build more custom tooling in 2026. Workflow automations and admin tools are among SaaS tools at risk The shift isn't happening uniformly. The top SaaS tools respondents have replaced or considered replacing include workflow automations (35%) and internal admin tools (33%), followed by BI tools (29%) and CRMs (25%).
A purchased workflow automation tool has to serve thousands of customers, so it optimizes for the average case -- and the average case is nobody's actual case. They reflect org structure, compliance requirements, data systems, and business logic unique to that organization. Internal admin tools carry the same problem: they're inherently company-specific.
These categories were always the most awkward fit for off-the-shelf software, and there's now an affordable, accessible alternative (MIT's State of AI in Business reported $2-10 million in savings annually for customer service and document processing tasks).
AI has driven the cost of coding toward zero, making custom builds accessible to far more teams than before. Retool’s 2026 Build vs. Buy Shift Report shows that 35 % of surveyed teams have already swapped at least one SaaS product for a home‑grown solution, and a further 78 % intend to expand their own tooling by 2026.
Workflow automations and admin interfaces appear most vulnerable to replacement. Yet the transition is uneven; some legacy SaaS offerings remain entrenched, and the report notes that enterprise governance frameworks have not yet adjusted to the new reality. Without clear policies, organizations may face compliance or security gaps as they move from vendor‑managed services to internally built code.
The data stops short of explaining how quickly governance will evolve, leaving it uncertain whether the surge in custom builds will be sustainable at scale. For now, the numbers suggest a measurable shift, but the broader implications for risk management remain to be clarified.
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Common Questions Answered
What percentage of teams have already replaced SaaS tools with custom builds?
According to Retool's report, 35% of teams have already replaced at least one SaaS tool with a custom-built solution. This trend is driven by the cost-saving potential of AI-powered development and the increasing accessibility of custom software development.
Which types of SaaS tools are most likely to be replaced by custom builds?
Workflow automations (35%) and internal admin tools (33%) are the most vulnerable SaaS tools to replacement. Following these are business intelligence (BI) tools at 29% and customer relationship management (CRM) systems at 25%.
How many teams plan to build more custom tooling by 2026?
Retool's 2026 Build vs. Buy Shift Report reveals that 78% of surveyed teams plan to expand their own custom tooling by 2026. This significant percentage indicates a growing trend towards in-house software development driven by AI's ability to reduce coding costs.