custom delivery app development, saas, Tech, Development
27 Jul 2022
0 min read

When should a mid-sized business choose custom software application development over SaaS?

Digital innovation is a critical component of modern business development. Business leaders usually face a choice between using off-the-shelf solutions (SaaS) and designing custom ones. The former offer a high degree of reliability at a lower price tag. However, SaaS products may lack critical features that are necessary for meeting the company’s requirements.

Custom development is more flexible but also more demanding in terms of resources. This is why companies, especially mid-sized ones, need to consider the potential benefits and drawbacks of both options.

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Custom development vs. SaaS

Custom development and SaaS are the two alternatives for implementing new software solutions. It is common for small businesses to rely on SaaS as a lower-budget alternative. But as a business grows, so do its demands for software. For example, companies might need to manage more resources, and SaaS is unable to meet the increasing needs.

Custom development allows the implementation of solutions that match the very particular company’s needs. The decision to go with it can stem from the rising number of employees, new locations, or new markets. With SaaS, companies have to deal with the one-size-fits-all approach, facing limitations in different access levels, feature customization, etc.

When choosing custom software development, it’s important to find the right provider who will understand the company’s structure and goals.

What is custom software?

Custom software is a broad term describing solutions developed for a specific company or user. Hotels and restaurants might need custom booking apps, online stores might need custom shopping apps, and so on. While SaaS products can cover the basics, custom software app development will allow companies to tweak the design, add more third-party integrations, different types of logins, promotions, and other features.

Companies set different goals when choosing custom software: improved productivity, enhanced service quality, unique features. It requires massive investments, but most business leaders expect that it will generate future returns.

What is SaaS?

SaaS, or Software-as-a-Service, includes cloud-based solutions that are accessed over the internet, without installation and maintenance. Vendors maintain servers, databases, and the code of the application, which isn’t the case with custom development where you need to care about all these aspects separately.

Having everything maintained and all the bugs fixed for them, firms can focus on their core operations. Besides affordable pricing, SaaS products usually come on a subscription basis, which means that there are no large initial investments.

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Pros and cons of SaaS products

The nature of SaaS reveals its strengths and weaknesses. A cheaper solution also means weaker control over it. Take a look at the table below to learn about the pros and cons of SaaS products:

Saas pros-cons1

Cost efficiency is the first main advantage of SaaS. Companies don’t need to plan a large initial investment and can reap off the benefits pretty soon. It’s also usually reliable to use SaaS solutions, as vendors make timely improvements and bug fixes, as well as release new, upgraded versions. On top of that, SaaS offers protection against data loss by saving it in the cloud.

The weaknesses of SaaS reflect its limitations. Companies can customize SaaS only to a certain degree, they don’t have full control over the capabilities, and data security depends on the security protocols used by vendors. If their infrastructure gets exposed to vulnerabilities, it will pose additional risks for businesses.

Pros and cons of custom software development

Custom development allows for addressing the shortcomings of SaaS. However, it carries added risks and complexity of implementation.

Saas pros-cons2

Having a customized app addresses specific company needs. It allows businesses to create unique features based on their requirements and add all the integrations they need. Plus, such solutions can be more secure. For instance, a company may have an offline copy of data, protected from external attacks.

Large investment is the largest drawback of custom development. It’s not only the initial costs but also further spending on bug fixes, maintenance, scaling, adding new features, etc. On top of that, companies may be exposed to security risks if there are some gaps or errors in the development process. To avoid this, businesses should find a reliable development partner with proven expertise.

Factors to consider when choosing between SaaS and custom software

The choice between custom development providers and SaaS software companies depends on particular business needs. Take a look at the following factors:

Custom Software

High costs usually make custom software more suitable for larger businesses. However, many companies develop software at a reasonable price. Plus, they take care of post-release maintenance and support.

The difference between licensed and custom software

Intellectual Property (IP) is the main difference between licensing and building—it’s another important factor companies should consider. SaaS is a licensed software, which means that it provides software to companies in exchange for a subscription fee. In turn, a custom-build solution allows to hold ownership of everything.

Who needs custom development?

When a business has specific needs, it’s best to choose custom software app development. It also makes sense in the following cases:

  • A company is planning to use this software for various projects and demands functionality variation from one project to another
  • A business is scaling
  • A company has its own development team with sufficient expertise to implement a required solution
  • A business has already used a SaaS product that doesn’t match the needs

Why are companies looking for SaaS solutions?

Lack of initial investments and automation of maintenance and updates are very attractive to many businesses, especially those at the beginning stage of their development.

Sometimes, it’s worth starting with SaaS and transitioning to a custom product when there’s a need for higher scalability and personalized functionality.

Custom development vs. SaaS in different business niches

SaaS is superior in the niches involving common functions and processes. For example, an ecommerce business may use SaaS for customer relationship management (CRM) with basic functionality such as customer analytics and sales metrics.

Custom software is a better alternative for specific processes and tasks. It can be especially beneficial in fields that deal with sensitive information, such as finance or healthcare. Above that, any business that requires something unique may go for custom app development.

Conclusion

Custom development and SaaS are both valid options for choosing a software product. Each alternative has its pros and cons. Custom software allows for greater flexibility and ownership, while SaaS guarantees cost efficiency and does all the maintenance.

The decision to build or buy licensed software depends on particular requirements. It’s a good idea to contact a professional development team before making such a decision. You can reach out to TRIARE to discuss the features you need and possible limitations.

Still have questions on the difference between SaaS and Custom dev?
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CEO at Triare
Boris Abazher

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