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 predicts that by 2028, 70 percent of enterprises will abandon agentic AI systems built with vendor assistance as costs climb and customers struggle to modify the technology without outside help.

What the consultancy calls forward-deployed engineering (FDE) embeds a vendor's engineers with a customer to build and deploy software for its particular requirements. Gartner argues that the model can deliver rapid early progress but leave customers dependent on expensive external expertise.

According to Gartner, FDE engagements can fail when customers do not acquire the knowledge and control needed to maintain and develop the resulting systems after the vendor leaves.

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FDE "success starts with getting the engagement structure right, from scope and incentives to governance, ownership, and exit," said Gartner senior director analyst Mukul Saha.

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"The best-scoped FDE engagements have clear guidelines on governance, business value delivery, IP ownership, project co-ownership, knowledge transfer, and an exit strategy from day one," he added.

"Many providers now use 'forward deployed' as a label for implementation, professional services, solution engineering, or AI consulting; some thoughtfully, others because it sounds more strategic. Some charge premium fees without the delivery depth, program management, or change management maturity to justify them."

The AI industry promising outcomes it can't deliver? Perish the thought.

Gartner advises software engineering leaders to use FDE only for problems requiring deep product expertise, rapid adaptation, or close integration between the vendor's technology and the customer's operating environment.

Otherwise, customers may see rapid early progress without building the internal capabilities needed to take control. They could then end up paying premium rates for work that a traditional services or partner model might deliver more cost-effectively and predictably.

Gartner also predicts that through 2028, fewer than 20 percent of FDE engagements will turn recurring customer requirements into features in the vendor's core product. It warns of a growing risk of "FDE washing," in which conventional consulting services are marketed as something more specialized.

This isn't the first time that Gartner has warned of the potential costs and pitfalls of AI projects.

Earlier this year, it forecast that at least half of generative AI projects will exceed their budgets due to poor architectural choices and lack of operational know-how, while most organizations that try to build custom models will abandon them for similar reasons.

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It also said it expects 40 percent of AI agent deployments would be scaled back or decommissioned as organizations run into governance problems with the technology.

More recently, the analyst predicted that nearly a third of employees laid off because of AI will need to be rehired again at a future date, often at significantly higher cost. ®