Free Tool
Build vs Buy Calculator
Does building actually beat buying?
Usually not. This works out where the line falls for your seat count, price, and horizon.
Compare the two
Maintenance is included at 12.5% of build cost per year, which is the middle of the 10–15% range for web software. It is the line most build cases leave out.
Your inputs
Use a cost guide if you are not sure. Internal tools usually land at the lower end.
Result
Buying, over 3 years
$27,000
$9,000 per year in licences
Building, over 3 years
$48,125
Build plus $4,375 a year in maintenance
Buying is cheaper
by $21,125
Breakeven is around 45 seats at this price and horizon
Indicative only. These are the same bands published across our cost guides, not a quotation — a real number needs your actual scope.
Quick Answer
Updated August 22, 2026
When is building software cheaper than buying it?
Roughly above 40–60 seats against a $50-per-seat product over three years, once you include maintenance at 10–15% of build cost per year. Below that, buying almost always wins. The calculation people usually get wrong is omitting maintenance entirely — a custom tool only improves while you keep funding it, whereas a vendor improves their product whether or not you spend anything. Cost is also not the only axis: build when the process is a genuine competitive advantage, even when the maths is close.
Inputs
Seats, price, build cost, horizon
Includes
Maintenance at 12.5% a year
Typical breakeven
40 – 60 seats
Best for
- Teams writing a build-versus-buy business case
- Companies whose SaaS bill has grown uncomfortable
- Anyone told custom is the answer who wants to check
Not best for
- Deciding on competitive advantage, which is not a cost question
- Products where no off-the-shelf option genuinely exists
- Cases where switching cost dominates the maths
FAQ
Questions about this tool
Why include maintenance in the build cost?
Because it is unavoidable. Dependencies need security updates, browsers and operating systems change, and integrations break when providers change their APIs. Ten to fifteen percent of build cost per year is the realistic figure for web software, and higher for mobile.
What does this calculation leave out?
Your team’s time to specify and manage the build, the opportunity cost of engineers not doing something else, switching cost if you already run the off-the-shelf tool, and the value of a vendor continuing to improve their product for free. All of those favour buying.
When should we build even if buying is cheaper?
When the process is genuinely how you win against competitors. Buying there means buying the same capability your competitors can buy. That is a strategy question rather than a spreadsheet one, and the spreadsheet should not decide it.
Is there a middle option?
Yes — configure and extend. Keep an off-the-shelf core and build the missing 20% around it. You get most of the fit without owning the hard parts, at typically $5,000–$25,000 of integration work.
What is the biggest risk in building?
That nobody funds it after launch. Unmaintained custom software degrades into the spreadsheet it replaced, usually within about two years. If you cannot name who owns it next year, buy.
Related
Go from a number to a plan
The guides behind this tool, and the other free tools alongside it.