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 the price rises you'd expect.

Custom total = the build, plus hosting and software paid to providers, plus any support or changes you think you'll need.

Whichever total comes out lower, then ask the second question, which is which one fits the way you work. If a cheaper tool means your team needs three spreadsheets running next to it, it ends up costing you more.

A worked example

Rough numbers, just to show how it works. This isn't a quote, so put your own in.

Compared	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 copying things by hand	Built into the software
Three-year total, before staff time	£43,200	£25,400

So in this example the custom build is cheaper by the second year, and the gap gets bigger with every user you add. With five users and not 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.
• Your team's small, so per-user pricing stays low.
• The process is standard in your industry, like accounts, payroll or email.
• You need it working this week.
• You'd rather not own anything that needs looking after.

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

When custom software pays off

• Per-user fees add up. Lots of staff, clients or partners need logins.
• You're paying for workarounds. Spreadsheets, copy and paste, and two tools each doing half a job.
• The way you work is why clients pick you. How you deliver is what clients pay for, and a generic tool squashes that.
• You need several roles in one place. Staff, clients and partners each seeing their own view of the same work.
• You want to own it. Software you own can be improved, licensed or sold with the business.

TMMB Academy is a good example. Their processes were all over the place and their software subscriptions kept going up, and now they 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: prices going up at renewal, paying for seats nobody really uses, add-ons for features you thought were included, and what it costs to leave if your data's hard to export.

With custom: hosting and service bills, keeping the 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're never stuck with one developer.

The middle route

It doesn't have to be all or nothing. What a lot of businesses do is keep SaaS for the standard jobs and only build the part that's specific to them, connected to the tools they keep. A client portal on top of the CRM you've already got, or an internal tool that pulls from your accounts software, a lot of the time gets you most of the benefit for a small slice of the cost of a full rebuild. See our internal tools and web apps and SaaS builds pages.

How is a custom build paid for?

You don't get one big bill on day one. We normally do half upfront and half on launch, and the signed scope sets the terms for each project. Running costs like hosting and software go straight to the providers from your own accounts. Ongoing support is optional, on a monthly retainer priced separately.

Put those three lines into the custom column of your three-year sum. Our approach page explains what happens at each stage.