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.
Custom typically wins once per-user SaaS spend exceeds roughly $8-12k/month sustained over 3+ years, or when user counts push past 100-200 seats at $30-80/user pricing. The calculator shows your exact break-even month based on the numbers you enter.
Integration and middleware fees, premium support tiers, data egress, add-on modules charged per feature, mandatory annual price increases, vendor-mandated upgrades, and internal admin time. These can add 20-40% on top of list price.
Lock-in is a strategic cost, not a line item — weigh it when your data, workflows, or customer experience depend heavily on the vendor. If switching cost is high and the vendor controls core IP, a custom build preserves optionality even if the math looks closer.
Outgrowing mid-contract usually triggers forced enterprise upgrades (2-3x price jump) and painful data migrations. Model this in the calculator by selecting a longer timeline and higher customization level — the compounded SaaS line often exceeds a fresh build.
Yes — the 18% annual maintenance already accounts for engineering time on fixes and updates, but you should separately budget infrastructure, observability tooling, and the opportunity cost of engineers who could be shipping new product features.