Custom-built Software vs Off-the-shelf SaaS

SaaS feels cheaper because the monthly fee is small. The hidden cost is the workarounds — the daily 30-minute spreadsheet export, the integration script someone wrote that breaks every quarter, the team meeting where you reconcile what three different SaaS tools think happened.

Quantify the workarounds. If they total 20+ hours/week of skilled labour, custom software typically pays back within 12–18 months and saves significant ongoing cost. If they total 5 hours/week, SaaS plus those workarounds is almost always still cheaper.

Buy commodity. Build strategic. Email, accounting, payroll, basic CRM, document storage — these are commodities. Every business uses them, none of them are competitive advantage, the SaaS market is mature and ruthless on price. Buying is the answer.

Strategic software is what makes your business different — the matching algorithm in a marketplace, the underwriting logic in a lender, the kitchen flow in a restaurant group. Building it gives you a moat. Buying generic SaaS removes that moat.

SaaS risks: vendor sells to a competitor or shuts down (rare but devastating), pricing changes unpredictably, the feature you depend on gets deprecated, data export becomes painful, the vendor’s roadmap diverges from yours.

Custom software risks: under-investment in ongoing maintenance leads to fragility, the engineers who built it leave, the technology choices age poorly, security patches lag, the system gradually becomes legacy.

Both risks are manageable with the right discipline — but they need budgeting for, on both sides.