SaaS Vs. Custom Software — Which is Best for Your Business?

There is a global SaaS market Estimated will reach $702.19 billion by 2030. It is undoubtedly a growing market that proves its benefits. However, there are companies – and indeed, entire industries – that are still reluctant when it comes to adoption. SaaS solution. Bespoke (or custom) development used to be considered the safest bet, but is that the case anymore?

As a proptech company offering a SaaS product digitalizing the real estate industry, we’ve seen both enthusiasm and skepticism about this business model, so I decided to take a closer look at the pros and cons of both SaaS and bespoke technologies.

Related: 4 Ways SaaS Can Make Entrepreneurs More Efficient and Competitive

Advantages of SaaS

Efforts and budgets associated with SaaS product upgrades is low, as providers continue to grow based on “community intelligence”. A product or service undergoes continuous improvement based on feedback and suggestions from multiple users who may have faced the same problem as you. This transforms SaaS products into living organisms that are highly flexible and dynamic.

Staying on the subject of costs, it is important to mention that SaaS acquisitions are more financially productive, as costs OpEx category (short-term expenses), while custom development usually falls under the CapEx category (long-term investments).

Using a SaaS solution equates to rapid deployment, and is the way to go for agile processes. Companies with a testing mentality will see the benefit of starting to use a new product and measure its impact sooner rather than later. Being an early adopter who understands the dynamic environment and Changing needs of stakeholders Puts the company on the fast track to success.

It’s also worth noting that a SaaS service or product is often modular, which means you can choose and test the parts of it that help you most in your processes. Providers will also have multiple offerings based on your needs, usage, or company size.

Disadvantages of SaaS

According to McKinsey Research shows that most large companies do not trust SaaS providers with their security keys and prefer to keep them on-premises. But on-premise tends to be a better solution, leaving room for private cloud, which can also be offered by SaaS companies.

It seems that the main disadvantages that most potential clients see are related Security and ownership. Many people perceive SaaS as an external solution that is not as reliable as they develop according to their own specific needs and not as an enhancement to their own capabilities.

Another disadvantage of SaaS is that customization is not as on-point as with bespoke solutions. Some SaaS solutions offer a certain level of customization but not to the degree that it fully reflects the company’s brand, identity and values.

SaaS solutions come with challenges The legal side as well. Companies adopting SaaS products often have to accept that any potential legal action will fall under the SaaS provider’s national law, not their own.

Related: What makes SaaS the go-to option for building a digital ecosystem?

Advantages of custom development

Perhaps the biggest advantage Custom software You get exactly what you want and need, you have IP, and there are fewer security risks.

You’ll be able to digitize exactly the processes you want, with little disruption among your team. This requires the company to deeply understand the current and potential upcoming challenges and opportunities in the market and respond to them with advanced solutions.

Custom-developed software can be a way to optimize a very specific process that you know and that doesn’t change very often.

Disadvantages of custom solutions

Building your own custom solution takes time and a thoughtful budget. Research shows Not to mention that “less than 10% of developers can deliver a typical software solution with basic features in less than 2 months.” The cost of failurewhich “typically affects 30% to 70% of enterprise development projects.”

Once you have that—maybe sooner rather than later—organizations’ needs will have changed, putting you in a situation where you’ve spent a lot of time and money on a product that no one will use (it said (that “most people use only 10% of a product’s features optimally,” a percentage relevant to bespoke development).

Furthermore, one of the advantages of custom solutions – building something with your needs in mind – can quickly become a disadvantage if that need is not properly mapped or if it tries to solve too many specific problems for too many people.

Building a product without as much market knowledge as a SaaS company also comes with other challenges: it’s not as flexible and dynamic, it can block your agility, and you have to pay for every update – not to mention that there is. There is a high probability that the team developing the custom solution will change, which means there will be a learning curve for any new developer who has to maintain and update the bespoke solution.

Related: Answer these 4 questions before investing in custom software

A change in mindset

Custom-built software can complement that very well SaaS software, bringing that element of deep personalization. By integrating them, one can get the best of both worlds: agile, cutting-edge technology and custom, identity-based solutions for their highly specialized needs.

It’s only fair for every company to want to look different, but we need a change in perspective: stop praising custom development for the sake of ownership. After all, it’s not owning your own software that will send you to the top but you yourself Customer expectations. SaaS solutions are the fuel that fuels your rapid growth.