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Business Insider
7 days ago
- Business
- Business Insider
AI coding tools upend the 'buy versus build' software equation and threaten the SaaS business model
The enterprise software landscape is being quietly, yet profoundly, disrupted by the rise of AI coding tools such as Bolt, Replit, and Cursor. These services are upending one of the most fundamental technology decisions companies make: whether to buy software from external SaaS vendors or build it in-house. This once-clear distinction is blurring as AI lowers the barrier to building custom software. I grasped the magnitude of this shift at a hackathon party in San Francisco. There, I met Netlify CEO Mathias Biilmann and the startup's security chief Mark Dorsi. They showed me a live Slack feed where new apps were being deployed on Netlify's platform, roughly one every 10 seconds. Many of these were created using Bolt and similar AI coding services. And most were internal tools built by companies for their own use. This is a sea change. Historically, the decision to buy SaaS products stemmed from the high cost and complexity of building software internally. Skilled developers are expensive and internal IT teams are often stretched thin. But with AI-assisted software development, the economics shift. Tools like Bolt empower a new class of developer — what Biilmann calls "AI-native developers" and what Bolt calls "software composers." These are non-traditional developers, often from business or operations roles, who can now build apps using AI to generate functional code through English language prompts. Training these new builders takes weeks or months, not years of expensive computer-science study. As a result, there will likely be a huge influx of new developers. This new supply means businesses can hire more coders for less money. That, in turn, will help companies tackle software projects that previously wouldn't have made the cut. "That's where the build-versus-buy equation starts changing," Biilmann told me. "When you have millions of new people who can build software, the barrier goes down. What a single internal developer can build inside a company increases dramatically. It's a much more radical change to the whole ecosystem than people think." Where this shift will happen first More than 10,000 new websites are being created via new AI coding tools and launched each day on Netlify's platform (versus being coded only by human developers), he noted. Biilman sees the build-versus-buy shift happening in these software areas first: HR, Training, Q&A: These are often pretty simple applications that read and write data and do visualizations. Revenue Operations, CPQ, Business Dashboards: AI coding tools and agents can easily build interfaces or visualizations on top of existing company data. Marketing tools: These are relatively simple from a software perspective and they often need to be highly customized to specific company needs. What if AI agents write these applications? "There are so many other areas that will be impacted by this, that it's daunting to think through the full implications," Biilmann added. "But these are some of the easy, low-hanging areas." Who's building what Netlify used AI coding tools to build an internal employee survey tool, a task typically outsourced to SaaS providers such as Qualtrics or Momentive. Another example: a revenue operations staffer at Netlify used Bolt to create a pricing calculator for enterprise deals, potentially replacing a category of SaaS known as CPQ (Configure, Price, Quote) software. And a Netlify recruiter built a new in-house Interview Training Course app for hiring managers with an AI coding tool called Lovable, instead of buying from an external provider. Even VCs are embracing this trend by actually doing some of the work themselves. Martin Casado, a general partner at Andreessen Horowitz, recently built his own AI-powered customer-relationship-management tool. CRM software is the core offering of tech giant Salesforce. "For some software, it's becoming quicker to code my own version with AI than learn someone else's non-intuitive, shit UI," Casado wrote on X recently. Casado's CRM tool syncs with his calendar and email accounts. It takes that information and queries AI models to plan out each week, researching the people and companies he's due to meet. A note of caution Martín Migoya, CEO of tech consulting firm Globant, has spotted this trend. "We're seeing projects that are coming out that way," he said in a recent interview, noting that some companies are beginning to try to replace unsatisfactory software services with internally-built alternatives. Still, he urged caution. "Creating enterprise-class things is tough," Migoya added. AI models are improving, but software will still require support, the CEO noted. His view reflects a common concern: maintenance and reliability. If something breaks in an AI-coded internal app, who fixes it? This is where infrastructure plays a critical role. To address these concerns, companies like Netlify are developing what Biilmann calls "opinionated platforms" — infrastructure stacks optimized for AI-generated code and agents. These platforms handle authentication, authorization, staging, security, and data access in standardized ways, reducing the operational burden. This evolution could enable companies to move from building prototypes to deploying production-grade software, without hiring an army of senior support engineers, he added. The strategic implications for SaaS The implications for the SaaS industry are significant. If companies can build tailored internal tools for the same cost, or less, than SaaS subscriptions, the traditional SaaS model could be under threat. Per-seat pricing may start to look expensive when compared to more abundant AI-assisted, in-house human coders. Salesforce, the standard bearer of SaaS, could be vulnerable. While their core CRM system of record may remain sticky, some of the custom functionality layered on top might be replicated with AI-coding tools. "Salesforce is really afraid," Biilmann said. "They are not going to be vibe coded away from being the system of record for all your sales data. But it's much more likely that a lot of their own custom functionality on top of that, that they charge extra for today, gets replaced by people building their own custom functionality." Salesforce's answer, so far, is to build and launch its own array of AI agents. This Agentforce business is showing early signs of traction with customers, so this company may be well placed to fend off the threat. Others may not be so lucky. Consulting firm AlixPartners recently warned that more than 100 midmarket software companies are stuck in the middle of this disruptive AI trend. A massive new software layer This new wave of software probably won't replace systems of record, it will sit on top of them. Think internal dashboards, pricing calculators, contract tools, HR survey apps, and media monitoring systems. All these are traditionally handled by SaaS vendors. But as internal developers gain new AI superpowers, building these tools in-house becomes a viable option. AI-assisted software development is tipping the scales in the build-versus-buy debate. While it won't kill off the SaaS industry overnight, it introduces a powerful alternative. Companies that embrace this model may be able to gain more control, reduce costs, and innovate faster. Those that cling solely to traditional SaaS may find themselves paying more for less, while their competitors build the future from within. "You can now become a software developer without writing code," Biilmann said. "That's going to have a ripple effect on everything that's been built."
