Custom software vs SaaS: which should your business choose?
· 5 min read
We build custom software, so treat this with appropriate suspicion — and then notice that the advice below tells most readers to buy something instead. That is genuinely the right answer more often than not.
Buy when
- A packaged product covers the need without you distorting how you work to fit it.
- The process is not a competitive advantage. Payroll, accounting and email are solved problems; your version would not be better.
- You need it working next month, not next quarter.
- The total licence cost is comfortably below what building and maintaining would cost over three years.
Build when
- The process is the advantage. If how you do it is why customers choose you, generic software will flatten that.
- You are paying for several tools that each solve part of the problem, and staff move data between them by hand.
- Per-seat licensing has grown past what owning the system outright would cost.
- No product fits, and the ones that come close require changing how the business works in ways that cost more than the software saves.
- The software is the product you sell.
The middle path most people miss
The choice is rarely all-or-nothing. A common and sensible outcome is keeping the SaaS products that work — the CRM, the accounting system — and building a thin custom layer that connects them and handles the part that is genuinely specific to you. That is often a fraction of the cost of replacing everything, and it leaves the commodity problems with vendors who solve them full-time.
The costs people forget on each side
| Often overlooked with SaaS | Often overlooked with custom |
|---|---|
| Per-seat cost as headcount grows | Hosting and infrastructure |
| Price rises at renewal | Ongoing maintenance and OS updates |
| Data export difficulty if you leave | Someone must own it internally |
| Paying for modules you do not use | Security patching |
| Workarounds staff invent to cope | The build takes time before it saves any |
A practical test
Write down the process as it actually runs today, including the spreadsheet steps and the exceptions. Then trial the best packaged product against that description. If it covers it with minor compromises, buy it. If covering it means the vendor saying "most customers do it differently", you have found the reason to build.
Where the answer turns out to be neither — the packaged tool is right but it does not talk to your other systems — the work is usually integration rather than a rebuild, which is a far smaller project than either side of this argument suggests.
Working on something like this?
If any of the above describes your situation, describe it to us — no specification needed, and no obligation to proceed.