Custom system or off-the-shelf software: which costs less in the end
Off-the-shelf software is cheaper at the start; a custom system is cheaper over the long run. That is the main thing to keep in mind when choosing: the list price shows the cost of entry, but what you actually pay for is the whole of ownership, year after year, for every employee and every customization. Ready-made SaaS has a low entry cost and a bill that grows with the team and goes up every year. A custom system has a large first invoice and an almost flat "tail" after launch.
Below we look at how to calculate total cost of ownership, why per-user subscriptions keep getting more expensive, where the break-even point between the two models lies, and when it is more honest to go with off-the-shelf software.
What is total cost of ownership, and why is the list price misleading?
Total cost of ownership (TCO) is the entire amount spent on a system over its lifetime, not the figure on the price list. It includes acquisition, implementation, customization, integrations, training, downtime and the cost of leaving the platform. The concept was introduced by Gartner in the late 1980s, and Gartner's analysts also point out specifically that indirect costs, such as adapting the software to your processes and dependence on the vendor, are usually underestimated at the selection stage.
The price list only shows the entry cost. A monthly subscription looks cheap because it leaves three things unsaid: you pay for every new person, you pay extra to make the product fit your processes, and you accept an annual price increase that the vendor doesn't ask you about. A custom system works the other way around: the first invoice is daunting, but it barely grows afterwards. Comparing the two models on entry price is like choosing a car by the cost of its first tank of fuel.
What goes into the bill for off-the-shelf software?
A fee to get in and a fee for every person, forever. Off-the-shelf SaaS charges per user per month, and that is the main line item, and one that keeps growing. On top of that come customizations for your processes, separate modules for integrating with 1C (the accounting and ERP platform most Russian companies run on), telephony and warehouse systems, training the team on someone else's logic, and the "exit cost" once your data and habits are tied to a single platform.
Russian vendors use different models. amoCRM, a CRM widely used by Russian small businesses, charges per user: its "Professional" plan costs about 1,699 rubles per person per month (the price for new customers from September 1, 2025). Bitrix24, a Russian CRM and collaboration suite, sells user bundles within a plan rather than strictly per seat. The low-code platform ELMA365 charges from 500 rubles per user per month in the cloud, and its licenses went up by an average of 20% from January 1, 2025. Exact pricing changes quickly, so check the vendors' websites, but the model matters more than the number: the bigger the team, the bigger the bill, every single month.
Vendor lock-in is a separate line item that never appears on the price list. The deeper a platform grows into your processes, the more expensive it is to leave: data, integrations and employee habits all turn into switching costs. Why even a paid-for system often fails to take hold is covered in a separate article: why the CRM "didn't stick".
What goes into the bill for a custom system?
A large first invoice and an almost flat bill after that. Custom development is capital expenditure: you pay once to design and build a system around your process, and from then on you only carry support, further development and infrastructure. There is no fee for each new user, no annual price increase from a vendor, and no risk of the vendor "raising prices or leaving the market."
Support is usually estimated at 15–20% of the development cost per year; this is a benchmark from vendor practice, not an independent standard. You control the servers or cloud yourself. But the key difference lies elsewhere: you own the code and the data. Nobody can switch them off from outside, you can hand them over to another team, and nobody else's price list applies to them.
| Off-the-shelf (SaaS) | Custom system | |
|---|---|---|
| Entry cost | low, one subscription | high, one-time development |
| Per-user fee | for everyone, every month | none |
| Price growth over time | annual, set by the vendor | support and servers only |
| Customization for your process | extra, hits a ceiling | built into the project |
| Ownership of code and data | no, lock-in | yes |
| Risk of vendor exit | yes | no |
The flat "tail" after the first year is a property of the model itself. Whether it pays off depends on scale, which brings us to the next point.
Why does a per-user subscription get more expensive every year?
Because the subscription software market is growing faster than inflation, and AI features are sold as a per-user surcharge. According to SaaStr's analysis, citing Vertice, SaaS prices rose by about 11.4% year over year in 2025, almost five times the inflation rate in G7 countries. The average business spends about $7,900 per employee per year on subscriptions alone, 27% more than two years earlier.
A separate phenomenon is the "AI tax." Vendors bake AI features into the product and raise the renewal price by 20–30%, whether or not you use that AI. Microsoft 365 Copilot costs $30 per user per month as an add-on to the core licenses: for a team of 50, that is an extra $18,000 a year for a single add-on. Salesforce has pushed its top tier to $500 per seat per month, twice what it was five years ago. Slack added 20% in a year, and Adobe raised its photography plan by 50%.
Gartner's forecast, as cited by Rimini Street, is that certain software ownership and operating costs, including support, would rise by 35% by the end of 2025. For a business owner the takeaway is simple: the monthly model is a bet that the vendor won't raise prices or lock you in. Over the past two years, that bet hasn't paid off once.
Want a system built around your process, so you don't have to bend your business to fit someone else's pricing plan? Custom development at IncubeAi starts with working out where you are losing money and designing a system for your niche: under a contract, with data stored in Russia and support after handover. The team has 300+ automation and AI projects behind it.
Which is better for a business: a custom CRM or an off-the-shelf system?
An off-the-shelf CRM is usually the better deal for a standard process, a small team and a short horizon; a custom system is justified by non-standard logic and long-term use. Compare not just the first payment but the total cost of ownership: licenses, implementation, integrations, customization, support and vendor dependence.
Standard process and short horizon
An off-the-shelf CRM gets you started quickly if your funnel, roles and reports are close to standard. In this scenario, custom development may not have time to pay off.
Non-standard logic and growth
A custom system is justified when the process is a competitive advantage, the team is growing, and the limits of the off-the-shelf product keep generating customization work. The code and data stay under the company's control.
Total cost of ownership
Count licenses, implementation, integrations, training, support and exiting the platform over the full horizon. If part of your operations is standard, a hybrid can be a workable compromise.
Where is the break-even point: when is custom cheaper than off-the-shelf?
Where the rising subscription line crosses the almost horizontal line of a custom system. The mechanics can be stated with confidence: per-user fees scale linearly with the team and with annual price increases, while the costs of a custom system barely grow after the first year. Sooner or later the first curve overtakes the second; the only question is when.
Specific thresholds vary, and all of them are estimates from an interested party, custom development vendors, not independent research. By those estimates, the break-even point for small companies comes at around 15–30 users, with payback in 1.5–2 years. Check it against your own numbers: multiply the per-user price by your team size and by a 3–5 year horizon, add the annual price increase, and compare it with one-time development plus support.
The logic is backed up by a large case of the same nature: renting versus owning. 37signals (the company behind Basecamp and HEY), led by David Heinemeier Hansson, moved off AWS onto its own servers. The bill dropped from $3.2 million to $1.3 million a year, and Hansson put the projected savings at more than $10 million over five years, with faster hardware and far more storage. At scale, renting loses to owning, and it is the same arithmetic as a subscription versus your own system.
The decision comes down to three axes:
| Axis | Off-the-shelf wins | Custom system wins |
|---|---|---|
| Number of users | few (up to ~15), not growing | many, or growing fast |
| Uniqueness of the process | standard | non-standard, your advantage |
| System lifespan | a 1–2 year project | the core of the business for 5–10 years |
When is off-the-shelf software the right choice?
When the process is standard, the team is small, and the system is only needed for a short time. If you have routine bookkeeping, a simple sales funnel and a dozen employees with no plans for multiple-fold growth, off-the-shelf software is almost certainly cheaper and faster. In that scenario, the capital spent on development simply won't have time to pay back, and paying extra for "your own" would be a straight loss.
Off-the-shelf software is a fully capable working tool. The mistake usually isn't choosing a ready-made product, but trying to stretch it over a non-standard process through endless customization. Custom development also fails in predictable ways: when nobody on the client's side accepts the work and takes responsibility for the result, the project turns into exactly the "lottery" people fear. As one author on Habr, a major Russian tech community, puts it bluntly: "In my experience, every failed project has one thing in common: communication with the client was never properly established."
The honest conclusion: if the three axes from the previous section point to off-the-shelf, go with off-the-shelf and don't overpay for engineering you don't need yet.
When does off-the-shelf software become a trap?
When the process is non-standard, the team is growing, and vendor dependence becomes a business risk. In these three situations, the low entry cost turns into a growing "tax," and the longer you stay on the platform, the more expensive it is to leave.
- A unique process. If the way you work is a competitive advantage, adapting an off-the-shelf product costs two to three times extra, and you still hit its ceiling.
- A growing team. The fee for every new employee becomes a permanent "growth tax": the more successful you are, the more you pay simply for scaling.
- Independence is critical. When data, core integrations or sanctions risks matter for survival, lock-in outweighs any arithmetic. Federal Law No. 58-FZ (April 2025) required critical infrastructure operators to switch to domestic software; sole proprietors were exempted from these requirements, but the direction is set.
The trap closes quietly. While the team is small, the per-seat fee goes unnoticed; by a hundred employees it is a budget line of its own, and data and habits have grown so deeply into the platform that moving off it costs as much as a new system. If you have reached the stage where your various services don't line up with each other, see our article on how to connect 1C, CRM, the bank and Telegram into a single loop.
