Custom software vs SaaS: when building pays off

The three-year sum

Put both options on one page, over three years:

SaaS total = monthly subscription × 36, plus add-ons and integrations, plus the staff time spent on workarounds, plus expected price rises.

Custom total = the build, plus hosting and software paid to providers, plus support or changes you expect to need.

Whichever total is lower, then ask the second question: which one fits the way you work? A cheaper tool that forces three spreadsheets alongside it is not cheaper.

A worked example

These are example figures to show the method, not a quote. Put your own numbers in.

	SaaS	Custom
Upfront	£0	£20,000 build
Monthly	20 users × £60 = £1,200	Hosting and services, say £150
Three years of fees	£43,200	£5,400
Workarounds	3 hours a week of manual copying	Built into the software
Three-year total, before staff time	£43,200	£25,400

In this example the custom build costs less by the second year, and the gap grows with every user you add. With five users instead of twenty, the SaaS total would be £10,800 and the subscription wins easily.

When SaaS is the right answer

• A product already fits your process without workarounds.
• You have a small team, so per-user pricing stays low.
• The process is standard in your industry: accounts, payroll, email.
• You need it working this week.
• You would rather not own anything that needs maintaining.

Use SaaS for the standard parts of your business. Almost every business should.

When custom software pays off

• Per-user fees add up. Many staff, clients or partners need logins.
• You are paying for workarounds. Spreadsheets, copy-and-paste and two tools doing half a job each.
• Your process is your advantage. The way you deliver is what clients pay for, and a generic tool flattens it.
• You need several roles in one place. Staff, clients and partners each seeing different views of the same work.
• You want to own the asset. Software you own can be improved, licensed or sold with the business.

TMMB Academy is a good example. They had fragmented processes and rising software subscriptions, and now run creators, coaches, sales, courses, payments and brand deals in one portal with six roles. The TMMB Academy case study has the details.

The costs people forget

With SaaS: price increases at renewal, paying for seats that are barely used, add-ons for features you assumed were included, and the cost of leaving if your data is hard to export.

With custom: hosting and service bills, keeping software and security up to date, and changes as your business grows. Budget for them from the start, and make sure the code and data sit in your accounts so you are never locked to one developer.

The middle route

It does not have to be all or nothing. The common pattern is to keep SaaS for the standard jobs and build only the part that is specific to you, connected to the tools you keep. A client portal on top of your existing CRM, or an internal tool that pulls from your accounts software, often gives most of the benefit for a fraction of a full rebuild. See our internal tools and web apps and SaaS builds pages.