Negocio 6 min
Custom software vs. off-the-shelf: which one suits you?
When a packaged SaaS is enough, when custom software pays for itself, and how to calculate the break-even point for your company.
The right question is not which is better, but when each one is better. It depends on three variables: differentiation, scale and control.
Off-the-shelf software (SaaS): when yes
- The process is generic (basic CRM, accounting, email)
- The monthly cost is marginal compared to the value
- It is not a competitive core of your business
- You need speed of implementation (less than 4 weeks)
Custom software: when yes
- Your process IS your competitive advantage
- Existing SaaS force you to change your operation
- You already pay for 3+ tools that do not talk to each other
- You need specific integrations or business rules
- Your scale makes monthly licenses explode
The break-even point
Rule of thumb: if the annual cost of your SaaS + manual integration hours exceeds USD 15,000/year, a custom development pays for itself in 12-18 months and is then yours.