Every growing company faces this decision: keep paying for SaaS tools that sort-of-fit, or invest in custom software that fits exactly. There's no universal right answer, but there is a framework for thinking about it clearly.
The Default Should Be "Buy"
For most needs, buying (subscribing to SaaS) is the right starting point. Off-the-shelf tools are cheaper to start, faster to deploy, and maintained by dedicated teams. Don't build what you can buy — unless the cost of "buy" outweighs the cost of "build."
The question isn't whether to build custom software. It's whether you've reached the point where the total cost of SaaS — licensing, workarounds, limitations, migration risk — exceeds the cost of building something purpose-fit.
The Build vs Buy Decision Matrix
| Factor | Buy (SaaS) | Build (Custom) |
|---|---|---|
| Time to value | Days to weeks | Weeks to months |
| Upfront cost | Low (monthly subscription) | High (development cost) |
| Long-term cost | Scales with users | Scales with infrastructure |
| Customization | Limited to platform | Unlimited |
| Maintenance | Vendor handles it | Your responsibility |
| Vendor risk | High (pricing changes, shutdowns) | None |
5 Signals It's Time to Build
1. Your workaround budget exceeds your license cost
If your team spends more time working around limitations than working in the tool, the total cost has already tipped in favor of custom.
2. Per-user pricing is scaling faster than revenue
SaaS pricing that grows linearly with headcount becomes unsustainable for fast-growing companies. Custom software costs are tied to usage, not users.
3. You need the tool to be a competitive advantage
If the tool is core to your business differentiation, using the same platform as your competitors means you can never out-execute them.
4. Compliance or security requirements are non-negotiable
Regulated industries often can't meet compliance requirements with vendor-hosted SaaS. Custom gives you full architectural control.
5. You've already rebuilt the tool twice in the same platform
If you've hit the platform's ceiling and rebuilt from scratch within it, the next rebuild should be in your own code.
The Hybrid Approach
Build vs buy isn't all-or-nothing. The smartest companies use SaaS for commodity functions (email, accounting, HR) and build custom for their core differentiators (internal tools, customer-facing workflows, data pipelines).
Start with SaaS. When a specific tool becomes a bottleneck, evaluate the build option for that tool. Don't try to replace everything at once.