Business Insider
13-06-2025
- Business
- Business Insider
A former Google veteran used vibe coding to test a cat-purring app. It was fun, but wasn't purrfect.
This person worked at Google for more than two decades, so they know their software! They recently tried out Replit, following Google CEO Sundar Pichai saying he's been messing around with this tool. "Like Sundar, I've also tried Replit to test out a cat purring app I had (lol). I poked around on some other options, but I liked Replit because it took the query and really built an app for you (even on the free test version). So based on a query alone and answering some questions (e.g., do you want people to be able to log in and save their cat?), you had an app. And it would work! You could launch it if you were really interested and happy with it. "The limitations came with fine-tuning the app from there, as it seemed to get confused (and use up your credits) if you asked it for changes, e.g., change how the cat looked. It also was a pretty rough product; ultimately, if you wanted more than a proof of concept, you'd probably want to delve into the software code and change things yourself versus relying on queries. "Over time, I think they'll fine-tune these things and I love how it makes it easy to prototype ideas. It really lowers the upfront cost of testing ideas."
Business Insider
13-06-2025
- Business
- Business Insider
A former Google veteran used vibe coding to test a cat-purring app. It was fun, but wasn't purrfect.
This is the space where I usually try an AI tool. This week, though, I'm featuring an experience shared by a Tech Memo reader who got in touch after last week's installment about AI coding services such as Replit, Cursor, and This person worked at Google for more than two decades, so they know their software! They recently tried out Replit, following Google CEO Sundar Pichai saying he's been messing around with this tool. "Like Sundar, I've also tried Replit to test out a cat purring app I had (lol). I poked around on some other options, but I liked Replit because it took the query and really built an app for you (even on the free test version). So based on a query alone and answering some questions (e.g., do you want people to be able to log in and save their cat?), you had an app. And it would work! You could launch it if you were really interested and happy with it. "The limitations came with fine-tuning the app from there, as it seemed to get confused (and use up your credits) if you asked it for changes, e.g., change how the cat looked. It also was a pretty rough product; ultimately, if you wanted more than a proof of concept, you'd probably want to delve into the software code and change things yourself versus relying on queries. "Over time, I think they'll fine-tune these things and I love how it makes it easy to prototype ideas. It really lowers the upfront cost of testing ideas." Thank you, dear reader, for getting in touch. I have also been messing around with an AI coding tool. I chose partly because I recently met the cofounder of the startup behind this service, Stackblitz's Eric Simons (another Tech Memo reader, btw). Next week, I'll share some thoughts about Bolt. I've been building something with my daughter Tessa and we can't wait to show you!
