The verdict in three sentences
The initial quote is only 30 to 45 % of the real 5-year cost: maintenance, hosting, upgrades and training make up the rest. Software that looks cheaper in year 1 can cost more at 60 months due to recurring licences or unmanaged technical debt. The only sound decision is made on the 5-year cumulative cost, not the entry price.
The 6 lines that make up TCO
A rigorous CFO breaks the cost down over the whole lifetime. 2026 order of magnitude for SME business software (20-40 users) on the Berlin market:
| Line | Share of 5-yr TCO | Order of magnitude |
|---|---|---|
| Build or initial licences | 30 - 45 % | 40,000 - 90,000 EUR |
| Maintenance (corrective/evolutive) | 20 - 30 % | 12-18 %/yr of build |
| Hosting & infrastructure | 5 - 12 % | 1,500 - 7,000 EUR/yr |
| Major upgrades | 10 - 20 % | 8,000 - 30,000 EUR |
| Training & change management | 3 - 8 % | 3,000 - 12,000 EUR |
| Support & monitoring | 5 - 10 % | 2,000 - 8,000 EUR/yr |
The line most forgotten at quote time is change management: excellent software poorly adopted destroys its own ROI. Budget training from the start.
Two scenarios over 60 months
Compare a SaaS (low entry, linear recurring cost) with custom (high entry, controlled recurring) for 30 users. The cumulative cost tells the story:
| Milestone | SaaS (30 users) | Custom |
|---|---|---|
| Month 6 | 18,000 EUR | 75,000 EUR |
| Month 12 | 32,000 EUR | 85,000 EUR |
| Month 24 | 62,000 EUR | 103,000 EUR |
| Month 36 | 92,000 EUR | 121,000 EUR |
| Month 48 | 122,000 EUR | 139,000 EUR |
| Month 60 | 152,000 EUR | 157,000 EUR |
SaaS starts very low and rises linearly; custom starts high then climbs gently. The crossover here is around month 58 to 62: beyond that, custom becomes cheaper AND remains an owned asset.
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Mini case study
Claire, CFO of a 120-employee industrial SME in Berlin, receives two quotes: a SaaS at 14,000 EUR entry and custom at 78,000 EUR. The board wants the cheaper SaaS. Claire models the 5-year TCO: SaaS = 14,000 + (35 users x 540 EUR x 5) + integrations = 133,450 EUR; custom = 78,000 + 54,600 maintenance + 9,000 hosting = 141,600 EUR. At 60 months the gap is only 8,150 EUR, but at a 7-year horizon custom moves ahead and removes the SaaS price-hike risk. She presents the cumulative curve to the board, which decides on the long term.
FAQ
Why is the initial quote misleading? Because it only covers 30 to 45 % of the real cost. Maintenance, upgrades and hosting weigh as much over 5 years as the build itself.
What maintenance rate should I budget? Count 12 to 18 % of the build cost per year for custom. Below 10 %, you accumulate technical debt that explodes at the next major upgrade.
How do I compare SaaS and custom objectively? Plot the month-by-month cumulative cost over 60 months for both. The crossover point tells you when custom becomes worthwhile for your volume.
Does training really count in TCO? Yes: 3 to 8 % of the total. An unadopted tool produces no ROI; change management is an investment, not an option.
Does TCO change with growth? A lot. Each new user costs 240-720 EUR/yr on SaaS and 0 EUR on custom; the more you grow, the more custom pays off.
Let's scope your project. Send us your two candidate quotes and your horizon (5 or 7 years): we build the cumulative TCO curve and identify your tipping point. Detailed quote within 48h. 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.
