"Custom software is more expensive than off-the-shelf SaaS." That statement is true – and at the same time not true. At first sight a one-off investment of €4,900 to €39,000 stands against manageable monthly licence fees. On second sight the picture often looks different. This article shows what an honest ROI comparison looks like – with a concrete example and all numbers on the table.
What belongs in an ROI calculation?
Many comparisons between off-the-shelf SaaS and custom development only look at the direct software costs. That falls short. An honest calculation includes at least five items:
- Acquisition costs (licence, setup, development)
- Recurring costs (per-user licences, hosting, maintenance)
- Personnel costs (training, time spent operating it, corrections)
- Opportunity costs (time lost to workarounds)
- Risk costs (lock-in, price hikes, vendor dependency)
Sample calculation: construction firm with 15 employees
Let's take a realistic scenario: a craft business with 15 employees, 8 of them in the field, wants to digitalise its order processing. Today: Excel, Word, an accounting tool and many phone calls.
Option A: vertical off-the-shelf SaaS
A well-known vertical SaaS for craft businesses costs €79 per user/month on the standard licence. The DATEV interface only ships from the Premium licence at €119 per user. We assume 12 active users (office + field), Premium because of DATEV.
| Item | Year 1 | Year 2 | Year 3 | Years 1–3 |
|---|---|---|---|---|
| Setup & training | €2,500 | — | — | €2,500 |
| Licences (12 × €119 × 12) | €17,136 | €17,136 | €17,136 | €51,408 |
| Annual price hike 8% (industry average) | — | +€1,371 | +€2,853 | +€4,224 |
| Workarounds (estimated 4 h/week) | €9,984 | €9,984 | €9,984 | €29,952 |
| Total | €29,620 | €28,491 | €29,973 | €88,084 |
Workaround estimate: 4 hours per week × 48 working weeks × €52/h average blended rate = €9,984/year.
Option B: custom SaaS development
We build a tailored solution with measurement capture, quote/invoice generator, DATEV export, mobile site app and material/time tracking. Fixed price: €19,500 one-off. Hosting + maintenance: €199/month. Unlimited users.
| Item | Year 1 | Year 2 | Year 3 | Years 1–3 |
|---|---|---|---|---|
| Development (one-off) | €19,500 | — | — | €19,500 |
| Hosting + maintenance (€199 × 12) | €2,388 | €2,388 | €2,388 | €7,164 |
| Remaining workarounds (1 h/week) | €2,496 | €2,496 | €2,496 | €7,488 |
| Training & onboarding | included in fixed price | — | — | — |
| Total | €24,384 | €4,884 | €4,884 | €34,152 |
Comparison over 3 and 5 years
| Option | Total 3 years | Total 5 years (estimated) |
|---|---|---|
| Vertical off-the-shelf SaaS | €88,084 | ~€152,000 |
| Custom SaaS | €34,152 | ~€54,000 |
| Difference | −€53,932 | −€98,000 |
Over 3 years the custom solution saves about €54,000 in this example. Over 5 years almost €100,000. The break-even sits around 14 months.
When the comparison flips
This calculation is not universal. There are setups where off-the-shelf SaaS is clearly the better economic choice:
- Very few users (1–3 employees) keep licence costs low
- Highly standardised processes hardly cause workarounds
- Short usage horizons (< 18 months) don't justify the upfront investment
- Very simple tasks (e.g. only newsletters) have proven standards
What the calculation does NOT show – but matters
Strategic value
Tailored software encodes your competitive advantage and makes it scalable. Off-the-shelf SaaS encodes what everyone has. That value is hard to translate into euros – but customers feel the difference.
Employee retention
Employees working with well-made, tailored software are happier. That reduces turnover and sick days – both very expensive items.
Data sovereignty
With custom SaaS the data – and (on request) the code – belong to you. With off-the-shelf SaaS you "rent". In a crisis that's a substantial difference.
Conclusion
The simple statement "off-the-shelf SaaS is cheaper" only holds for the first 12 months and only with small teams. Once you have 8–10 users, build workarounds regularly or need a vertical SaaS with Premium licences, the maths flips. Over 3 to 5 years custom development pays off in most SME scenarios.
The honest recommendation: do the maths yourself, with your own numbers. We are happy to help – with an open comparison for your specific situation.
We will produce a free, individual ROI calculation for your situation. Tell us what you use today, how many users you have and what you need – we'll compare off-the-shelf and custom transparently.