Custom Software vs Paying for SaaS Forever, Run the Actual Math

Microsoft 365 Business Basic goes from six dollars to seven dollars per user per month on July 1, 2026, a 17 percent increase, according to Red River's breakdown of Microsoft's own commercial pricing update. Business Standard climbs from $12.50 to $14, a 12 percent jump. Microsoft is not alone. Salesforce raised prices 6 percent across its Enterprise and Unlimited editions in August 2025, on top of a 9 percent increase in 2023, and a Gartner analyst told Zylo that SaaS subscription costs from several large vendors rose 10 to 20 percent in 2025 alone, well ahead of the 2.8 percent average IT budget growth companies were planning for, per Zylo's 2026 SaaS Management Index. Zylo also found that 79 percent of IT leaders hit a price increase at renewal in the past year.

None of that means SaaS is a bad deal. It means the deal quietly gets worse every year you stay in it, and almost nobody checks whether it is still the cheaper option.

I want to steelman the case for SaaS first, because it is a strong case and Mojo sells plenty of it. A mature SaaS product wins when the vendor is doing genuinely hard, ongoing work on your behalf: security patching, compliance certifications, uptime, a roadmap shaped by thousands of customers instead of one. You are buying shared economies of scale, and the vendor's R&D budget dwarfs what any small business could spend maintaining an equivalent tool alone. A canceled subscription is also a much smaller mistake than a failed custom build. That case holds for broad, mature categories like email or accounting. It gets weaker fast for narrow, vertical tools where you are paying enterprise software prices for a feature set built around someone else's workflow, not yours.

Here is where the math changes the answer. Say you run a 15-person team on a niche workflow tool at $100 per seat per month, a common price point for vertical SaaS in fields like field service, healthcare scheduling, or specialty logistics. That is $18,000 a year today. Assume, for illustration, that the vendor keeps raising prices around 15 percent a year, the midpoint of Gartner's cited 2025 range for several large vendors. That is a projection, not a fact, but a reasonable one given last year's pattern. Hold headcount flat and you are at roughly $31,500 a year by year five, with cumulative five-year spend near $121,000. Add realistic hiring, 10 percent more seats each year, and cumulative five-year spend climbs to around $152,000, since price hikes and headcount growth compound together.

Now price the alternative. In my own shop, a scoped internal tool that replaces a single narrow SaaS product, not a whole category, typically runs $40,000 to $80,000 to build, depending on integrations and how much of the existing workflow needs to carry over. Call it $60,000 for this example. Budget 20 percent of that annually for maintenance and hosting, a rule of thumb that holds up across the projects I have run, and you are at $12,000 a year in upkeep. Five years of ownership: $60,000 plus $60,000 in maintenance, or $120,000 total. In the flat-headcount SaaS scenario, that is close enough to call a wash. Add the realistic hiring scenario, and owning wins by about $32,000 over five years, and every year after that the gap widens, because the custom tool's maintenance cost does not automatically scale with headcount the way a per-seat bill does.

That is not a universal answer. It is a specific example with stated assumptions, and the actual numbers for your business could point either direction. The decision hinges on three things. First, does the SaaS tool fit a broad, well-worn category where a vendor's shared R&D genuinely beats what you could build, or a narrow one where you are paying full platform price for a sliver of the product. Second, is your workflow stable enough to be worth encoding into custom software, or still changing fast enough that a flexible off-the-shelf tool is worth the premium. Third, do you actually know your per-seat cost trajectory, or are you assuming next year looks like this year, which the last two years of vendor pricing say is a bad assumption.

Run your own numbers before you renew anything. Pull your current per-seat cost, your last renewal's price change if you have one, and your realistic headcount plan for the next three to five years. If the SaaS tool is core infrastructure like email or accounting, keep renting it, and do not let anyone talk you into rebuilding what a vendor already does well. If it is a narrow workflow tool eating an enterprise-sized bill for a fraction of its features, the ownership math deserves a real look, not a gut call. That is the exact comparison our custom software team runs with clients before recommending a build, and we tell people to keep the subscription more often than you would expect from a shop that builds software for a living. If you want a second set of eyes on your specific numbers, get in touch.