When investing in the latest technology to improve your company’s efficiency, the first step can sometimes be the toughest that is choosing what method you’ll use. It’s a primarily debated issue among experts in innovation whether companies should build their custom applications or go with SaaS application development
The opinions are split. Some believe SaaS solutions are the ideal option due to their effectiveness and ease of use. Others suggest that creating solutions with just a tiny staff of experts could help you keep payments from recurring, which can become a problem, especially within enterprises.
Choosing between SaaS application development and custom software solution is crucial for any business looking to implement new technology. Although both have advantages, there are important differences, particularly regarding the pricing structure, scaling and security.
Do you need help with an inflexible system that impedes your expansion? Finding it challenging to find SaaS solutions that work to your specific requirements? The right software for your enterprise is critical to determine your business’s long-term viability.
This blog can help you learn about the advantages and disadvantages of both SaaS and custom-built software, making it easier to choose the option that can propel your business forward.
Debate Between SaaS and Custom Software Solutions
A debate rages between custom software and SaaS solutions designed for small-scale businesses. Choosing a good software tool to assist companies in their operations is a crucial decision that both large and small companies must make.
The enterprise software market offers a variety of top-of-the-line products. Companies can choose the SaaS option for their small company that is most compatible with the requirements of their industry or has built-in capabilities to support their business’s IT infrastructure. SaaS has many benefits, but finding the most effective solutions can be difficult.
Keeping and using the most effective software can often take more time than initially thought. This is why lots of companies create custom applications. These custom software applications are an excellent alternative to standard SaaS. However, before jumping into the unknown, ensure the benefits surpass the drawbacks.
What Is SaaS?
Software as a Service (SaaS) is a particular kind of software offered over the Internet. SaaS services offer alternatives to “on-premise” systems, which require the installation of physical servers. As a substitute, SaaS gives users software access through the cloud. Examples of SaaS applications are calendars, email and a host of other tools for collaboration.
The subscription-based model is commonplace in SaaS services. Customers pay a third party for the use of an application. It is essentially a way for enterprises and individual users to use the software for a specific amount of time. Prices typically vary based on the time frame of a subscription and the extent of usage.
There are two primary kinds of structures for SaaS products: single-tenant and multi-tenant. As the title suggests, each grants users access to an individual software instance. At the same time, single-tenant architecture offers users more freedom of control, and multi-tenant offers distinct advantages that include fewer expenses, universal updates and more performance.
Advantages Of SaaS
Numerous entrepreneurs prefer SaaS for their business due to its speed and convenience. It’s easy to establish, economical and does not require a lengthy commitment. Let’s examine the ways SaaS applications could be beneficial for your business
Cost-Effective
Selecting SaaS could result in substantial savings for several reasons. First, SaaS eliminates the upfront expenses that users incur for purchasing and setup. Maintenance and updates are eliminated.
Instead of spending money on hardware, SaaS apps are easily accessible and maintenance-free at the end of the user. Furthermore, the pay-as-you-go SaaS pricing system allows companies to lower costs because they only purchase the application they use without wasting funds on unneeded licenses.
Time Management
Time is valuable and it is good to know that SaaS will assist businesses in making money. With SaaS applications, the installation process requires an internet connection and also an account to log in. Furthermore, the maintenance tasks typically associated with conventional software shift to the service provider for SaaS, meaning there is no downtime and extra hours needed to update standard software.
Scalability and Accessibility
Another benefit of SaaS is that it provides incredible flexibility. As SaaS software is hosted externally by the SaaS developer, businesses can have usage plans without the hassle of making a prior notification. Additionally, custom SaaS solution can be accessed from any place in the world due to their web-based nature. Using SaaS, customers can connect their information and effectively work from anywhere, making the process much easier for people working at home or on multiple websites.
High Compatibility
The traditional way of installing software is to update it, which takes a long time and can be costly. Compatibility issues can arise because of differences in version between different workers. With SaaS software, clients sign in using the most versions for their SaaS solution. The SaaS provider oversees upgrades and updates, eliminating the requirement to install patches.
SaaS guarantees that the user can always access the latest version of software. The definition of software as a service is a way to eliminate issues like compatibility and maintenance of software by providing your business with more efficient focus and increased performance.
Disadvantages Of SaaS
Although the SaaS solution can offer advantages, it also has certain drawbacks that you must know. Consider these disadvantages when choosing SaaS software over a custom solution.
Limited Customisation
Since SaaS services are ready to use quickly, the features can be standardised for customers. This convenience comes with the cost of limited customisation options. Many businesses face similar problems; no two organisations have the same challenges. SaaS software can hinder your ability to adapt a piece of software to meet a specific company’s business model or goal.
Vendor Lock-in
When you’ve established your users’ data and information through a particular SaaS solution, transferring them to a different software can be difficult and expensive. Data extraction from one application before transferring it to another can be complicated and take a long time because the workflows are different for each application.
Additionally, educating personnel to adapt to the new method can take substantial time and money. It is not uncommon for the hassle of changing to another vendor to force companies to remain with one supplier even when prices rise.
Security & Compliance Risk
When you select a SaaS solution over a custom solution, you’ll be subject to the provider’s security policies. Although this shouldn’t be a concern to all businesses, it can be a problem for some companies in regulated areas, like health and finance. It is possible to face issues with compliance due to using a SaaS service that doesn’t have adequate security measures.
Long-Term Costs
Although SaaS applications provide the advantage of lower upfront costs, they could be expensive over time. Subscription fees continue to accrue with time, especially when your company grows. Users-based charges can be extremely costly to manage.
Pricing Models Of SaaS
There are various variations in the costs of SaaS and SaaS-related services; we’ll examine the ones that are most commonly used below. No matter which type of service you select. However, it will likely consist of two parts:
The Price Of The Subscription
You must make regular payments to maintain access to the program and receive automatic maintenance and upgrades. A subscription contract can be monthly, quarterly or semi-annual.
One-Time Installation Pricing
In the initial phase of the procedure, you’ll be able to choose an all-inclusive fee to pay for the installation and configuration of the product. The subscription you sign up for to the off-the-shelf software will include a license for a specific period, allowing users to use the software. The details of the contract you sign with the SaaS solutions provider will comprise every detail regarding the terms of your license.
When To Use SaaS?
It is no surprise that the SaaS model has grown in the past few years thanks to its affordability, accessibility and simplicity. In a world where businesses have to be agile and simplify operations, having fast access to top-quality software is an absolute benefit. It’s no wonder that SaaS services such as Slack, Zoom, Office 365 and Salesforce have become so well-known.
In essence, if you can find a SaaS solution that meets every requirement within your budget, that’s the most efficient option for your company. This is particularly true for fast-moving startups, which must only consider developing their own business applications when they’ve grown beyond the capabilities of SaaS software.
What Is Custom Software Development?
The name implies that the software is custom-designed to satisfy specific organisational requirements. It is designed completely from scratch, which means it can seamlessly adjust to workflows that are already in place. SaaS solutions typically require assistance to meet the growing demand of niche businesses. However, custom software development could help.
Custom software applications can seamlessly be integrated with existing ERP or CRM systems for increased efficiency. They also help reduce costs and streamline tedious processes. However, an important reason is that MNCs or conglomerates typically prefer custom software. Custom software development tends to be highly resource-intensive.
Investing in tech expertise (i.e., developers, coders, testers and teams for QA) and infrastructure and maintenance are required. Some companies find that the advantages over time from custom-designed solutions outweigh the initial costs of setting up and implementing. Others have a difficult time finding that perfect place.
Advantages Of Custom Software
We’ve now covered the benefits of SaaS applications. Let’s examine the advantages of utilizing a custom-built software solution for your company.
