Custom Software vs SaaS: The Real 5-Year TCO (Singapore, 2026)

The verdict in three sentences

A SaaS entry price is attractive but hides a subscription that climbs 5 to 10 % per year, whereas custom front-loads the cost then stabilises. Over a 5-year horizon and around 30 seats, the two TCOs become nearly equivalent; beyond that, custom wins by 20 to 35 %. Above all, SaaS stays a recurring expense while a build becomes a capitalised asset on the balance sheet.

The full TCO, line by line

Comparing SaaS and custom on subscription alone is a mistake. TCO includes licences, maintenance, integrations, training and exit. 2026 order of magnitude for 30 users in Singapore (figures in FCFA for comparison):

At 30 seats the ranges overlap: the decision turns on length of use and headcount trajectory.

The volume effect over 5 years

SaaS is linear in seats; custom is near-fixed once built. Here is the crossover by headcount (2026 estimate):

Beyond 40 to 50 seats the gap widens clearly toward the build, which only grows through maintenance.

Mini case study

Mr Tan, managing director of a services SME in Singapore, has 48 users. The chosen SaaS costs 7 M FCFA in year one, at +8 %/year: a 5-year total of about 41 M FCFA, plus 6 M FCFA of integrations and 3 M FCFA of training, i.e. 50 M FCFA of TCO — 100 % expensed. The build comes to 42 M FCFA plus 18 % maintenance (7.5 M FCFA/year), i.e. ~54 M FCFA over 5 years, but the asset is amortised over 5 years and improves the balance sheet. A gap of just 4 M FCFA, offset by code ownership and no price drift: Mr Tan picks custom.

FAQ

Why is the SaaS entry price misleading? Because it ignores recurrence: a 6 M FCFA/year subscription becomes 35 M FCFA over 5 years with hikes. The real metric is TCO, not the monthly ticket.

Does custom really amortise? Yes: in 2026 proprietary software is typically capitalised and amortised over 3 to 5 years, making it a balance-sheet asset rather than a sunk expense.

How accurate are these figures? They are 2026 orders of magnitude; allow ±15 to 20 % depending on scope, data quality and required integration depth.

Should change management be included? Absolutely: 2 to 5 M FCFA of training and support drives adoption. Software that is not adopted destroys all ROI, whatever the model.

At how many users does custom win? The break-even sits around 30 seats; beyond 40 to 50, custom leads by 20 to 35 % over 5 years in most cases.

Let's scope your project. Give us your target headcount and functional scope, and we model your SaaS vs custom 5-year TCO with hard numbers. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.