The verdict in three sentences
An off-the-shelf SaaS costs 30 to 150 EUR/user/month in 2026; a custom build costs 60,000 to 150,000 EUR amortized over 3 to 5 years. The switching threshold sits around 25 to 40 users, or earlier if your process is too specific for the standard. The real decision hinges on 3-year TCO, vendor lock-in and data ownership.
The 3-year TCO calculation
Compared for a 30-user team, SaaS assumed at 80 EUR/user/month:
| Item | Off-the-shelf SaaS | Custom development |
|---|---|---|
| Year 1 cost | 28,800 EUR (30 × 80 × 12) | 90,000 EUR (build) |
| Year 2 cost | 28,800 EUR | 12,000 EUR (maintenance) |
| Year 3 cost | 28,800 EUR (+ price hikes) | 12,000 EUR |
| 3-year TCO | ~86,400 EUR | ~114,000 EUR |
| 5-year TCO | ~144,000 EUR | ~138,000 EUR |
At 30 users, SaaS stays competitive over 3 years but custom overtakes it around year 5. The threshold shifts earlier if user count grows or if the SaaS forces extra paid modules.
Factors beyond price
| Factor | SaaS advantage | Custom advantage |
|---|---|---|
| Time-to-market | Immediate | 3-9 months |
| Entry cost | Low | High |
| Customization | Limited | Total |
| Vendor lock-in | High | None |
| Data ownership | Shared | You |
| Deep integrations | Per vendor API | Unlimited |
| Evolution | Vendor roadmap | Your roadmap |
Decision scoring grid
Award 1 point per "true" line; 4 points or more leans custom:
| Question | Custom point |
|---|---|
| More than 30-40 users? | +1 |
| Differentiating / non-standard core process? | +1 |
| Deep ERP/CRM integrations needed? | +1 |
| Strategic data to keep in-house? | +1 |
| SaaS cost > 30,000 EUR/year expected? | +1 |
| Need to evolve fast without depending on a vendor? | +1 |
Mini case study
Marc, IT director of a mid-cap manufacturer in Grenoble (45 users concerned), compares a production-management SaaS at 95 EUR/user/month (51,300 EUR/year) with a custom build at 135,000 EUR + 16,000 EUR/year maintenance. 3-year TCO: ~154,000 EUR for SaaS versus ~167,000 EUR for custom. But the SaaS does not cover 3 critical processes and would bill 22,000 EUR of specific development. Decision score: 5/6. Marc chooses custom, profitable from year 4 and free of vendor lock-in.
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FAQ
From how many users does custom win?
Usually around 25 to 40 users, depending on the SaaS per-seat price. Beyond that the SaaS per-user cost grows linearly while custom is already amortized.
Is custom riskier?
The risk is build timeline and budget; SaaS shifts the risk onto vendor lock-in and price hikes. A solid requirements document sharply reduces custom risk.
Can you combine both?
Yes: many keep a SaaS for standard functions (payroll, accounting) and build custom for the differentiating core. That is often the best TCO.
Who owns the data in a SaaS?
You remain the contractual owner, but access and portability depend on the vendor. Custom gives you full control, a real concern in regulated sectors.
How do I factor in the hidden SaaS TCO?
Add optional modules, annual increases (often 5-10 %/year) and vendor-billed specific development. The sticker price is rarely the final price.
Let's scope your project. Give us your user count and your 3 critical processes and we will produce a costed 3-year TCO comparison of SaaS vs custom. 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.