Software Is Dead. Custom AI Is What Comes Next.

"Software is dead. Because everything's gonna be customized to your unique utilization."

That's Mark Cuban. Not in a think piece or a keynote — in a casual interview that racked up 7,500 likes in a few days. He followed it with a question that should matter to every business owner reading this:

"There are 33 million companies in the US. Who's gonna customize it for them?"

If that sounds like hype, keep reading. Because five completely independent sources — a billionaire investor, a SaaS strategist, a startup CEO, and two practitioners in the trenches — are all saying the same thing right now. They don't appear to be coordinating. They're just looking at the same reality.

And a plumber already proved them right.

The Plumber Who Canceled a $40,000 Contract

Adam Spearing, a technology consultant we've been tracking for months, documented a case that makes the thesis concrete.

A plumbing company had signed a $40,000 contract for custom business management software. Scheduling, dispatch, invoicing, customer communication — the usual package that small service businesses pay through the nose for because nothing off the shelf quite fits.

Before the project started, someone showed the owner a handful of AI tools. Not a custom-built system. Not a six-figure enterprise platform. Just freely available tools configured to work together.

The AI handled about 80% of what the custom software was supposed to do. The plumber canceled the contract.

Think about what that means. Not "AI might eventually replace software." It already did — for one plumber, on one specific project, with tools that exist right now. The $40,000 question isn't theoretical anymore. It's a canceled invoice.

Now, 80% isn't 100%. That remaining 20% still matters, and we'll be honest about that later. But the economics shifted overnight. The question is no longer whether AI can replace traditional software for small businesses. The question is how fast it happens.

What "Software Is Dead" Actually Means

Let's be precise, because this phrase is easy to misread.

Software isn't disappearing. Your phone still needs an operating system. Hospitals still need electronic health records. Airlines still need reservation systems. The infrastructure layer of software is going nowhere.

What's dying is the one-size-fits-all SaaS model for small and mid-sized businesses.

You know the pattern. You need to manage customer relationships, so you buy a CRM. It does 200 things. You need 12 of them. You spend three months learning the interface, another month customizing fields, and then you work around the parts that don't fit your business. You pay $50-200 per user per month for the privilege.

Multiply that across every function in your business. Project management tool. Email marketing platform. Invoicing software. Scheduling app. Customer support system. Analytics dashboard. Each one built for everyone, optimized for no one, and priced for recurring revenue.

The AI shift isn't about replacing these tools with a single magic platform. It's about building exactly what your business needs — and nothing else. Custom workflows that match how you actually work, not how a product manager in San Francisco imagined you might work.

Guillermo Rauch, the CEO of Vercel (the company that runs infrastructure for some of the biggest websites on the internet), wrote an essay about this shift. His framing: software is becoming invisible. The interface isn't a dashboard you log into. It's an API that AI agents talk to. The software still exists — you just don't see it anymore. You see results.

When your customer sends a message at 11 PM and gets an intelligent, context-aware response at 11:01 PM, that's software working. But it doesn't look like software. It looks like your business being responsive.

33 Million Reasons This Matters

Cuban's number is real. There are roughly 33 million businesses in the United States. The vast majority are small — under 20 employees. Most of them are underserved by current software.

Not because the software doesn't exist. Because it doesn't fit.

A landscaping company doesn't work like a dental practice, which doesn't work like a property management firm, which doesn't work like a commercial bakery. But they all use the same handful of SaaS platforms, bending their operations to fit the tool instead of the other way around.

Aakash Gupta, a SaaS strategist with a large following, frames this as the next IT services boom. His argument: we've seen this pattern before. In the 1990s and 2000s, every business suddenly needed a website, an email system, and a network. They didn't build those things themselves. An entire industry of IT consultants, integrators, and managed service providers sprang up to do it for them.

The same thing is about to happen with AI customization. Every business is going to need AI workflows tailored to their specific operations. Most of them won't build those workflows themselves. Someone has to do it for them.

Damian Player, a practitioner building in this space, boils it down to one sentence: "Pick one vertical, learn the flows, become the AI team they never hired."

That's the opportunity in its simplest form. And it's an opportunity because the gap between what AI can do and what most businesses are actually using it for is enormous.

What Custom AI Actually Looks Like

Let's make this tangible. Here's what "custom AI replacing SaaS" looks like for three different businesses.

The Contractor

Before: Pays $150/month for scheduling software, $80/month for invoicing, $50/month for a CRM, and $30/month for a messaging platform. Total: $310/month, four different logins, data scattered across four systems, nothing talks to anything else.

After: A single AI workflow that reads incoming job requests from email and text, schedules them based on crew availability and location (minimizing drive time), sends confirmations to customers, generates invoices when jobs are marked complete, and follows up three days later asking for a review. One system. One flow. Built around how the contractor actually works.

