Starbucks Wants to Cut $400 Million in Software Costs. Toast Investors Should Pay Attention.
Starbucks is ditching legacy software vendors for homegrown AI tools. Here's why that could eventually benefit companies like Toast.
Overview
Starbucks (NASDAQ: SBUX) has decided it can build better software than Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM). If nothing else, it wants to save costs with a homemade version of some high-priced enterprise software platforms.
That is either visionary cost-cutting or a case study in corporate hubris waiting to happen.
Details
According to an internal Starbucks presentation reviewed by Bloomberg News, the coffee chain is developing AI-powered tools to replace a Microsoft inventory-tracking system and an IBM maintenance management platform. Starbucks spends about $400 million a year on software, and Chief Technology Officer Anand Varadarajan told employees there are "clear opportunities to reduce the spend."
Source
Originally published at www.fool.com.