Five-year TCO of custom software: 2026 estimate

The verdict in three sentences

The TCO (total cost of ownership) of custom software over 5 years = initial dev + 20 %/year maintenance + hosting, to compare against a SaaS subscription of 20 to 50 EUR/user/month. The tipping point in 2026 sits around 30 to 50 users: beyond that, custom becomes cheaper and leaves you an asset you own. The rule: compute the full TCO, never the entry cost alone.

The 5-year TCO of custom software

The cost of custom software isn't limited to the initial build. Here is the typical 5-year breakdown in 2026 for a 50,000 EUR (excl. VAT) project.

Over 5 years, the real TCO reaches about 138,000 EUR (excl. VAT), i.e. ~2.3 % more per year than the dev cost alone. At the end, you own a reusable asset with no user limit. These are 2026 order-of-magnitude figures.

Custom vs SaaS: the tipping point

The choice mostly hinges on user count. Here is the 5-year SaaS cost at 35 EUR/user/month versus the custom TCO of 138,000 EUR.

Beyond ~50-70 users, custom becomes more cost-effective, all the more so as it has no marginal cost per user. Add the strategic value: software that fits your processes exactly and that you own, with no risk of price hikes or service shutdown.

Mini case study

Julien, MD of a logistics SME in Rennes, equips 90 staff with a business SaaS at 35 EUR/user/month, i.e. 37,800 EUR/year and 189,000 EUR over 5 years. He gets custom software quoted at 55,000 EUR (excl. VAT) + a 5-year TCO of ~145,000 EUR. Saving over 5 years: 44,000 EUR, and above all an owned asset with no user limit or vendor dependency. Beyond 90 users the gap widens further: at 150 staff, the SaaS would cost 315,000 EUR versus 145,000 EUR for custom.

FAQ

What is a software's TCO?

TCO (Total Cost of Ownership) sums all costs over the lifetime: development or subscription, maintenance, hosting, enhancements, support and training. It's the only reliable metric to compare custom and SaaS.

From how many users is custom cost-effective?

In 2026, the tipping point often sits between 30 and 70 users, depending on the competing SaaS price. Beyond that, custom's lack of per-user cost makes the difference.

Isn't SaaS always cheaper?

No. SaaS is economical for small teams, but its cost grows linearly with user count. Custom has a high entry cost but a near-zero marginal cost.

What is the residual value of custom software?

Unlike a subscription (zero at the end), custom software remains an asset you own, reusable and transferable. Its value depends on its maintainability and the documentation delivered.

How to reduce the TCO of a custom project?

By choosing a standard stack (no exotic dependency), predictable-price sovereign hosting and a flat-rate maintenance contract. This smooths and controls costs over the 5 years.

Let's scope your project. Give us your user count and business needs: we compute your 5-year custom vs SaaS TCO and identify the tipping point. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.