SaaS vs custom software
SaaS vs custom software: which one to buy or build. The answer depends on how unusual your process is and how long you will run the tool.
SaaS vs custom software is a choice between renting a finished tool and owning one built around your process. SaaS is live in days, costs little to start and is maintained by the vendor. Custom software costs more up front but fits your workflow exactly and belongs to you.
Start with SaaS when your process is standard and a good tool already exists. Build custom when the software is part of how you win, when no product fits, or when subscriptions for many users add up to more than a build. Many companies run SaaS for common needs and custom software for the one process that sets them apart.
Side by side
| Capability | SaaS | Custom software |
|---|---|---|
| Time to start | Days: sign up and configure | Months: design, build and test |
| Upfront cost | Low or none | Higher: you fund the build |
| Running cost | Subscription, often per user per month | Hosting and maintenance, no per-seat licence |
| Fit to your process | You adapt to the product | The product adapts to you |
| Features | Whatever the vendor ships, including ones you never use | Only what you ask for |
| Integrations | Limited to what the vendor supports | Built to connect to your other systems |
| Ownership | You rent access; the vendor controls the roadmap | You own the code and the roadmap |
| Data and exit | Export options vary, switching can be painful | Your data sits where you decide |
| Maintenance | Vendor handles updates and hosting | You or a partner maintain it |
What each one is good at
SaaS
- Live quickly with no build risk
- Low entry cost and easy to cancel
- Updates, security and hosting are the vendor's job
- Proven by many other users
- Costs grow with every user you add
- You cannot change what the product does
- A price change or shutdown is out of your hands
Custom software
- Matches your real workflow with no workarounds
- No per-seat licence as the team grows
- Connects cleanly to your other systems
- An asset you own and can build on
- Higher upfront investment
- Takes longer before anyone can use it
- Needs ongoing maintenance and a reliable team
Choose SaaS when
- Your process is common and several good products already cover it
- You need to be running quickly with a small budget
- You have no one to maintain software
- The tool is not a competitive advantage, just a utility
- You are still learning what you need and want to stay flexible
Choose custom software when
- Your process is unusual and every product forces workarounds
- The software is part of what you sell or how you beat competitors
- Per-user subscriptions would cost more than a build over a few years
- You need deep links between several internal systems
- You want to own the code, the data and the roadmap
Questions people ask
Is SaaS vs custom software mainly a cost question?
Is SaaS cheaper than custom software?
Can I start with SaaS and move to custom software later?
Is custom software more secure than SaaS?
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