Interest in building applications is outpacing traditional approaches of buying off-the-shelf enterprise applications, according to CIOs and industry experts. This marks a pivot from an era of software-as-a-service (SaaS) implementations, a best practice aimed at meeting speed-to-market, best-in-breed and cost management IT strategies. A growing number of CIOs and CTOs leverage virtual machines, cloud technologies and new tools to build their own applications aimed at delivering business value and a return on investment (ROI).
Using a hybrid cloud IT platform that can manage containerized applications, these IT leaders have the ability to build and run new applications across IT infrastructures, including modern cloud-like data centers and public cloud services. For many, this is a path for organizations to connect new capabilities with legacy applications or shift away from older technologies and processes in favor of new AI capabilities that meet specific business needs.
Menlo Ventures reported that enterprise investment in AI applications grew from $4 Billion to $4.6 Billion between 2023 and 2024. In their “State of Generative AI in the Enterprise 2024” report, the investment firm showed in-house application development grew during that same period to nearly equal the amount of sourced vendor GenAI applications.
The 2025 Nash Squared Digital Leadership Report finds that 38% of global CXOs have widespread AI adoption in the business, and the demands on enterprise IT teams are set to increase. As a result, building rather than buying may be about to come of age in the AI age.
Many IT teams today create their own system automations by building on top of open source tools. For example, the Nutanix IT team uses NetBox to create a system inventory tool that helps access operations and identify resources that need attention. The company also built their own series of AI apps that leverage internal data to improve customer support, product sales inquiries and service engineering.
Some turn to companies like DataRobot for templates to build and customize AI applications and agents. To accelerate their application development, more enterprises are turning to AI-assisted coding tools such as Windsurf (formerly Codeium – just bought by OpenAI), which can speed up workflows, suggest coding options and for test performance of new applications.
From Legacy to New Applications
Organizations are still dogged by legacy applications, which are acting as a dead weight on the digital transformation plans of CIOs and the wider leadership team. In many cases, these applications are deemed critical, or the organization has lost the skills to do anything other than maintain them. Yet the application is preventing the business from being agile enough to respond to changes in the marketplace. In an ever evolving economy influenced by technology innovation, this is a risk to the financial sustainability of the business.
"New business opportunities require agility from application portfolios,” technology analyst firm Gartner noted in a report from 2021. “Yet many businesses today are limited in their ability to adapt, often due to their application portfolios being bloated, difficult to change, and aligned to the strategy of the past."
Others industry watchers have noted that organizations are often still realizing ROI on technology solutions reaching their obsolescence. For many enterprises, legacy applications become monoliths stemming from earlier digital transformations and have grown problematic as new customer and business needs evolve.
Reasons for Building Applications
In recent years, open source software, cloud native technologies and the rise of generative AI along with the ability to manage applications and data across IT infrastructures have combined to empower CIO, CTO and IT teams. Some see it as harkening back to what inspired them to work in IT: tinkering, engineering and finding solutions using modern technologies.
“Why try and massage these giant off-the-shelf blocks?” asked Tim Wood, CTO at London commercial property firm Arch Company in an interview.
Wood developed a platform for all of its customer-facing services.
“The case for build not buy happened a couple of years ago, but there are now enough instances that, as a CTO, you don't look like a lunatic for saying we should build it," he told The Forecast.
Wood used the cloud-based application development platform OutSystems to develop Keystone, a core platform for the business.
"If you think about the big SaS packages of this decade and before that, the SAP, Siebel, and PeopleSoft ERPs, they have become monoliths,” Paulo Rosado, CEO and founder of OutSystems, told The Forecast at a Nutanix .NEXT conference. “The cost of building what you want and with no lock-in is so low in risk."
For Stijn Stabel, CTO of European retailer Carrefour, building applications enabled the French-headquartered business to fully digitize its business. Carrefour had moved its workloads to the cloud, but as is often the case for organizations, lifting and shifting to the cloud does not deliver significant business benefits. Building applications enabled Carrefour to become a cloud-native enterprise.
Building applications instead of buying them allowed the digital transformation to meet the needs of the owning partners, according to Kyle Dumont, Senior Director, Digital Transformation at law firm Morgan, Lewis & Bockius.
“Attorneys can be difficult, but they have a deep sense of client satisfaction, so we started with them and removed the road blocks," Dumont said, explaining how building applications created a partnership between his technologists and the owning partners.
The experience of Dumont and Stabel aligns with Gartner's findings. Despite the adoption of Agile and DevOps best practices, Dennis Gaughan, Distinguished VP Analyst, Gartner finds that many businesses today are limited in their ability to adapt, often due to their application portfolios being bloated, difficult to change and aligned to the strategy of the past.
Adopting a build-it mentality and cloud toolset helps remove barriers.
“Development platforms enable smaller and more efficient enhancements to be faster and cheaper while also encouraging initiative validation via proofs of concept,” wrote Philip Isbouts, of EY. “Businesses can move forward on the transformation journey with greater speed while still maintaining quality and security standards."
Rather than align their business processes to the technology, IT teams want to find ways to customize or adapt their resources to meet specific or changing needs.
“Off the shelf with zero customization is a fantasy," CTO Wood said.
"If you consider that in most organizations, there are two systems, CRM and ERP. If you don't want to customize the ERP, as it's risky and slow, so it becomes a monolith, that means I am putting all my customizations into the CRM. But actually, with CRM, if I want a lot of flexibility, I don't really want a CRM."
Outcomes and Benefits
The proof for any CEO backing a move to building applications is to see outcomes and ROI. At Morgan, Lewis & Bockius, the law firm has gone from an initial two self-built applications to 28 as the business witnessed the benefits. Stijn at Carrefour said a cost-analysis of building new applications as part of the retailer's move to becoming cloud native was four times faster and cheaper.
"We were able to deliver business value." Stijn said at a Low Code conference. “We proved the value with the first application, and from that moment, everyone was convinced that we can make a difference to the business."
Delivery times were reduced to a matter of weeks.
With reduced delivery times, CXOs are able to change the culture of the business as staff embrace the flexibility of the cloud, become data-centric, and can begin experimenting with new technologies such as AI.
"If you look at the impact, people are thinking differently about the type of business that we operate, and they are thinking about the entire client journey and touchpoints," says Dumont.
Embracing new tools and combining them to create new capabilities hits at the heart of what many IT professionals like most about their work, according to CTO Stijn.
“All engineers like playing with Lego,” Stijn said. “You are giving them bricks and not plastic that need molds."
Moving forward, CXOs and organizations will balance resiliency with flexibility and innovation as they manage the IT capabilities, which means deciding when to retire legacy applications or build new technologies around them. It also means knowing when to get rid of or revamp self-built tools that decline or become ineffective over time. The issues of technology debt are as pertinent to self-built applications as they are to any software.
Mark Chillingworth writes about leaders in business and technology. He’s a regular contributor to Digimonica. Find him on LinkedIn.
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