The comparison most teams make is a build quote against an annual licence fee, which is not a comparison at all. A fair model includes licence escalation, per-seat growth, integration and customisation work, internal administration, the cost of workarounds where the product does not fit, and eventual switching cost. On the build side it includes maintenance, hosting, and iteration. The tool models both paths on the same basis so the numbers are genuinely comparable.
Both paths modelled over three and five years. Buying usually wins year one and the picture frequently changes by year three, which is the horizon most decisions actually need.
Vendor pricing rises and headcount changes. A model using today’s seat count at today’s price understates the buy path by a meaningful margin over five years.
Off-the-shelf products still need configuring and connecting. Our API integration services work is routinely required on bought solutions, and that cost belongs in the buy column.
Where a product does not match how you work, staff absorb the gap. That labour is a real recurring cost and the one most consistently omitted from buy-side analysis.
Custom software carries hosting, patching, and iteration cost. The calculator applies a realistic annual maintenance share rather than treating build as a one-time expense.
Each input changes the outcome materially, so estimates are better than blanks. Where you are uncertain, enter a range and the tool will show the sensitivity. Two inputs dominate the result more than the others, which are process fit and expected lifespan. A product fitting your process closely and a short expected lifespan both favour buying strongly, while poor fit over a long horizon is where custom development usually wins.
Current seats plus expected growth over five years. Per-seat licensing makes this the single largest driver of long-term buy cost.
Annual per-seat or platform price, plus a realistic escalation assumption. Historic vendor increases are a better guide than contracted caps that expire.
Honestly estimate what share of your required workflow the product covers natively. Below a certain threshold, workaround cost overtakes the licence saving.
A scoped estimate for custom development. Our custom software development scoping produces this figure, and using a guess here weakens the whole comparison.
Blended cost for the staff who will administer, work around, or maintain the system. Labour is where hidden cost accumulates on both paths.
How long you expect to need this capability. Short horizons favour buying, long horizons favour ownership, and the crossover point is what the tool locates.
The model is deliberately transparent so you can challenge it. Buy-side cost is licence spend across the horizon with escalation applied, plus implementation, plus recurring integration and administration, plus workaround labour derived from your process fit input. Build-side cost is the development estimate, plus annual maintenance as a share of build value, plus hosting, plus iteration. The output shows cumulative cost by year and identifies the crossover point where the cheaper path changes.
Licences compound with escalation and seat growth. Implementation and integration are front-loaded, while administration and workaround labour recur every year without ending.
Development is front-loaded, then maintenance runs at a proportion of build value annually. Our legacy software modernisation work informs the maintenance rates the model applies.
Process fit below full coverage generates manual effort. The tool converts the gap into annual hours at your labour rate, which is usually the largest hidden buy-side cost.
The year at which cumulative build cost falls below cumulative buy cost. If that year sits beyond your expected lifespan, buying is the correct decision.
The tool shows how the crossover shifts with seat growth and process fit, since those two inputs carry the most uncertainty and the most influence over the outcome.
A cost model informs a decision, it does not make one. Several decisive factors resist quantification and need weighing separately. Teams that treat the calculator output as conclusive sometimes build things they should have bought, or buy things that constrain them competitively. Read the number alongside the considerations below rather than instead of them, particularly where the two paths finish close together.
If the capability is how you win business, owning it matters beyond cost. Buying the same product as your competitors means competing on execution alone.
Buying delivers capability in weeks and building takes months. Where the delay carries real business cost, that gap can outweigh a favourable long-term build case.
Pricing changes, roadmap decisions, acquisitions, and discontinuation are outside your control. Data extraction and migration on exit is a cost worth estimating before entry.
Custom software needs someone accountable for it long term. A dedicated development team covers this, but the ongoing commitment must be genuine.
Buying a platform and building differentiating extensions on top often beats either extreme. The calculator can model this by combining a reduced licence scope with a smaller build.
The output is a directional answer with a confidence range, not a verdict. Treat a difference under roughly fifteen percent as effectively a tie, in which case the qualitative factors decide. A clear result in either direction is worth acting on, but verify your two most influential inputs first, since process fit and build estimate are both commonly wrong in the direction the person filling in the form already preferred.
Within fifteen percent, the model cannot distinguish the options reliably. Decide on differentiation, time to value, and vendor risk instead of forcing the numbers to choose.
A guessed development figure invalidates the comparison. A properly scoped estimate is the single highest-value input to improve before relying on the output.
Ask the people who will use the system daily rather than the person evaluating it. Optimistic fit assessments are the most common source of a wrong buy decision.
Buying now and building later once requirements are proven is often sensible. Our MVP development approach suits validating a custom path without committing to a full build.
Set a review date. Licence increases, seat growth, and product roadmap changes can move a decision that was correct when made two years earlier.
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Buy when the capability is standard, your process fits the product closely, and time to value matters. Build when the capability differentiates you competitively, your process differs meaningfully from available products, or long-term licence costs exceed development and maintenance over your expected horizon.
On the buy side: licence escalation, seat growth, integration work, ongoing administration, workaround labour where the product does not fit, and exit or migration cost. On the build side: annual maintenance, hosting, and continuous iteration. Both sides get understated in typical analyses.
At least five. Buying almost always wins year one, and the picture frequently reverses by year three as licences compound with seat growth. A one-year or three-year comparison systematically favours buying and is the most common analytical error here.
Typically fifteen to twenty-five percent of original build value annually, covering hosting, security patching, dependency updates, and iteration. Legacy platforms with ageing dependencies can exceed thirty percent, which is often the point at which rebuilding becomes cheaper than continuing.
Often, yes. Licensing a platform for commodity capability and building only the parts that differentiate you keeps costs contained while preserving competitive advantage. It requires good integration foundations, but it usually outperforms committing entirely to either extreme.
Directional rather than precise. Accuracy depends almost entirely on two inputs, which are your build estimate and your honest process fit assessment. A properly scoped development estimate and input from actual daily users make the output substantially more reliable.
Tell us what you’re building. Our team will get back to you within one business day with a clear, no-obligation plan.
