7 in 10 enterprises expected to abandon vendor-built agentic AI by 2028
Build it, bill it, bin it as forward-deployed engineering leaves customers dependent on outside expertise
Gartner forecasts that by 2028, 70% of businesses will abandon AI systems developed with vendor assistance due to escalating expenses and difficulties in modifying the technology without external aid. Known as forward-deployed engineering (FDE), this model involves embedding the vendor's engineers with a customer to design and deploy software tailored to their specific needs.
While the model can expedite initial progress, Gartner warns that it may result in customers becoming reliant on costly outside expertise. According to Gartner, FDE projects can falter if customers fail to acquire the necessary knowledge and control to maintain and enhance the systems post-vendor departure. Successful FDE engagements hinge on establishing proper engagement structures, encompassing scope, incentives, governance, ownership, and an exit strategy.
Gartner senior director analyst Mukul Saha emphasizes that engagements should have clear guidelines on governance, business value delivery, intellectual property ownership, joint project ownership, knowledge transfer, and an exit plan from the outset. Many providers now label their implementation, professional services, solution engineering, or AI consulting as "forward deployed."
However, some charge premium fees without delivering the required depth of service, program management, or change management capabilities. Gartner advises software engineering leaders to utilize FDE only for projects demanding deep product expertise, rapid adaptation, or close integration between the vendor's technology and the customer's operating environment.
Otherwise, customers might experience swift initial gains without establishing the required internal capabilities to assume control, potentially resulting in paying premium rates for work that a conventional services or partner model could accomplish more cost-effectively and reliably. Gartner projects that by 2028, fewer than 20% of FDE engagements will convert recurring customer requirements into features within the vendor's core product.
The consultancy also cautions of a rising risk of "FDE washing," where traditional consulting services are marketed as more specialized offerings. This is not Gartner's first warning regarding the potential costs and pitfalls of AI projects. Earlier this year, the consultancy predicted that at least half of generative AI projects would exceed their budgets due to poor architectural decisions and insufficient operational expertise, while most organizations attempting to build custom models would abandon them for similar reasons.
Additionally, Gartner expects 40% of AI agent deployments to be scaled back or discontinued as organizations encounter governance challenges with the technology. Recently, Gartner forecasted that nearly a third of employees who lose their jobs due to AI will likely be rehired in the future, often at significantly higher costs.
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