How much does custom development cost, and how long does it take?
There really is a large first invoice, but "slow and unpredictable" is a consequence of poorly organized work, not of the format itself. A budget turns into a lottery where there are no clear requirements and no engaged client. A well-managed project works differently: it starts with a goal expressed in money, then comes the architecture, and only then the code, in stages, each of which can be accepted and verified.
For us, that means four steps:
- Understand the problem: we dig into your processes, find where money and time are being lost, and set a goal expressed in money.
- Design the system: an architecture for your niche and scale, covering what we build, how we integrate it and in what order.
- Build and implement: we build the system, connect it to your services, migrate the data and train the team.
- Support: we keep developing the system after launch, because the business changes and the code has to change with it.
The fair comparison for the first invoice is the sum of all the subscriptions over the years the system will be in use. Then capital expenditure falls into place: it is the purchase of an asset that stays in your ownership, whereas rent has to be renewed forever. Similar logic applies when moving off spreadsheets; we covered it in the article on when a business should move off Excel.
How do you choose without overpaying?
Calculate the total cost of ownership over 3–5 years for both options and check it against the three decision axes. Count the full amount over the system's lifetime: that reveals the real difference the entry price hides.
- Add up the TCO of off-the-shelf software: per-user price × team size × 12 months × horizon in years, plus the annual price increase, plus customization and integrations.
- Add up the TCO of a custom system: one-time development + support (a benchmark of 15–20% per year) + infrastructure.
- Map the result onto the three axes: number of users, how non-standard the process is, and system lifespan.
- Assess the risk separately: are data ownership and vendor independence critical for you? If so, that outweighs pure arithmetic.
If the process is standard, the team is small and the horizon is short, go with off-the-shelf. If the process is non-standard, the team is growing and the system is needed for years to come, your own system pays off both in money and in control. There is no universal answer; there is your own calculation.
If you'd like to work through this calculation together, tell us about your task. We'll go through your processes, calculate the total cost of ownership for both options honestly, and if off-the-shelf turns out to be the better deal, we'll tell you so directly. We work under a contract, with data stored in Russia and support after handover.
Sources
- Gartner IT Glossary — definition of Total Cost of Ownership
- Microsoft — official Microsoft 365 Copilot business pricing ($30/user/month)
- SaaStr — The Great SaaS Price Surge of 2025 (SaaS inflation +11.4%, the "AI tax," Salesforce, Slack, Adobe)
- Rimini Street — Gartner Predicts 2022 forecasts of a 35% rise in software ownership costs
- ELMA365 — announcement of an average 20% license price increase from 2025
- Data Center Dynamics — 37signals on leaving the cloud: savings of ~$2 million a year and more than $10 million over five years
- Habr — "Why custom development turns into a lottery" (anti-patterns and communication)
Frequently asked questions
Which is cheaper: an off-the-shelf CRM or a custom system?+
At the start, almost always the off-the-shelf product: getting in costs one subscription, and setup takes days. Over the long run the picture flips. With off-the-shelf software, the per-user payment grows with the team and rises every year; with a custom system, once development is done you are left with an almost flat bill for support and servers. Exactly where the curves cross depends on the number of users, how non-standard the process is and how long the system will be in use.
What is total cost of ownership (TCO)?+
Total Cost of Ownership is the full amount spent on a system over its lifetime, whereas the list price only shows the cost of entry. It includes licenses, implementation, customization, integrations, training, downtime and the cost of leaving the platform. The concept was introduced by Gartner in the late 1980s. Indirect costs, such as adapting the software to your own processes and dependence on the vendor, are usually underestimated when choosing a system.
At what headcount does a custom system pay off?+
There is no single threshold; it depends on the subscription price and the complexity of the process. According to estimates from custom development vendors (an interested party, not independent research), the break-even point for small companies comes at around 15–30 users, with payback in 1.5–2 years. Run the numbers on your own figures: multiply the per-user price by your team size and by a horizon of several years.
Is custom development always expensive and slow?+
A large upfront bill, yes: it is capital expenditure instead of rent. But "slow and unpredictable" is a consequence of poorly organized work, not of the format itself. A well-managed project starts with a goal expressed in money and an architecture before any code, moves in stages with acceptance at each one, and leaves the client owning the code and the data.
When is off-the-shelf software a better deal than custom development?+
When the process is standard (routine accounting, a simple sales funnel), the team is small and not growing, and the system is needed for a year or two. Then the low entry cost of off-the-shelf software wins: the capital spent on development simply won't have time to pay back. Off-the-shelf software is a perfectly good tool; the mistake is not choosing it, but trying to stretch it over a non-standard process.