Organisations are increasingly using agentic coding tools to build software in-house in lieu of purchasing it, according to a McKinsey report titled “The state of AI in 2026”.

Nearly a third of respondents (32 per cent) report that their organisations have decided against buying one or more software products or features because they could be built internally with agentic coding tools.

The trend spans several sectors, with technology companies leading the shift away from external software procurement. Across industries, 41 per cent of respondents in the technology sector report forgoing software purchases in favour of internal development using AI coding tools.

This is followed closely by healthcare payers and providers at 39 per cent, while both professional services and energy and materials stand at 38 per cent.

Financial institutions register 36 per cent, media and telecom at 34 per cent, and pharmaceuticals and medical products at 33 per cent.

Lower rates appear in sectors such as insurance at 19 per cent and the public and social sector at 17 per cent.

McKinsey Senior Partner Lieven Van der Veken said, “Not only are larger organisations scaling AI faster, but many are beginning to take greater ownership of their technology and change agendas. Until recently, many leaders assumed that AI was beyond the capabilities of their own technology teams, and that moving quickly meant securing the right external partnership.”

Van der Veken added, “Now, the tone is changing. Leaders are asking what their organisations need to build AI tools themselves. The rise of software coding agents and in-house development is one clear sign of this broader shift.”

The report noted that enterprises are progressing beyond the initial phase of AI experimentation. As per the report, nearly nine in ten respondents report regular use of AI in at least one business function. Overall enterprise-scale adoption expanded over the past year, with 44 per cent of respondents reporting that AI is scaling across their organisation, compared to 38 per cent previously.

Furthermore, the proportion of organisations deploying AI across three or more functions grew from 51 per cent to 56 per cent.

Addressing this strategic evolution, Van der Veken said, “This, of course, does not mean companies should build everything themselves or turn away from forging partnerships. It means that leading organisations are engaging partners from a position of agency.”

He stated, “The organisations moving fastest are becoming more deliberate about where to buy, where to build, and where to develop enough internal capability to integrate and scale what works. They are also treating operating costs as a design constraint, not an afterthought, and making the deeper changes in workflows required for value realisation.”

Adoption patterns show larger enterprises outpacing smaller firms in deploying AI capabilities. Fifty-four per cent of respondents from organisations generating at least USD 1 billion in annual revenue report scaling AI enterprise-wide, compared to one-third of smaller organisations.

Larger enterprises also registered faster momentum in adopting agentic AI, with the share scaling agents in one or more functions increasing from 27 per cent to 40 per cent, while smaller organisations remained flat at 22 per cent.

Microsoft is moving parts of its AI portfolio beyond pure per-seat pricing by pairing user licenses with charges tied to usage. The hybrid model keeps recurring seat fees in place while adding a variable billing unit as customers consume more AI capacity.

That model is beginning to show up in Microsoft’s financial results. Dynamics 365 Customer Service credit consumption rose fourfold quarter over quarter, while GitHub Copilot generated what Microsoft called “significant consumption revenue” after its June billing change.

Microsoft also reported more than 30 million paid Microsoft 365 Copilot seats, with net additions more than doubling from the previous quarter, and said GitHub continued adding Business and Enterprise seats.

Software giant VMware is suing an Italian distributor for around €30 million in damages, claiming in a London court that the company failed to ensure a customer agreed to delete old software licenses during an upgrade plan.

VMware said Computer Gross should have required Italian bank Intesa Sanpaolo to agree to VMware’s licensing terms when it sold the bank VMware’s cloud computing software, according to a newly public High Court claim.

Computer Gross had previously bought the rights to resell the software, the claim says.

VMware said that under its terms, Computer Gross was required to ensure that Intesa deleted its old software licenses once it had the updated versions. But Computer Gross failed to do so, and Intesa confirmed that it never agreed to those terms, according to the claim.

VMware said that it gave Computer Gross an 82% discount on the standard resale agreement, based on the expectation that Intesa would retire its existing perpetual licenses, according to the filing.

The list price of the software was €36 million, but Computer Gross paid only €6.6 million, resulting in a discount worth €29.4 million, the claim says.

VMware said Computer Gross should have prevented the license duplication. By not doing so, Computer Gross essentially sold the software at a heavily discounted price.

As well as damages for the allegedly unauthorised price cut, VMware is seeking an order to prevent Computer Gross from continuing separate civil proceedings in Milan, the claim says.

Computer Gross breached a jurisdiction clause in its contract with VMware when it asked the Italian court to confirm that it did not owe VMware compensation over the software deal, according to the claim.

Allstate Insurance Company has accused Broadcom of haphazardly issuing audits against it because the insurance firm decided not to renew its contracts with VMware and CA Technologies.

The allegations were made in relation to a lawsuit that VMware filed against Allstate in December 2025, according to The Register. In the complaint, Broadcom alleges that Allstate failed to comply with license audits, which Broadcom claims its contract with Allstate requires.

In a June 12 filing, Allstate suggested that Broadcom issued the audits in response to Allstate deciding to end business with its companies. Allstate’s statement reads:

After 5+ years of Flexera’s State of ITAM report, one thing’s clear: there’s no shortage of daily challenges faced by ITAM teams. Business units now buy applications directly. Teams experiment with unsanctioned AI tools. Free trials turn into paid subscriptions. All while overlapping apps stack up across departments. All of this rolls up under SaaS sprawl.

SaaS sprawl isn’t about having too many tools. It’s about losing control over: