Custom Software vs SaaS: The True Cost Comparison

Every business faces the build vs. buy decision when it comes to software. The SaaS model has dominated the conversation for years, promising lower upfront costs and easy implementation. But is it really the better deal?

The Hidden Costs of SaaS

SaaS pricing looks attractive at first glance. $50 per user per month seems reasonable until you do the math:

• 50 users × $50/month = $2,500/month
• Annual cost: $30,000
• 5-year cost: $150,000
• 10-year cost: $300,000

And that's before considering:

• Annual price increases (typically 5-15% per year)
• Premium feature tiers you'll eventually need
• Integration costs with other systems
• Data export fees if you ever want to leave
• Customization limitations that require workarounds

The Custom Software Investment

Custom software requires a larger upfront investment, but the economics change dramatically over time:

• Initial development: $75,000 - $150,000 (depending on complexity)
• Annual maintenance: $5,000 - $15,000
• 5-year total: $100,000 - $225,000
• 10-year total: $125,000 - $300,000

The break-even point typically occurs between years 3-5, after which custom software becomes increasingly cost-effective.

Beyond the Numbers: Strategic Value

Cost comparison tells only part of the story. Custom software provides strategic advantages that SaaS simply cannot match:

1. Competitive Differentiation

Your competitors use the same SaaS tools you do. Custom software built around your unique processes becomes a competitive moat.

2. Perfect Fit for Your Workflows

Instead of adapting your business to software limitations, custom solutions adapt to how you actually work.

3. Data Ownership and Control

Your data lives on your infrastructure. No vendor lock-in, no surprise policy changes, no access fees.

4. Unlimited Scalability

Add users without adding costs. Scale without per-seat pricing eating into your margins.

When Custom Software Makes Sense

Custom development is the right choice when:

• You have 20+ users who will use the system daily
• Your processes are unique to your industry or company
• You're currently using multiple SaaS tools that don't integrate well
• You're spending $2,000+ monthly on software subscriptions
• You need features that no off-the-shelf solution provides
• Data privacy and ownership are critical to your business

When SaaS Makes Sense

To be fair, SaaS is often the right choice when:

• You're a small team (under 10 users)
• Your needs align perfectly with existing solutions
• You need to be operational immediately
• The software category changes rapidly (like social media tools)

Making the Decision

The choice between custom software and SaaS isn't just about cost—it's about what kind of company you want to build. Do you want to rent your operational backbone, or own it?

At Aslan, we help businesses make this decision with clear-eyed analysis of their specific situation. Sometimes we recommend SaaS solutions. But when custom software makes sense, we build systems that our clients own completely—code, data, and all.