SaaS vs In-House Software Comparison: Which One Helps Your Company Save Money?
For a long time, SaaS solutions have been the go-to solution for many companies due to their affordability and ease of use. However, in the past few years we have seen significant changes in the digital landscape that led to higher costs for SaaS and an increased accessibility of development tools and talent.
Should a company evaluate its SaaS services’ cost-to-value ratio and consider building an in-house solution if it saves them money? Let’s explore what changed in the past few years that might make this proposition relevant again.
SaaS vs In-House Software: How Have the Costs Shifted?
Let’s look at how the shifting cost landscape has influenced the affordability of SaaS and in-house software.
SaaS Price Hikes
Software spending reached an all-time high in 2023. According to Vertice’s SaaS Inflation Index, almost three quarters (73%) of SaaS vendors hiked prices last year, while the SaaS inflation more than doubled compared to the annual CPI rate of inflation.
SaaS spending accounts for 14.1% of a typical company’s expense line, meaning an average of $7,900 per employee spent on software, compared to $5,760 in 2022. We can see how this rising cost has a significant impact, especially on large teams.
Open-Source & Cloud Options Affordability
Meanwhile, the boom in open-source technology in the past few years has led to increased affordability for cloud hosting platforms, making in-house development a more affordable option.
Decreased Development Costs
Development costs have been decreasing significantly due to the rise of automation tools. The growing number of automation tools that streamline coding and reduce development time have made in-house solutions more cost-effective.
Another factor that led to this decrease is the worldwide growth of the global developer talent pool, leading to more competitive development rates.
Customization & Scalability: The Perks of In-House Development
At first glance, the many features offered by SaaS solutions might be tempting. However, many of these functions are generic and do not cater to the specific needs of businesses. Here’s how in-house development can offer unique solutions tailored just for you:
Focused Development
Many businesses only require a small percentage of the features offered by SaaS software. Developing in-house allows you to focus solely on the functionalities that are critical to your workflow, reducing the development scope.
Enhanced Customization
In-house development gives you freedom to build solutions created specifically for your business, aligning with your unique processes and needs.
Tailored Integrations
SaaS integrations can be complex and costly. In-house development allows you to build integrations seamlessly tailored to your existing systems.
Scalability
As they grow, businesses will have new requirements to keep everything working smoothly. In-house development solutions can adapt and expand to fit your evolving needs more easily than modifying a third-party SaaS platform.
Beyond costs, there are other benefits that come with an in-house software solution, such as intellectual property ownership, improved data security and regulatory compliance.
Therefore, if building an in-house solution can generate significant cost savings, it should be on your To-Learn list for further exploration this year.
Build The Best Software Solution for Your Needs with Mejix
In-house software development has many advantages over generic SaaS solutions, but it requires vast expertise and careful implementation.
At Mejix, we’re fully dedicated to building enterprise-grade custom development solutions for start-ups and large businesses. We take our time to learn your needs and requirements and use the latest technologies to build reliable, efficient products that help your business thrive.
Discover our full-stack web development services and browse our portfolio for a glimpse into our work. Like what you see? Drop us a line and let’s get started!