Personalisation
Custom software’s possibilities are, for the most part and business reasons, unlimited. Custom-built software does not have to be constrained by the limits of technology used in SaaS. Although they are amazing, they are limited by WiFi speed, browser security and server capacity.
It is possible to create robust software designed to meet your specific business requirements, including functionality and branding. It offers a lot of customisation and integration with the hardware and systems you already have. Custom software can be the ideal choice for companies with growing teams.
Long-Term ROI
Even though SaaS application development agency offers a more apparent way to earn revenues through the monthly subscription cost, creating custom software makes a longer-term return on investment possible. You can, for instance, offer license keys to the software you use to allow new users access, essentially lending them the right to access the software permanently. Contrary to SaaS services that generally cost low-cost monthly subscriptions and selling license keys, it is possible to charge high annual or one-time fees that rapidly generate a profit.
Scalability
SaaS products are developed specifically for small or mid-sized businesses and cannot handle operations when your company expands. Contrarily, customised software evolves with your business and continuously changes, much like your company’s needs. Therefore, investing in custom SaaS application development is beneficial as it allows for future demands and requirements.
Control and Security
Custom software you install locally on your computer is generally safer than SaaS platforms, which can serve many users simultaneously. The reason is that there aren’t many if any, connections coming from outside sources. That means only a few customers have access to the application.
Furthermore, placing it on internal business servers or hardware creates another layer of protection between your software and malicious third entities. Custom software makes you the sole owner of the data about your program, from where it is kept to the people who use it. This makes it highly safe. However, SaaS software developed by a reputable SaaS application development firm can also be equally secure.
Disadvantages Of Custom Software
If you decide to use custom software, be mindful of the drawbacks associated with this method. However, depending on your company and business’s goals, the benefits may overshadow the disadvantages.
Higher Upfront Cost
Custom software will incur an upfront fee typically higher than what you will be charged for a SaaS solution. It’s because custom-designed solutions require the initial expenditure of the development process. You’ll most likely need the services of a specialist SaaS application development team to develop your customised software design.
Longer Time to Market
If you want to develop your software, you’ll have to account for the time needed to process it. Implementation and development for customised software take longer than for a SaaS deployment. This means that you can’t address the business goals you have in mind with software simultaneously as you could.
Maintenance Responsibility
If you select a SaaS service, the provider is accountable for maintaining and updating the software. If you design a custom solution, maintenance falls on you. It is either necessary to have an in-house or an outsourced team of developers to manage software updates and troubleshooting.
SaaS and Custom Built Software: In-Depth Comparison
If you’ve gained an in-depth knowledge of SaaS and custom-built applications, it’s time to examine how the two differ in cost, scale and general capabilities. This will offer you greater information about both the solutions, helping you to decide with certainty the best software to satisfy your particular business requirements.
Cost Implications
Both SaaS and custom-built software typically have high startup costs, but the cloud-based design of SaaS applications can also result in regular hosting and server maintenance costs. Custom software, on the other hand, can be run locally on your equipment without additional costs if you are paying for the post-release assistance from your team of developers.
Though software customisation might be a more efficient option in terms of cost, it can sometimes be a different scenario. Based on your company’s needs, SaaS applications can be equally cost-effective for the long haul.
Scalability and Flexibility
The two SaaS apps and customised software provide unmatched scaling compared to generic applications available off the shelf. However, if your SaaS platform is popular with many users, adjusting and scaling it without disrupting users’ experience can be challenging. However, it is possible to reduce this by rolling out incrementally small modifications.
The custom software can be as flexible and scalable as you require to make it. In the case of your project, the SaaS application development team will be able to make plans for changes to come to your specifications. One of the main issues in customizing software and scaling is that, in the absence of being connected to a cloud-based server, large-scale updating of software versions could be a challenge since it is necessary to install updates on all the devices running the program.
