Software Built For You

For decades, enterprises leaned heavily on IT to build custom software that aligned with their unique needs and processes. One notable example is Walmart in the 1980s, which developed a proprietary inventory management system that revolutionized retail logistics. By investing heavily in a technology project like this, Walmart created a real-time inventory and supply chain tracking system that gave them unprecedented control over stock levels, reduced waste, and optimized restocking. This system became a cornerstone of the company’s competitive advantage, enabling it to scale rapidly and keep costs lower than competitors who relied on more traditional, manual processes and, to this day, helps power Walmart’s position as the largest company by revenue in the United States. 

Bespoke software allowed companies to craft solutions tailored to their competitive advantages, creating differentiated ways of working that competitors couldn’t easily replicate. However, as enterprise technology matured, the complexity and cost of maintaining custom-built systems grew, and as IT teams grew and power structures ensued, they became more isolated from the functions they were meant to support. 

From Custom Software to SaaS

As internet infrastructure matured in the late 1990s, companies began exploring web-based applications to eliminate installation hassles and provide continuous updates directly through a browser. Salesforce, founded in 1999, is widely credited with pioneering the SaaS model by offering CRM (Customer Relationship Management) as a web-based service. Their tagline, "No Software," as paradoxical as it seemed, highlighted the departure from traditional software models and internal IT teams.

While Salesforce weathered the dot-com bubble, its traction reflected a broader trend: companies were increasingly frustrated with large, slow IT teams. In 2006, Amazon Web Services (AWS) launched, allowing startups and enterprises to host applications on Amazon’s infrastructure, dramatically reducing costs and accelerating SaaS adoption. AWS transformed IT with several key benefits:

• Lower Upfront Costs: No need to purchase expensive licenses.
• Scalability: Companies could start small and scale usage as needed.
• Continuous Updates: Software was updated seamlessly without disrupting users.
• Applications could be accessed from any device with an internet connection.