SaaS tools are convenient but expensive at scale. Custom software is powerful but needs investment. The right choice depends on your specific situation. Here's a framework to decide.
The true cost comparison
SaaS pricing looks cheap at first — £50/user/month seems affordable. But multiply that by 20 users, 12 months, and 5 tools, and you're spending £60,000/year. Every year. Forever. And that's before add-ons, integrations, and premium features.
Custom software has a higher upfront cost (typically £5,000–£30,000 depending on complexity) but minimal ongoing costs (hosting and maintenance at £50–£300/month). The crossover point — where custom becomes cheaper — is usually 12–24 months.
When SaaS wins
- Commoditised functions — email (Gmail), accounting (Xero/QuickBooks), payments (Stripe). These are best-in-class and would be foolish to replicate.
- Small teams (1–5 people) — per-seat pricing hasn't become painful yet.
- Standard workflows — if the SaaS tool's way of doing things matches your process perfectly.
- Rapid prototyping — when you're testing a process and don't know if it'll stick.
When custom wins
- Unique processes — your business does things differently from the generic template. Custom business software fits your process, not the other way around.
- Growing teams — per-seat pricing punishes growth. Custom software costs the same whether you have 10 or 100 users.
- Competitive advantage — if your software is a differentiator, owning it matters.
- Data ownership — your data stays in your systems, under your control.
- Integration needs — when you need systems to talk to each other seamlessly.
The hidden costs of SaaS nobody mentions
- Workaround time — the hours your team spends working around SaaS limitations
- Vendor lock-in — switching costs increase over time as your data accumulates
- Feature bloat — paying for features you'll never use while missing the one you need
- Price increases — SaaS vendors regularly increase prices, and you have no negotiating power
- Integration tax — connecting SaaS tools together often costs £100–£500/month in middleware subscriptions
Read more about why businesses are replacing SaaS with custom-built alternatives.
The modern approach: custom + best-of-breed SaaS
The smartest approach isn't all-or-nothing. Keep the SaaS tools that genuinely earn their subscription (accounting, email, payments). Build custom for everything unique to your business. Connect them with AI workflow automation.
The result? Lower total cost, better fit, and systems that grow with your business instead of holding it back.
Want to compare the costs for your business?
Use our savings calculator to compare SaaS spend vs custom, or book a free consultation for a detailed analysis.
