Here's something that should bother you more than it does: the cost to build software has plummeted. AI tooling, open source frameworks, scalable cloud infrastructure — what used to require a team of twenty engineers and millions in venture capital can now be built by a small, motivated, intellectually capable team. This isn't opinion. It's observable, measurable, undeniable.
And yet the price of software keeps climbing.
SaaS inflation is running at roughly four times general inflation, according to Vertice's SaaS Inflation Index. Vendors are bundling AI features nobody requested to justify price hikes — SaaStr reported in 2025 that 60% of vendors were doing exactly this. Deloitte's 2026 data shows only 11% of organizations are actually using agentic AI in production. So the majority of businesses are paying more for capabilities they aren't using, built on infrastructure that costs less than ever to operate.
The trajectory of build cost and software price are moving in opposite directions. That's either companies trying to recover from decades of poor financial stewardship — or it's pure margin extraction. There's no third option.
A Thought Experiment Nobody Is Running
Here's an interesting question: Is it actually cheaper for big tech to let independent builders do the work?
Follow the pattern. Microsoft, Google, Meta, and the major AI companies create tools and infrastructure that make building software extraordinarily accessible. Motivated people — many of whom never considered building before — go build on that infrastructure. Big tech gets paid regardless. Cloud hosting. API calls. Compute cycles. Every builder is a customer before they are a competitor.
Now those builders do all the hard work. Marketing. Sales. Operations. Financial stewardship. Customer acquisition. Customer support. They figure out what the market wants through years of direct contact with real users. They price their software lower than big tech would — they're startups, they're hungry, they have to.
And when a builder gets big enough — significant market share, proven demand, de-risked product-market fit — big tech acquires them.
Over a three-to-seven year span, does it cost Microsoft or Google less to let builders do the work and then buy them out than it would to build, market, sell, staff, and support those products internally? Consider the cost of employees, office space, running the software for all those clients over all those years, the marketing budget required to capture what the builder captured organically. Even if it's not dollar-for-dollar cheaper, the risk is externalized entirely.
This isn't speculation. It's a pattern. And patterns deserve scrutiny.
That's not innovation. That's an acquisition pipeline disguised as democratized tooling.
The Efficiency Narrative Isn't Even Holding Up
The standard defense is that AI-driven efficiency justifies the pricing. But Forrester's data tells a different story: 55% of employers regret AI-driven layoffs. The data suggests the efficiency gains were overstated. The cost savings were often temporary. The institutional knowledge lost was permanent. Meanwhile, ChartMogul's research shows that bootstrapped companies — the ones who never took the venture capital, never chased growth-at-all-costs — showed stronger margins and adapted more quickly to market volatility than their VC-backed counterparts.
So the companies that operated with discipline from day one outperformed the ones that spent first and figured out the economics later. And now those same undisciplined companies are raising your prices to fix their balance sheets.
You are subsidizing their mistakes.
What the Honest Play Looks Like
If the cost to build has genuinely decreased — and it has — the honest response is to pass that savings to the client. Not to pocket the margin. Not to bundle features nobody wanted in order to justify the same or higher price point.
The ownership model does this. You pay for real value, and then you own it. Your costs decrease over time because at some point, you're done paying. The software doesn't get taken away. The price doesn't creep up annually. You're not a revenue line on someone else's income statement in perpetuity.
That's how it should work. Build costs went down. Your costs should go down too. If they're not, someone is keeping the difference — and it's not you.
This is the fourth post in a series examining the broken economics of legacy SaaS.