The build vs. buy shift: how vibe coding and shadow IT have reshaped enterprise software

In recent years, the dynamics of software development have shifted dramatically, with companies increasingly opting to build custom tools instead of relying on generic SaaS solutions. This trend has been facilitated by advancements in large language models (LLMs) and the popularization of "vibe coding," which allow organizations to rapidly develop tailored software that meets specific needs. A survey of 817 builders revealed that 35% of teams have already replaced at least one SaaS tool with a custom-built solution, and 78% plan to continue this trend by 2026. The rise of shadow IT—where employees create software outside of official IT oversight—highlights the demand for speed and specificity in tool development, although it also introduces risks related to security and governance. Enterprise AppGen platforms like Retool offer a solution by enabling secure, governed development of custom tools that can integrate seamlessly with existing data systems. Despite the enthusiasm for AI-driven development, organizations face challenges in measuring AI's productivity impact, with many lacking proper metrics to assess ROI. The future of enterprise software may lie in balancing the need for rapid, custom development with the necessary infrastructure to manage and secure these innovations effectively.