Business Insider
13-06-2025
- Business
- Business Insider
Meta is turning to AI models from rivals like Anthropic to help its engineers code better
Meta has rolled out a new internal AI assistant for coding that is powered by multiple AI models, including those from rivals like Anthropic's Claude. The tool, called Devmate, became available to employees in March and is increasingly being used for more complex coding tasks that another internal AI assistant called Metamate often struggles with, two employees, who requested anonymity for fear of retribution from Meta, told Business Insider. The addition of Claude and other models shows that despite investing tens of billions of dollars into building its own AI models, Meta remains willing to use competitor models when they perform better. "Like many companies, we're experimenting with various models to help with coding efficiency," a Meta spokesperson told Business Insider. "We'll continue to refine and gather feedback as we go." Software companies, including giants like Microsoft and Google, increasingly use AI to write code. Demand for coding assistants like Cursor and Replit, many of which rely on Claude for its ability to handle complex, multi-step reasoning better than alternatives, has soared. Demand is growing not just from companies but from their employees. Amazon, for instance, recently rolled out Cursor internally after several employees inquired about using the coding assistant, BI reported earlier. Thanks to this boom, Anthropic has reportedly crossed $3 billion in annualized revenue. Anthropic didn't respond to a request for comment from BI. Employees say Devmate has increased productivity Devmate doesn't just help write code. It can also analyze failed tests, determine what went wrong, and automatically submit fixes for human review — capabilities that engineers have long viewed as futuristic. One current Meta employee said Devmate has cut their workload in half. "Devmate turns a 30-minute task into a 15-minute one," this employee said. "It's better than Metamate because it makes fewer mistakes when you chain multiple steps together, which is crucial for more advanced tasks." Internally, Devmate is considered an agentic assistant, meaning it can handle multi-step tasks and take actions on its own. This is more akin to tools like the buzzy coding app Cursor or Windsurf, another coding app recently acquired by OpenAI. "Code Llama sucks," another employee said, referring to Meta's own coding model, which is one of the options available within Metamate. "It's a good coding model by 2024 standards, but it's not good compared to the options we have in 2025." The employee said that they now use Metamate for simpler tasks like pulling up specific sets of data, while relying on Devmate for bigger, more complex tasks like building entire programs that move and process large amounts of data. Metamate does not support video or images and lacks agentic features. The Meta spokesperson confirmed that Devmate was used for more complex coding tasks. Meta rolled out Metamate last year, the Financial Times reported. In addition to coding, employees can use it for conducting research and drafting internal and external communications. At the time, Meta executives said that the company wanted to create "the world's best enterprise assistant." The Meta spokesperson said that the company wants Metamate to be helpful for all employees, including those who aren't technical. Meta's AI shortcomings One former Meta engineer told BI that while Meta's Llama model has made strides in areas like multilingual tasks and reducing hallucinations (AI's tendency to make up things), it is still behind in some capabilities needed for writing the best code. "When it comes to instruction-following and multi-step reasoning, which you need for any real coding agent, it's not there yet," the former Meta engineer said. These shortcomings have added urgency to Meta's broader AI strategy. CEO Mark Zuckerberg is meeting with top AI researchers at his homes in Palo Alto and Lake Tahoe to recruit for a new "superintelligence" team, Bloomberg reported. Meta is also reportedly finalizing a $15 billion deal to acquire nearly half of Scale AI, a data-labeling and annotation startup. As part of that deal, Scale AI CEO Alexandr Wang is expected to join Meta and lead the new team. Zuckerberg has predicted that AI will write half of Meta's code within a year. "Our bet is that in the next year, probably, maybe half the development is going to be done by AI as opposed to people," he recently said. For now, though, that AI comes from competitors.
TechCrunch
12-06-2025
- Business
- TechCrunch
Google Cloud outage brings down a lot of the internet
Large swaths of the internet went down on Thursday, affecting a range of services, from global cloud platform Cloudflare to popular apps like Spotify. It appears that a Google Cloud outage is at root of these other service disruptions. Google Cloud said it started investigating service issues affecting its customers at 11:46am PT. The company still does not have an ETA for when its services will be back online. 'We are currently investigating a service disruption to some Google Cloud services,' said Google Cloud spokesperson Devon Smiley in an email to TechCrunch. At 11:19 am PT, Cloudflare also said it was investigating service disruptions affecting its customers, according to its status page. At 12:12 pm PT, Cloudflare said it was starting to see its services recover after investigating the issue. 'This is a Google Cloud outage,' said Cloudflare spokesperson Ripley Park in an email to TechCrunch. 'A limited number of services at Cloudflare use Google Cloud and were impacted. We expect them to come back shortly. The core Cloudflare services were not impacted.' Thousands of users have reported that popular apps, including Spotify, Discord, Snapchat, and experienced outages on Thursday afternoon, according to the crowdsourced reporting platform DownDetector. AI coding apps such as Cursor and Replit also appeared to go down on Thursday. Google cloud is having an outage and that's taking Replit down. We're working with them to bring it back up ASAP. — Amjad Masad (@amasad) June 12, 2025 Spotify spokesperson Shira Rimini said they were keeping an eye on Google Cloud's status page for more updates. Techcrunch event Save $200+ on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Save $200+ on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Boston, MA | REGISTER NOW Am AWS spokesperson told TechCrunch they were not experiencing any service disruptions on Thursday, and Microsoft Azure has not reported any outages on their official channels. TechCrunch has reached out to other cloud providers and companies mentioned for additional comment, but we have not heard back at the time of publication. Typically, service disruptions of this nature are resolved in a matter of hours. These outages appeared to start around 11 am PT on Thursday, disrupting the middle of the work day for millions of people across the U.S. It seems likely that services will start coming back online relatively shortly.
