BUILD VS BUY

Custom software vs SaaS

When does buying off-the-shelf SaaS beat building custom? When does the opposite? An honest, written-by-people-who-build-both comparison.

TL;DR — the honest answer

SaaS wins when your needs are common, your scale is modest, and your budget is opex-only. Custom wins when your workflow is differentiated, your seat count is growing, or you've outgrown what configuration can do. Most businesses end up using both — SaaS for commodity functions (email, accounting), custom for the workflows that are the business.

9 factors, side-by-side

Where each model genuinely wins.

Factor
SaaS
Custom
Upfront cost
Low or zero — typical SaaS starts at $0–$500/mo✓ Wins
Higher — typical builds $15k–$150k one-time
Cost at scale (5 years)
Compounds with seats & features — $50–$500k+ for mid-size teams
Mostly flat — one-time build, optional $1.5–4k/mo maintenance✓ Wins
Per-seat tax
Yes — every new hire adds cost
No — pay once, unlimited seats forever✓ Wins
Time to live
Hours to days✓ Wins
4–12 weeks typical
Fit to your workflow
You adapt to the software
The software adapts to you✓ Wins
Code & data ownership
Vendor owns code; data export limited
You own everything — code, data, deployment✓ Wins
Vendor lock-in risk
High — migrating off SaaS is painful
None — you control everything✓ Wins
Integration flexibility
Limited to what the vendor supports
Any system with an API or DB✓ Wins
Compliance & data residency
Whatever the vendor offers (often US/EU only)
Deploy anywhere — your region, your servers, your rules✓ Wins

When SaaS is the right call

  • Your need is universal — email, video calls, accounting, payroll, basic CRM.
  • Team is under ~15 seats and growth is slow.
  • You have no engineering capacity and no plans to add it.
  • Time-to-value matters more than long-term cost.
  • The workflow is genuinely commodity — you'd do it the same way as everyone else.

When custom is the better bet

  • The process is your competitive advantage — generic SaaS levels the playing field with competitors.
  • Per-seat SaaS bills are growing faster than headcount.
  • You're stitching 4+ SaaS tools together with workarounds.
  • Data residency, compliance, or sovereignty requirements rule out US/EU SaaS.
  • You need integrations the SaaS vendor refuses to build.
  • You've quietly stopped using 60% of the SaaS features you pay for.

The 5-year cost math nobody shows you

Worked example: 25-seat team using a typical ops SaaS at $80/seat/mo.

SaaS — Year 1
$24,000
25 × $80 × 12
SaaS — Year 5
~$165k
Assuming 8% annual price hike + 10 new seats
Custom — Year 1
$55,000
Typical mid-complexity build
Custom — Year 5
~$95k
+ ~$8k/yr light maintenance

Breakeven is around month 30. After that, every additional year saves ~$25k+ that compounds while SaaS pricing keeps climbing. Most custom builds pay for themselves before they're 3 years old.

Quick decision matrix

Need a tool everyone uses (email, accounting, comms)SaaS
Workflow is generic and unlikely to changeSaaS
Under 10 seats, growing slowlySaaS
No engineering capacity, no plans to addSaaS
Need it live this weekSaaS
SaaS bill grows faster than headcountCustom
Stitching 4+ tools with manual workaroundsCustom
Have an actual competitive workflowCustom
Compliance / sovereignty rules out US SaaSCustom
Vendor keeps refusing the integration you needCustom
Existing SaaS missing >40% of what you needCustom

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