When a startup or small business needs software, a big decision comes up early:

👉 Should we buy SaaS (Software-as-a-Service)?
or
👉 Should we build custom software?

Both options solve business problems — but they differ massively in:

• Cost
• Time to launch
• Ownership
• Future flexibility
• Maintenance burden

This blog breaks down the comparison so you can decide rationally — not based on marketing hype.

🧠 What These Terms Mean

SaaS (Software-as-a-Service)

Pre-built software you subscribe to:

• Cloud CRM
• Project management tools
• Accounting systems
• Helpdesk platforms

No code required, ready to use.

Custom Software

Software built specifically for your business needs:

• Tailored workflow
• Own branding
• Unique integrations

Requires developers to build and maintain.

💰 Cost Comparison: SaaS vs Custom Software

We’ll break this into initial + ongoing costs.

📍 1️⃣ Initial Cost

SaaS

💸 Typical up-front cost: ₹0 – ₹30,000
(Small setup or onboarding fee is sometimes charged.)

You can sign up in a day.

Most SaaS platforms offer monthly/yearly billing with free tier options.

Examples:

• CRM: ₹1,000 – ₹5,000/user/month
• Helpdesk: ₹800 – ₹3,000/user/month
• Accounting: ₹1,500 – ₹4,000/user/month

Initial Cost Verdict:
Low → SaaS wins.

Custom Software

💸 Typical up-front cost: ₹3,00,000 – ₹30,00,000+
(Depending on complexity)

Examples:

• Simple web app: ₹3L – ₹8L
• Mid-size enterprise portal: ₹10L – ₹20L
• Large workflow + automation system: ₹25L – ₹50L+

Time to build: 2–6 months or more.

Initial Cost Verdict:
High → Custom is expensive.

📍 2️⃣ Ongoing Cost

SaaS

💸 Recurring: ₹10,000 – ₹2,00,000+/year
(depends on users & plan)

Includes:
✔ Hosting
✔ Security
✔ Backups
✔ Updates
✔ Support

No technical team needed.

Custom Software

💸 Recurring: ₹1,00,000 – ₹10,00,000+/year
For:
✔ Servers/cloud hosting
✔ Bug fixes
✔ Feature updates
✔ Security patches
✔ Dev team salaries

If you hire 1 developer: ₹5L – ₹10L/year salary.

📍 3️⃣ Long Term Cost (5 Years)

Category	SaaS	Custom Software
Initial	Low	High
Ongoing	Medium	Very High
Total 5–Yr	₹3L – ₹15L	₹20L – ₹60L+

Cost Conclusion:
SaaS is cheaper for most standard business needs. Custom becomes expensive.

🚀 Time to Launch

SaaS

📆 Setup time: Same day to 1 week
You just configure and start.

Custom Software

📆 Development time: 2–6 months minimum
Delays are common.

Time Conclusion:
SaaS wins by a mile.

⚙️ Flexibility & Customization

SaaS

✔ Standard features
✔ Limited customization
✘ Cannot change core workflows
✘ Feature requests depend on vendor

Custom Software

✔ Fully tailored
✔ You own logic
✔ Integrations built as needed

Flexibility Conclusion:
Custom software wins if your workflow is unique and complex.

📌 Ownership & Control

SaaS

❌ You don’t own the software
❌ Vendor can change pricing
❌ Limited control over uptime issues

Custom Software

✔ You own code
✔ Full control over features
✔ Data stays in your control

Ownership matters if:

• Security is critical
• Regulation compliance required
• Workflow is unique

📊 Security & Compliance

SaaS

✔ Vendor handles security
✔ Backups included
✘ You depend on vendor policies

Custom Software

✔ You design security
✔ You control compliance
✘ Responsibility on your team

If your industry has strict regulations (e.g., finance, healthcare), custom software gives better compliance control.

📈 When to Choose SaaS (Most Startups)

Choose SaaS if:

✔ You need to launch fast
✔ You have standard business needs
✔ Your budget is limited
✔ You prefer minimal technical overhead
✔ You don’t need deep custom workflows

Examples:

• CRM
• Accounting
• Helpdesk
• Project management

📈 When Custom Software Is Worth It

Choose custom only if:

✔ Your workflow is truly unique
✔ SaaS limits revenue potential
✔ You want total control of data
✔ You plan to scale core business logic
✔ You have a reliable dev team

Examples:

• Custom vendor management system
• Industry-specific automation
• Proprietary client workflow engines

🧠 Two Business Scenarios

Business A: Small IT Startup

Needs:

• CRM
• Billing
• Projects

Best choice: SaaS stack
Cost-effective + quick launch + instant updates

Business B: Tech Consulting Company

Needs:

• Custom project bidding workflow
• Personalized dashboards
• Proprietary client logic
• Deep client integrations

Best choice: Custom software
Expensive, but aligned long-term

🧠 Hidden Costs People Forget

SaaS

• User license increases with team growth
• Extra charges for automation, storage

Custom

• Developer salaries
• DevOps costs
• Support & bug fixes
• Feature refactoring

Always count maintenance, not just development.

🧠 Your Decision Framework

Ask yourself:

1. How unique is my workflow?
2. Do I need control over data?
3. What’s my budget in the next 12–36 months?
4. How fast do I need this live?
5. How many users will use it?

If answers favor speed + affordability → SaaS.
If favor control + uniqueness → Custom.

📌 Final Comparison (2026)

Factor	SaaS	Custom Software
Initial Cost	Low	High
Ongoing Cost	Medium	Very High
Time to Launch	Immediate	Months
Customization	Limited	Full
Ownership	No	Yes
Maintenance	Vendor	Your Team
Control	Medium	Full