Build or Buy Calculator

Build vs. Buy Decision Analysis

The build vs. buy framework helps engineering leads and product managers evaluate whether custom internal software development or a commercial off-the-shelf SaaS solution offers better total return on investment over a given time horizon.

Key Cost Factors

A comprehensive build vs. buy evaluation accounts for both upfront and ongoing expenses for each path:

• In-House Build Costs: Initial developer hours, design, testing, infrastructure, and ongoing maintenance or feature enhancements.
• Vendor Buy Costs: Implementation/onboarding fees, user seat licensing or monthly subscription tiers, and API usage fees.

Breakeven Analysis

Building custom software usually requires a larger upfront investment but yields lower recurring maintenance costs compared to perpetual SaaS subscriptions. The breakeven point is the month where cumulated SaaS subscription fees equal total custom build costs.