The verdict in three sentences
TCO is everything the software will cost you over 5 years, not just the licence or the development quote. The budget-killers are rarely advertised: integration, training, recurring maintenance at 15-20%/year, upgrades and hidden onboarding costs. Always compare SaaS and custom on full 5-year TCO, not on entry price.
TCO items: what the quote doesn't say
A serious TCO model covers seven items. Here are their 2026 order-of-magnitude figures on the European market.
| Item | SaaS | Custom build |
|---|---|---|
| Acquisition | Subscription 20-200 EUR/user/month | Dev 40,000-150,000 EUR one-shot |
| Integration/config | 2,000-20,000 EUR | Included in dev |
| Data migration | 3,000-15,000 EUR | 3,000-15,000 EUR |
| Training | 1,000-8,000 EUR | 2,000-10,000 EUR |
| Annual maintenance | Included | 15-20% of dev/year |
| Hosting | Included | 1,200-6,000 EUR/year |
| Upgrades | Included (imposed) | Budgeted (controlled) |
CFO rule: the 'visible' part (subscription or dev) is often 30-40% of TCO. The rest hides in integration, training and maintenance.
5-year TCO compared on a sample case
Business tool for 30 users, European market, 2026 estimate.
| Year | SaaS (40 EUR/user/month) | Custom (80,000 EUR) |
|---|---|---|
| Year 0 (setup) | 8,000 EUR | 92,000 EUR (dev + migration + training) |
| Year 1 | 14,400 EUR | 14,000 EUR (maintenance + hosting) |
| Year 2 | 14,400 EUR | 14,000 EUR |
| Year 3 | 15,800 EUR (+10% price) | 14,000 EUR |
| Year 4 | 15,800 EUR | 14,000 EUR |
| Year 5 | 17,400 EUR (+10%) | 14,000 EUR |
| 5-year TCO | 85,800 EUR | 162,000 EUR |
At 30 users, SaaS stays ahead. But add 20 users (billed monthly on SaaS, zero marginal cost on custom) and the gap flips: that's the whole point of user-count sensitivity.
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Mini case study
Claire, CFO of a 45-employee industrial SME in Lyon, compares two offers for a production-tracking tool. The SaaS vendor quotes 35 EUR/user/month for 25 users, i.e. 10,500 EUR/year — 'cheaper', he says. Claire builds her TCO spreadsheet: she adds 12,000 EUR of integration, 6,000 EUR of migration, 4,000 EUR of training and an 8% price hike every two years. SaaS 5-year TCO: 74,000 EUR. The custom offer at 70,000 EUR shows a 5-year TCO of 138,000 EUR. SaaS wins here — but Claire now has a defensible figure for the board, not a hunch. She also negotiates a contractual cap on hikes at 5%/year.
FAQ
What exactly is TCO? Total cost of ownership sums all direct and indirect costs of a software over its lifetime: acquisition, integration, training, maintenance, hosting, upgrades and exit costs. It's usually reasoned over 5 years.
What are the most common hidden costs? Integration with the existing IT stack, data migration, training, internal time spent, and above all annual SaaS price hikes (often 5-15%/year) and version upgrades.
How do you estimate custom maintenance? Count 15 to 20% of the development cost per year. An 80,000 EUR dev therefore implies 12,000 to 16,000 EUR/year of corrective and evolutionary maintenance, hosting included or on top.
Is SaaS TCO really predictable? No: price hikes, added users and paid modules make the budget drift. Negotiate a contractual hike cap and model several headcount-growth scenarios.
Can you provide a TCO spreadsheet? Yes. We deliver a 5-year TCO model pre-filled with your assumptions (users, growth, hikes) that compares SaaS and custom item by item, ready for your board.
Let's scope your project. Give us your assumptions (user count, horizon, growth): we build your compared 5-year TCO, SaaS vs custom, ready for decision. 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.