The Professional Services Firm

Before: Partners spend 8-10 hours a week on administrative tasks — writing proposals, summarizing meetings, updating project trackers, generating status reports for clients. Billable hours lost to overhead.

After: An AI assistant that joins meetings (with permission), generates summaries, updates the project tracker, drafts client status reports, and even prepares first drafts of proposals based on past winning submissions. The partners review and approve. The administrative hours drop to 2-3 per week. That's 5-7 hours of billable time recovered per partner per week.

The Local Retailer

Before: Social media is a guilt trip. The owner knows they should post consistently but never has time. They pay a marketing agency $1,500/month for generic content that doesn't sound like their brand.

After: A content agent that reads the store's inventory updates, upcoming events, and customer feedback, then generates a week of social posts in the owner's voice. The owner spends 15 minutes reviewing and approving instead of 5 hours creating from scratch — or $1,500 outsourcing to someone who doesn't know the business.

None of these examples require cutting-edge technology. They require understanding the business deeply enough to wire the right AI tools together in the right order, with the right guardrails.

The Honest Take: What's Hype and What's Real

We wouldn't be doing our job if we didn't pump the brakes a little. The "software is dead" thesis is directionally correct, but it comes with caveats.

AI is not magic. It's pattern matching at scale. It works well for tasks with clear inputs, predictable patterns, and definable quality standards. It struggles with novel situations, ambiguous requirements, and tasks that require genuine judgment.

The 80/20 problem is real. Remember the plumber? AI handled 80% of the job. That last 20% — the edge cases, the complex scheduling conflicts, the unusual customer situations — often requires human judgment. A good AI system handles the routine and flags the exceptions. A bad one tries to handle everything and gets the hard stuff wrong.

Setup isn't free. Custom AI workflows need to be designed, built, tested, and maintained. The tools might be cheap, but the expertise to configure them correctly isn't something you pick up in a weekend. An AI agent without proper guardrails is like an employee with no training — the potential is there, but the results won't be.

Security matters more, not less. When you replace four separate SaaS platforms with one custom AI workflow, that workflow becomes critical infrastructure. It needs proper access controls, data handling, error recovery, and monitoring. We've written about AI agent security risks because they're real and most people ignore them.

Vendor lock-in still exists. It just looks different. Instead of being locked into Salesforce or HubSpot, you risk being locked into a specific AI model or framework. Good architecture avoids this by keeping the business logic separate from any single AI provider.

So no, software isn't dead tomorrow. Generic SaaS platforms aren't going to vanish overnight. What's happening is a gradual shift where custom AI solutions become viable for businesses that could never afford custom software before. The $40,000 custom application becomes a $200/month AI workflow. That's not hype. That's math.

What This Means for You

If you're a business owner reading this, here's the practical takeaway.

You're probably overpaying for software that doesn't quite fit. Add up what you spend monthly on SaaS subscriptions. Now ask yourself: how much of each tool do you actually use? If the answer is "maybe 30%," you're not alone. That's the norm.

The alternative is getting closer every month. Custom AI workflows that match your exact business process — not a generic template — are becoming affordable for businesses of all sizes. Not free. Not trivial. But affordable in a way that custom software never was.

You don't need to understand the technology. You need to understand your business. What are the repetitive tasks? Where do things fall through the cracks? What would you automate if automation was affordable? Those answers are more valuable than any technical knowledge.

Start small. The businesses getting the most from AI right now aren't the ones trying to automate everything at once. They're the ones that identified one painful, repetitive workflow and automated just that. They proved the value, measured the results, and expanded from there.

Ask hard questions. When someone tells you AI can handle something, ask: what happens when it gets it wrong? What are the guardrails? Who monitors it? How do we know it's working? The quality of the answers tells you whether you're talking to someone who builds real systems or someone who watched a demo.

The Next Five Years

Cuban's question — "Who's gonna customize it for them?" — is going to define an entire industry over the next five years. The 33 million businesses in America didn't all get websites at the same time. It took a decade. It'll take time for custom AI to reach every plumber, dentist, and property manager. But the direction is clear.

The businesses that move early won't just save money on software subscriptions. They'll operate faster, respond to customers quicker, and make better decisions with less effort. Not because AI is smarter than humans, but because it handles the routine work that buries humans in busywork.

Generic software was the best option when custom solutions cost $40,000 and took six months. That's not the case anymore. The tools are nearly free. The models keep getting better. The only missing piece is someone who understands both the technology and the business well enough to wire them together.

That's the gap. And it's closing fast.

Ready to Stop Overpaying for Software That Doesn't Fit?

Blue Octopus Technology builds custom AI workflows for businesses that are tired of bending their operations to fit generic software. We handle the architecture, the security, the guardrails, and the ongoing maintenance — so you get a system that works the way your business actually works.

If you're curious what a custom AI workflow could replace in your business, let's talk about it.

Blue Octopus Technology helps businesses work smarter with AI — without the complexity. See what we build.