Build It, or Buy It?
TechnologyThere is an active debate happening right now in a lot of companies: should we build this ourselves, or buy it?
With vibe coding and cheap AI execution, a small team can build and ship fast. So they are looking at products they currently pay for and asking whether they could just build their own. And to be honest, it has scared a lot of AI startups. The worry is also if we show people what our product does, will they just reverse engineer it?
At first I though this was an existential threat to start-ups but now I am pretty sure it is not because I have come to the conclusion that in most cases buying still makes more sense for most types of software and for most types of companies and is often the better strategic and financial choice.
Firstly building it yourself is not as cheap or as easy as it looks because it's not just about the working first version it's about iterating that to fit your needs and get something that really will get adopted and used and make a valuable difference. That part hasn't been solved or made easier with the availability of rapid prototyping tools.
The hard part is not a quick build, it is getting a decent piece of software over the line — reliable, secure, maintainable and integrated enough to run a real part of the business. That takes longer than people think. It doesn't just need engineers, its need a product lead, and a business owner - which also means hiring a team not just one person. Decent AI engineers and product people are not free, and the market for them is competitive. An internal build that looked like a saving can cost much more than a yearly subscription and is less flexible. You are kind of stuck with it, whereas with a vendor you can move on if its not a good fit.
But the larger argument is not really about building the first version. It is about maintaining it for years after. And really there is no point having something in-house if it is badly maintained, if you are not going to invest long term, its a wasted investment in time and money.
To keep pace with the best tools, a company has to dedicate serious resources to a problem that is not its core business. A third-party vendor is incentivised and dedicated to only that thing: make their software as capable and competitive as possible, because that is what keeps it alive. Their entire existence depends on it. Your internal team, however talented, is not subject to the same pure market pressure. They are pulled in many directions. Their incentives are tied to your broader company, not to making this one piece of software the best in its category. Over time that creates a predictable gap. The purchased product keeps improving. The internal product survives and probably languishes somewhere down the team's to-do list.
The other reason teams want to build in-house is because of IP and customisation. Both are really procurement issues, not build-versus-buy issues.
On IP and compliance, that is exactly what policies, compliance and contracts are designed to protect. The risk obviously does not completely disappear, but we have often seen just as large privacy and data protection failures in-house as with a third-party vendor. There is no implicit elimination of risk just because you keep data inside your own walls. A careful procurement process gives you a known, managed risk rather than an argument for building everything yourself. It can also be a way of passing off risk rather than owning it yourself.
On customisation, it is tempting to think that unless we build it ourselves it will not be exactly fit for purpose. That's no longer true. The real point is that we can use AI efficiencies to make off-the-shelf products much more intelligent, brand-aware, agentic and personalised. The same capabilities that allow companies to build also allow vendors to capture those efficiencies and offer customisation, support and configuration at much lower cost. AI has made it possible to make something feel so well-configured that it feels bespoke, even when it is not.Of course at higher values, real customisation is also available plus dedicated support and a touch points which makes the argument for building in-house even weaker.
There is a related trade-off that is often framed as a downside but can actually be an advantage. When you buy from a vendor that serves many customers, the system gets better because it sees patterns across many organisations, not just yours. Your data and processes can contribute, with the right controls, to a broader learning loop. Done properly, network effects create a better product for everyone. Done badly, it creates a privacy problem. As we have seen at the big social media companies, it is a double-edged sword, and the distinction between customer-specific data and generalised system learning matters enormously. But the underlying point stands: network effects and compounded learning on what makes a product better, does make the product sharper than any single internal team could keep it.
All of this does not mean building is always wrong. There are clear cases where in-house makes sense. The question to ask is often "is this central to how we work every day, specific to us, and stable enough that we do not need it to keep up with the market?"
A good example is a productivity tool or CRM tool. They both deal with basic functionality that does not require constant maintenance to deliver value as an in-house product. And the benefits probably outweigh the cost, because then you can really make it work for how you manage customer data and your sales process, for example. In fact, I built my own CRM because of this exact reason: every sales team works differently, and we all like to organise our tasks in different ways. So in this case a quick build for that added convenience makes sense. In that middle ground — important enough to affect the core business day-to-day, specific enough to be awkward to configure in someone else's product, simple enough to maintain and worth the cost — building can be the right call.
Another sensible case is a proprietary dashboard or reporting layer that shows exactly what your leadership team looks at each morning. The underlying analytics engine is almost always better bought. But the particular view, thresholds and alerts that map to your operating rhythm are sometimes not worth forcing into a generic tool.
But for most of the things people might replace external software with in-house builds for, it doesn't make sense. Even things that appear simple like AI content engines, video pipelines or drafting software can be complex or depend on underlying models and algorithms that need to be constantly improve and iterated to work. They need continuous improvement, and it is often much better to buy carefully, with controls in place, than make your own. The time would almost always be better spent working with a specialised provider and shaping the product so it feels as though it was designed for you, even when, strictly speaking, it is not.
I also suspect the current enthusiasm for building is partly a phase. It is exciting to discover that a small team can ship something impressive in a weekend. It is less exciting to maintain that thing for three years while the external market moves on. Many internal builds start strapped onto the core business, funded by diverting budget or hiring someone to own the product internally. Then the champion leaves, the budget gets reallocated, the business changes direction, and the system becomes technical debt nobody wants to touch. The project gets shelved not because the people were not capable, but because it was always a distraction from the company's actual work.
My prediction is that we are in a cycle. Most organisations will probably return to a clearer distinction between what they must own and what they should just rent. The specialised providers will keep getting better, not just because they have more resources, but because their entire existence depends on it. And the companies that resist the temptation to build everything themselves will generally have sharper, more maintainable stacks and more focus on the work that actually matters. They will discover that it is better to make your main thing your main thing. And even when it is your main thing, thing contract drafting for law firms, its still better to make someone else customise it for you and have a dedicated point person, then tie up your tech team for years.
That does not mean you should not hire an AI developer or innovation consultant. I just suspect the better use of their time is auditing options and working with the vendor to customise the offer, rather than building something from scratch. They will not tell you that, of course, because no engineer wants to be a secret procurement person.




