The Customer Is the Builder: how AI coding agents change software economics

A paper posted to arXiv on 21 Oct 2026 by Ripon Chandra Malo reports that the length of benchmark tasks leading AI coding agents can complete at 50 percent success, measured in human working time, has doubled roughly every 129 days since 2023. The study found 575 potential open-source alternatives to selected commercial products and reports that 32 percent of respondents to an organizational survey said their organization forwent at least one software purchase because it could build the functionality with coding agents, even as purchased software gained US investment share and tracked commercial installations grew. The author cautions that the benchmark projections are an extrapolation rather than a forecast of customer switching, and that the self-reported survey data do not establish displaced spending or the reliability of the resulting tools.

Computer Science Software Engineering Submitted on 21 Oct 2026 Title:The Customer Is the Builder: How AI Coding Agents Are Rewriting the Economics of Software View PDF https://arxiv.org/pdf/2610.30307 HTML experimental https://arxiv.org/html/2610.30307v1 Abstract:AI coding agents could change whether organizations buy software or build the functionality they need. We focus on organizations and professional buyers whose domain knowledge can help them specify and evaluate tools for their work. We define the software substitution frontier as the functions customers could build and maintain at an acceptable standard for less than buying them. Using public data, we compare growing capacity to build with indicators of market change. Since 2023, the length of benchmark tasks that leading agents can complete at 50 percent success, measured in human working time, has doubled about every 129 days. A broad search identified 575 potential open-source alternatives to selected commercial products, although some functional matches still require independent validation. The Craft suite produced 12 application repositories over 12.0 days of public development, but these remain early versions with unverified completeness and reliability. Market evidence is mixed: purchased software gained US investment share and tracked commercial installations grew. Yet 32 percent of respondents to an organizational survey reported forgoing at least one software purchase because their organization could build the functionality with coding agents. These self-reports do not establish the spending displaced or the reliability of the resulting tools. The gap motivates a warning: customers' capacity to build could affect individual buying decisions before a broad purchasing shift becomes visible. We examine this possibility using benchmark projections and observable market tests. The projections are an extrapolation, not a forecast of customer switching. Submission history From: Ripon Chandra Malo view email https://arxiv.org/show-email/1102ac95/2610.30307 v1 Wed, 21 Oct 2026 18:20:11 UTC 1,344 KB Additional Features Current browse context: cs.SE References & Citations Loading... Bibliographic and Citation Tools Bibliographic Explorer What is the Explorer? https://info.arxiv.org/labs/showcase.html arxiv-bibliographic-explorer Connected Papers What is Connected Papers? https://www.connectedpapers.com/about Litmaps What is Litmaps? https://www.litmaps.co/ scite Smart Citations What are Smart Citations? https://www.scite.ai/ Code, Data and Media Associated with this Article alphaXiv What is alphaXiv? https://alphaxiv.org/ CatalyzeX Code Finder for Papers What is CatalyzeX? https://www.catalyzex.com DagsHub What is DagsHub? https://dagshub.com/ Gotit.pub What is GotitPub? http://gotit.pub/faq Hugging Face What is Huggingface? https://huggingface.co/huggingface ScienceCast What is ScienceCast? https://sciencecast.org/welcome Demos Recommenders and Search Tools Influence Flower What are Influence Flowers? https://influencemap.cmlab.dev/ CORE Recommender What is CORE? https://core.ac.uk/services/recommender arXivLabs: experimental projects with community collaborators arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website. Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them. Have an idea for a project that will add value for arXiv's community? Learn more about arXivLabs https://info.arxiv.org/labs/index.html .