Should you buy off-the-shelf SaaS or commission custom software? It’s the most common question I’m asked. The honest answer is “it depends,” but it depends on a small number of clear factors. This guide gives you a complete decision framework.
The Short Version
- Choose SaaS when your process is generic, your team is small, your data volume is low, and the per-user cost stays manageable.
- Choose custom when your process is specific, you’re paying for SaaS features you don’t use, your team is growing, or no off-the-shelf product fits well.
Total Cost of Ownership Over 5 Years
The single biggest mistake is comparing a one-off custom build cost against the first year of SaaS subscription. The fair comparison is over 5 years.
| Cost Item | Off-the-Shelf SaaS | Custom Software |
|---|---|---|
| Initial setup | £0–£500 | £500–£5,000 |
| Year 1 subscription / hosting | £30–£100/user/month | £0–£120/year |
| Years 2–5 subscription | Same, often increasing | £0–£120/year hosting |
| Customisation | Limited; often impossible | Unlimited (you own the code) |
| Team of 10 over 5 years | ~£30,000 | ~£3,000 |
SaaS pricing scales with team size. Custom software cost is independent of headcount.
Flexibility
SaaS is rigid. You get the features the vendor builds, in the order they prioritise them. If your process needs a small but specific change, you have no realistic recourse beyond writing a feature request and waiting (often forever).
Custom software is flexible by definition. The system reflects exactly how your business operates.
Lock-In and Data Ownership
SaaS vendors own your data infrastructure. If they raise prices, change their product, or go out of business, you can find yourself in a difficult position. Migration out is usually painful.
Custom software puts you in control. You own the code, the database, and the hosting account. If you need to change developer or move providers, you can.
Speed of Initial Setup
SaaS wins on initial speed. You can sign up and start using a CRM, helpdesk, or accounting tool within hours. Custom software typically takes days or weeks before the first usable version exists.
Risk Profile
SaaS risks: vendor lock-in, price hikes, feature removal, data ownership disputes, support quality.
Custom software risks: developer dependency for changes, hosting reliability, security responsibility, smaller user community for “how do I…” questions.
When Custom Software Wins Decisively
- Your process is genuinely specific and no SaaS fits cleanly. See the symptoms of an outgrown spreadsheet.
- You’re paying £500+/month for SaaS and using only a fraction of the features.
- You have 10+ users and the per-seat model is hurting you.
- You’re currently using 3+ separate SaaS tools that could be a single integrated system. See the consolidation guide.
- You need exclusive ownership of data or workflow IP. See software ownership explained.
When SaaS Wins Decisively
- Your process matches a standard pattern (basic CRM, basic accounting, basic helpdesk).
- You have under 5 users.
- You don’t want to manage hosting, updates, or any technical responsibility.
- You’re testing whether a process should exist at all — SaaS lets you experiment cheaply.
The Hybrid Answer
Many businesses run on both. Use Xero for accounting (SaaS), use Gmail for email (SaaS), use a custom-built application for the operational workflow that’s actually unique to your business (custom). The decision isn’t all-or-nothing.
How to Decide
- List the three or four most important software tools you use today.
- For each, estimate annual cost (subscription × users × 12).
- Score each on fit (1–10) for how well it matches your actual process.
- The combination of high cost and low fit signals a candidate for custom replacement.
Need a Decision Made?
I’m happy to give you a quick honest opinion on whether your specific situation favours SaaS or custom. Send a quick description of your problem and I’ll come back with a real answer (including “stick with what you have” if that’s the right call).
Got a Spreadsheet That's Driving You Mad?
Send it over — I'll tell you what an app version would look like and what it'd cost. No obligation.