Should you build custom software or buy an off-the-shelf SaaS solution? Enter your costs and requirements below to get a side-by-side comparison with break-even analysis.
The build vs buy decision is one of the most consequential choices a technology team makes. This calculator models the total cost of ownership for both approaches over your selected timeframe, accounting for factors that are often overlooked: annual SaaS price increases (typically 5-10% per year), ongoing maintenance costs for custom software (15-20% of initial build cost annually), and integration complexity.
Building custom software makes financial sense when your long-term costs with SaaS exceed the initial development investment plus maintenance. Beyond cost, there are strategic reasons to build:
Buying SaaS is typically the right choice for non-core business functions where speed and proven reliability matter more than customization:
Both approaches have hidden costs. SaaS pricing typically increases 5-10% annually, and per-seat models can become expensive at scale. Custom software requires ongoing maintenance (typically 15-20% of initial build cost per year), infrastructure costs, and the opportunity cost of developer time. Our calculator factors in these hidden costs to give you a more realistic comparison.
Struggling with this decision? Our software development consultants can help you evaluate your specific requirements and make a data-driven choice. See also our software development cost estimator for a detailed build cost breakdown.
Industry data shows enterprise SaaS vendors typically increase pricing by 5-10% annually. We use 8% as a moderate estimate. Some vendors increase by more, especially when migrating customers to new product tiers or platforms. This compound effect significantly impacts total cost over 5-10 year horizons.
The 18% annual maintenance estimate covers bug fixes, security patches, dependency updates, minor feature enhancements, infrastructure monitoring, and technical debt management. It does not include major new feature development, which would be scoped as a separate project.
Absolutely. Many organizations use SaaS for standard functions (email, CRM, HR) and build custom software for their core differentiating capabilities. Our consulting team can help you identify which components to build versus buy for your specific situation.