Retool’s 2026 Build Vs. Buy Report Reveals 35% of Enterprises Have Already Replaced SaaS With Custom Software

Why It Matters

Enterprises are turning to low‑code app‑generation platforms to accelerate innovation and cut SaaS spend, forcing traditional vendors to rethink their value propositions and governance models.

Key Takeaways

• 35% enterprises replaced SaaS with custom tools.
• 78% plan to build more internal tools in 2026.
• 60% built software outside IT oversight last year.
• AI directs 75% of builders, yet metrics remain undefined.
• Half of custom builds save six+ hours weekly.

Pulse Analysis

The rapid maturation of AI‑assisted development has lowered the barrier to building enterprise applications, turning low‑code platforms like Retool into strategic assets. By leveraging large language models, teams can prototype functional tools in days rather than months, reshaping the classic build‑vs‑buy calculus. This acceleration is reflected in Retool’s 2026 report, where a sizable share of respondents cite AI‑driven productivity as a primary catalyst for replacing off‑the‑shelf SaaS solutions.

At the same time, the surge in shadow IT highlights a governance gap that many organizations are still grappling with. With 60% of surveyed professionals admitting to creating software outside IT oversight, the traditional procurement and security frameworks are being bypassed. SaaS vendors must adapt by offering more flexible integration points, transparent APIs, and co‑development models to retain relevance. Meanwhile, enterprises need to establish clear policies and monitoring tools to balance agility with risk management.

For businesses considering the shift, the data suggests a pragmatic approach: start with high‑cost, low‑flexibility SaaS tools—such as niche workflow or reporting applications—and evaluate custom replacements on a pilot basis. Success stories like Harmonic demonstrate measurable cost savings and faster support cycles when internal teams own the code. As AI productivity metrics mature, organizations that embed measurement frameworks will better quantify ROI and scale custom development sustainably, positioning themselves ahead of the evolving software landscape.