The Software-as-a-Service (SaaS) revolution has created software tools for nearly all business functions. For example, virtually everyone now uses off-the-shelf software in a few common business scenarios, including standardized backend processes such as HR, finance, accounting, project management, CRMs, ERPs, and more.
The beauty of SaaS is that it's already created based on the uses of others like you. This means you don't have to figure out what features you need or to pay (and wait) for everything to be built for you. Everything is packaged into a monthly cost for usage. This allows businesses of every size to access some of the most powerful tools available.
But often as companies evolve and grow, they become very frustrated with their SaaS solutions.
This frequently leads to the dreaded software build vs. buy dilemma. Should we continue to buy software that’s easy but inflexible and expensive? Or should we take it on ourselves to design and own something that fits our exact needs (and maybe sell it as SaaS to others like us)?
Below, we’ll discuss why this build vs. buy conundrum happens and lay out a blueprint for how you can think about the decision. In addition, we’ll explain how the no-code revolution is changing this conversation, making the custom build a much more attainable option for a growing number of organizations.
Why do businesses hit a software buy vs. build dilemma?
Early on, many companies first choose ready-made SaaS solutions since their implementation can be done much faster and less expensively than traditional development. However, as the business grows and evolves, their existing SaaS may lack the features needed to solve unique problems.
As the leading no-code software agency, Airdev has worked with hundreds of companies (big and small) that have reached this critical point. The 2 biggest challenges we’ve heard from these businesses considering whether to move their core functions handled by a SaaS to a custom-built solution are:
- Rigidity: their current SaaS solution can't adapt to fit their custom needs
- Cost: Especially in cases where their SaaS charges per seat, a growing organization faces costs that scale linearly with them
When should your business develop its own software?
While SaaS solutions offer many ease-of-use advantages, there are big benefits to building your own software. The most notable benefit is custom functionality. While SaaS solutions are optimized to meet the needs of the larger audience, custom software is designed to address specific technical challenges and business use cases.
However, it’s widely understood that traditional software upgrades are expensive and often disruptive. Fortunately, the no-code revolution is changing the dynamics of this debate. It has dramatically lowered the cost to build custom software, which has tipped the scales toward "build" for a growing number of organizations.
4 factors to consider when deciding whether to buy SaaS or build custom software
With the above considerations in mind, there are 4 key factors to evaluate when deciding whether to purchase another off-the-shelf solution or build a custom solution (whether that’s through full code or no-code development):
- Financial: this is the single most important and nuanced consideration. Will your total cost of ownership be lower with a software build vs. buy? To answer this question, we recommend you evaluate the following dimensions around cost:
- Up-front build costs: What will it take to build a tool from scratch – whether that be through traditional programming or no-code? Is it possible to customize your existing SaaS tool to fit your needs, and if so, how much will that cost? Most of the initial no-code builds we work on range from $20-200k, depending on the complexity of the feature set.
Rebuilding an entire SaaS tool like Salesforce would clearly take millions of dollars, but usually companies don’t need to build everything. In fact, often the benefit of custom is to strip out lots of unused features to make things easier for your users.
- Ongoing software costs: How much do you expect to pay in licensing fees (given how much you plan to grow)? How does that compare to ongoing maintenance costs from owning your solution?
Clearly if you expect many more users, and/or if you plan to hit SaaS limits that bump you to a higher per-user tier, your ongoing costs can get high. With an owned solution, you’re typically paying a much lower hosting fee (e.g., Bubble pricing plans start at $30/mo and are usually less than a few hundred). No-code tools handle basic technical maintenance for you just like a SaaS tool, but you may need a low-level of developer support for ongoing feature tweaks and fixes.
- Ongoing business costs: Often the build vs. buy options result in slightly different software solutions, which means different costs/revenue for your business. For example, if a non-custom SaaS tool requires a full-time, in-house staff member to manually execute processes, then their cost is attributed to your cost of owning the SaaS tool. Or if your SaaS-based client portal is causing poor experiences and churn that you could address from a custom solution, that loss of revenue should also factor into your cost of ownership.
- Migration costs/timing: Migrating your existing data and operations from one tool to another can have a wide range of costs. Some functions are easily portable (just flip the switch), whereas others require extensive data migration, retraining of staff, piloting (i.e., running both tools simultaneously), etc.
Relatedly, timing can sometimes be a factor if you need to move to a new solution quickly – this is often less of a factor for businesses with ongoing operations, since anytime is a good time to migrate. No-code can help in this case, since it’s fast to build and can connect to other data sources to make migration easier.
- Selling your software: In some cases, businesses want to turn their cost into revenue by selling their software to other businesses as a SaaS tool. If you have this in mind, you can imagine offsetting some of the other costs associated with the build option.
- The value of ownership: For some organizations, developing and owning a software that solves their unique business problems is a strategic move. It empowers them to unlock new opportunities to compete – in ways where commercial off-the-shelf SaaS will always lag with its one-size-fits-all functionality.
For example, custom software can allow you to offer a better client experience (and market against that), be more nimble in an industry that evolves quickly, or have the option to swim against the current (which SaaS tools always follow).
- Business risk: There is risk to both build and buy. With the SaaS buy, the risk is that you’ll suddenly hit a limitation that you need to overcome quickly and can’t. With custom build, the risk is that you’ll build the software in a poor way and it won’t deliver on its original promise. The key to the latter is working with the right software development partner and taking the right approach to the build.
- Focus: Engaging in a software build can be a big effort and very distracting from other parts of the business. You should only take that on if you have the right people and a clear enough vision for what you want.
When should you build with no-code?
If you decide that “build” is in the picture, the next sub-decision will be whether to build with no-code vs. custom code. As mentioned above, the rise in no-code tools is making custom software development much more accessible, as it’s faster and cheaper than traditional programming by a 10x margin.
To help you answer this question, refer to our other article Full code vs. no-code for an explanation of when it makes sense to use no-code, and even more specifically when you should consider building custom internal tools with no-code.
In our experience, most business software is very feasible with our no-code/Bubble approach, and the total cost of ownership can decrease by 5-10x vs. traditional code.
Ready to build with no-code/Bubble but need help?
While the no-code platform Bubble is still faster and easier than traditional development, it has a higher learning curve than some off-the-shelf no-code tools.
If you’re looking for an outside Bubble developer to help you build your custom app fast, check out our guide on how to choose the right Bubble developer or agency.