The verdict in three sentences
A vertical SaaS costs 15-80 EUR per user per month, i.e. 9,000 to 48,000 EUR/year for 50 users, with no upfront investment. A custom extranet requires 45,000 to 100,000 EUR one-shot plus 12-18% annual maintenance, but eliminates lock-in and price hikes. The 5-year break-even tilts toward custom as soon as your volume exceeds 40-50 users or the SaaS demands heavy customisation.
The 5-year TCO, with figures
The SaaS trap is its apparent ease: no big cheque up front, but a cost that climbs with user count and annual increases. The table compares the total cost of ownership (TCO) over 5 years for 50 users, factoring in realistic price inflation.
| Item | Vertical SaaS (40 EUR/user/mo) | Custom extranet |
|---|---|---|
| Upfront investment | 0 EUR | 70,000 EUR |
| Base annual cost | 24,000 EUR | 10,500 EUR (15% maint.) |
| Customisation / connectors | 8,000-20,000 EUR | included |
| Average price hike | +8 to 15%/yr | controlled |
| Hosting | included | 3,000-5,000 EUR/yr |
| Cumulative 5-yr TCO | 155,000-185,000 EUR | 138,000-150,000 EUR |
In this 50-user scenario, custom becomes cheaper from year 4-5. Below 25 users, SaaS keeps the edge; beyond 80, the gap widens sharply in favour of custom.
The criteria that tip the balance
Cost is only one dimension. Five criteria drive the right choice, and a single one can settle it.
| Criterion | Favours SaaS | Favours custom |
|---|---|---|
| Business specificity | Standard process | Atypical process, competitive edge |
| User volume | < 30 users | > 50 users |
| ERP/IS integration | Native connectors exist | Complex IS, no connectors |
| Data exit | Acceptable | Reversibility critical |
| Time to deploy | Immediate (weeks) | 3-6 month horizon acceptable |
Vendor lock-in is the most underestimated risk: migrating off a vertical SaaS after 3 years of use costs on average 15,000 to 40,000 EUR (export, data migration, retraining), a cost invisible at purchase time.
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Mini case study
Sophie, IT director of a distribution SME, is undecided for 60 users. The vertical SaaS at 45 EUR/month costs 32,400 EUR/year, plus 12,000 EUR of connectors in year one and +10%/year after: about 190,000 EUR over 5 years. A custom extranet at 75,000 EUR plus 15% maintenance comes to 131,250 EUR over 5 years. Saving: 58,750 EUR, plus code ownership and no dependence on a vendor.
FAQ
From how many users does custom win? Usually from 40-50 users on a SaaS at 40 EUR/month. The threshold drops if the SaaS forces heavy billed customisation.
How do I quantify lock-in risk? Count 15,000 to 40,000 EUR for a migration off a SaaS after 3 years, between export, migration and team retraining.
Are SaaS price hikes real? Yes: renewals average +8 to 15%/year, often above inflation, which degrades TCO year over year.
Is custom riskier to deliver? Project risk exists but is managed through solid scoping and 30/40/30 milestones. SaaS shifts the risk onto long-term dependency.
Can I take a hybrid approach? Yes: keeping a SaaS for the standard and building custom for the differentiating modules is common and often optimal.
Let's scope your project. Send us your user count, ERP integration needs and horizon, and we'll build the 5-year build-vs-buy TCO together. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
