This is exactly the trap companies fall into. They see a solution ready to buy and think, "Oh we can build that ourselves for cheaper." The thing is, they can't. I worked in a niche of the medical industry and we saw this so much we made a white paper on it. The number of times people decided to build something themselves and came back to us in a year was amusing. They don't realize:
1. The amount of man hours necessary to build a reliable, effective system.
2. The expertise and insight needed to make it actually solve the problem.
3. The ongoing costs of maintenance, adding features, and support.
So, in my opinion, it's not that the market isn't functioning it's just that most companies are delusional about what it costs to build a complex software tool.
Well...yes and no. For example, page scraping is something I have been pricing recently. The companies I have spoken to cost WAY more than it would cost me to build...because I need one simple solution with limited accuracy...but their company is built around an advanced high accuracy solution. The off the shelf thing is rarely the simplest thing possible, because once they built that they had to keep adding features and engineers and costs :)
In the area I'm most family with, (business applications), many, many systems/applications are basically relatively simple CRUD apps with reporting and dashboard features, and maybe a bit of work flow management.
With the rise of low-code tools/platforms, building such apps is almost trivial. So, the make versus buy decision is not as straightforward as it once might have been, especially for companies who already might have developers on staff.
1. The amount of man hours necessary to build a reliable, effective system.
2. The expertise and insight needed to make it actually solve the problem.
3. The ongoing costs of maintenance, adding features, and support.
So, in my opinion, it's not that the market isn't functioning it's just that most companies are delusional about what it costs to build a complex software tool.