Investing.com — IBM, ServiceNow, and Salesforce shares are down in premarket trading on Thursday after a report that Starbucks is developing in-house software using artificial intelligence that could replace applications it currently buys from outside vendors. <\/p>\n
IBM shares have dropped 3%, ServiceNow has fallen 3.5% and Salesforce has declined 4% ahead of the open. <\/p>\n
The coffee chain is said to be building alternatives to a Microsoft system that tracks inventory and an IBM tool that manages maintenance, and some of the Starbucks-developed software could roll out by the end of next year, pending testing results, Bloomberg reported, citing an internal presentation. <\/p>\n
Starbucks spends about $400 million a year on software, and Chief Technology Officer Anand Varadarajan told workers earlier this year there are “clear opportunities to reduce the spend in software,” according to a recording of an internal meeting reviewed by Bloomberg. <\/p>\n
The company is reportedly reviewing “every contract and service” as part of a broader effort to cut $2 billion in costs, according to the presentation. <\/p>\n
Starbucks has also been working for several years on a point-of-sale system to replace Oracle Simphony, according to Bloomberg sources. <\/p>\n
Furthermore, the report states that the Starbucks enterprise technology team is on track to cut its budget by about $30 million in the fiscal year ending in late September, including roughly $10 million in software spending, the presentation showed. <\/p>\n
The news adds to broader concerns facing software companies over competition from AI-built products developed by upstarts or their own customers, a trend that has weighed on software stocks this year. <\/p>\n
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