Integration Capabilities
Regarding integration, the primary benefit of SaaS is that it allows you to connect to different cloud-based systems easily. Integrating with older on-premise systems might take more effort when using custom software. However, custom software could integrate highly with your internal workflows and databases. Therefore, custom software could be a better choice when it comes to integrating with your custom-built systems.
All in all, SaaS and custom software provide extensive integration capabilities in your systems and operating procedures. The extent to which SaaS or custom software performs on integration issues will depend on the developers you collaborate with. Although some integrations won’t be feasible due to the inability to gain API access to third-party software, Integration with most popular systems will likely be simple.
Key Factors To Consider When Choosing One Over Another
Once you’ve understood the advantages of custom SaaS application development and custom-built software, you’re on the right track to consider which option will work best for your business. However, regarding capability and power, SaaS and custom software match well. The final decision is based on other business aspects, such as:
Business Goals and Objectives
The goals you intend to accomplish through your program and, particularly, who you intend to reach will determine whether SaaS or a custom program will work for you. If, for instance, you’re looking to provide services to a group outside of your company, SaaS is the better choice. Custom software is the best option if you’re searching for an application suited for internal usage.
Data Requirements
SaaS platforms provide limited analysis and data reports which are not customizable. It is recommended to use a SaaS solution that is suitable only when it can monitor all KPIs your company requires for making data-driven choices. Companies that rely heavily on data must tailor their software. By implementing a custom solution, you’ll be able to ensure that data is accessible across the business and stop the stagnation of your data. Customised software is always better for data consolidation–especially if your raw data comes in multiple formats.
Budget Constraints
Both SaaS and custom software have the cost of starting up. However, they both have the potential to yield a return. But if you’re on an extremely tight budget, you’re better off using a SaaS platform as an MVP that can be updated easily as time passes.
Long-Term Business Vision
If you choose by choosing the use of custom and SaaS business software, consider looking ahead to the present. It is impossible to predict the future; however, any insight or plans you’ve made for the future may influence your choice. Are you planning to experience a significant increase in your business? Maybe a customised solution can better equip your staff for the future. Do you also anticipate evolving software requirements? Then, the SaaS application could give you the flexibility to alter your plans at a later time.
Final Thoughts
There is no one-size-fits-all solution if you’re trying to decide between SaaS application development and custom software development. Each approach to development has strengths and drawbacks. In some companies, SaaS software is a good fit; however, enterprise software development can be profitable for many.
Whichever solution you pick, the most important thing is to ensure it can support the business’s growth. What stage of development your firm is at, the internal resources available to you and the specific requirements of your business are important factors that determine your choice. Companies looking to expand and grow quickly during the next decade -with enough resources for it and the cost associated with the custom build application pay off with time.
Custom built apps are developed for your particular needs now and in the near future. This will increase ROI and productivity over time. Unlocking the full potential of custom-built applications requires working with a trusted professional.
FAQs
What’s the average timeframe for developing custom software?
The time to market for developing custom software differs depending on the business. Custom software development can last between 4 and 12 months, depending on the degree of difficulty involved in the interface and the number of unique features.
What are the steps to choose the best SaaS service supplier?
You should have a partner who will check on you during every development phase. A person who can communicate effectively and in a way without confusion and with both parties knowing exactly what’s happening. In particular, it’s best to collaborate with a SaaS application development firm with a clearly defined pricing structure, a transparent list of their services and a company that guarantees no additional fees or hidden charges.
Which is more secure: SaaS or custom-built apps?
SaaS companies implement robust security procedures, but security depends on the service provider. Custom-built applications are more secure because they utilise specific security protocols for your business. Security maintenance requires dedicated resources and continuous monitoring.
Whether SaaS or custom-built applications is more simple to implement?
SaaS applications are generally easier to use since they can be used immediately with only minimal configuration. Custom-built apps take longer to create because they require substantial preparation, programming, integration and testing. However, they provide more flexibility to meet the needs of specific business workflows.
