Should You Build or Buy Software?

By: Andrew Conrad on June 25, 2020

Companies that consider building their own software before deciding to purchase an existing solution do so for two primary reasons:

  1. Buying is generally much faster and cheaper than building

  2. Buying has significantly less upkeep than building

Regardless, many businesses still choose to build their own software because they feel the benefits of building outweigh the costs.

In fact, according to Gartner research, more than 95% of IT organizations worldwide use customized open source software on mission critical IT projects (full article available to clients).

In this article we’ll feature stories from businesses about why buying or building was the best option for them, so that you can decide which makes the most sense for your own company.

If you do decide that buying is the right decision for you, Software Advice has advisors who are ready to help you find the specific software that is the best fit for your company. In about 15 minutes, you can get a short list of solutions for your business, saving you weeks of research. And it’s completely free. Click here to get started.

Start by acknowledging the scope of your decision—it’ll save you headaches down the line

Meet Jesse Spencer-Davenport, marketing director of BIS, a data extraction and integration solution based in Oklahoma.


Jesse Spencer-Davenport, marketing director, BIS (Source)

When BIS needed new document imaging and capture software to meet their customers’ demands, they found that there was nothing available on the market that met those needs.

“We began our software build with small modules and add-ons for existing software, but it soon became clear that we should probably just build something new from the ground up,” Spencer-Davenport said.

But the project, which started with small modules and add-ons, soon became a monster.

“We’ve poured millions of dollars into building a new software platform,” he said. “The process has been painful and extremely time-consuming.”

If saving money is your goal, building your own software should not be considered an option. According to Gartner research, “through the year 2022, less than half of mission-critical open source investments will achieve substantial cost-saving benefits over third-party commercial alternatives.” (Full report available to clients.)

In addition to lost time and money, here are a few of the other potential hidden consequences of building your own software:

  • Loss of productivity on other projects due to scope creep

  • Loss of support if developers leave to work elsewhere

  • Loss of functionality of an established SaaS solution

Buy software when your priorities are convenience and support

Most companies find that there is already a solution on the market for virtually all of their needs.

“Buying a solution that is well-tested, feature-rich, used successfully by a lot of other companies, and supported with knowledgeable staff is much more efficient (and often cheaper) than going through all [the] steps to build something,” says Zack Hendlin, VP of product for OneSignal, a push notification service.

Hendlin, who also worked on the product teams at Facebook and LinkedIn, learned those lessons the hard way when his development team at OneSignal tried to build their own accounting tool.

“We tried to build a billing system in-house before pretty quickly learning that was a horrible idea,” he said. “Billing systems need to work 24/7/365, be maintained, cover lots of sophisticated cases, and integrate with many systems. We didn’t have many engineers internally who were excited to work on this, and who instead were much more interested in building core product features.”

Hendlin’s team quickly learned that even if you have the engineering resources available to build your own software, you still need lots of other factors to fall in place, including a market need, the buy-in of your development team, and an airtight project plan.

Diana Goodwin, CEO and founder of AquaMobile—an on-demand swim lesson service—learned the same lesson. When Goodwin started AquaMobile 10 years ago, she hired software development contractors to build the software that AquaMobile would run on. Once the project was done, those contractors had moved onto their next project and Goodwin was left with an unsupported system.

“Now, we’ve come full circle and as of 2020 we are buying our software again,” she said. “It’s much easier to have someone else handling the hosting, the product innovation and knowing that if something goes wrong, they have a whole team on it. In 2020, it’s much easier to buy software.”

Build software when your priorities are custom functionality and control

BIS found that, while building their own software was “painful and extremely time consuming”—it still paid off in the end because of their deep industry experience in addition to their technical software development experience. In other words, they knew which gaps in their industry needed to be filled and how to develop the tool to address those needs.

While it wasn’t easy, Spencer-Davenport said that the experiment paid off because “we are in full control of product development lifecycle, we are agile and responsive for new customer demands, our software is purpose-built to achieve exactly what we intended, and we have no dependency on any outside solutions that might change and destroy what we’ve built.”

The price of that payoff included BIS completely evolving as a company from a reseller into a full blown software development firm.

“We’ve had to create new processes, build a growing quality assurance team, and hire product managers,” he said. “I think any organization desiring to undertake a build (vs. buy) has to be ready to fully commit to being a software company.”

In other words, unless you’re prepared for your business to undergo major disruption, you should buy a proven, established solution from a company that can take care of it for you.

Make your decision with confidence by evaluating your resources

If you have the technical resources, if there is a market need, and if you are ready to commit to a long-term project, then you should consider building new software.

If a major development project would sap your resources, if the software you’re thinking about developing is already available from an established vendor, and if you need a software solution in the near future, you should definitely buy software.

Worried about making the wrong decision during times of crisis? Follow our 3-Step Process for Decision-Making During a Global Crisis.

Selecting new business software has its own complications, but Software Advice advisors are ready to help you find the best solution for your business. Click here to chat with one of our advisors online.