SaaS vs Custom Based Solutions – The Pros and Cons

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When an organisation is selecting a software for its business processes, choices narrow down to 2 options – enterprise software vs SaaS.  The difference between the two is much like leasing versus buying a car. They both have their advantages but which one is suited depends on the purpose it will be used for. For the organisation, it boils down to what custom software can provide them compared to SaaS software.

Before we get to the pros and cons, let’s have a closer look at what each of them provide.

Why use Custom development

Taking the car analogy again, Enterprise Software is software that your company buys and installs on your own servers that may be in-premise or on the cloud. It can be customized to your business needs and you have full control over your data.

Large companies prefer to build from scratch custom software personalised to their business needs. Smaller companies might also prefer to make a substantial initial investment because of payoffs in long-term savings, increased productivity and adaptability to change in any business processes.

The most common enterprise applications that are customised are

  • Automated billing system
  • Payment process
  • Asset management systems
  • Business intelligence
  • Enterprise resource planning (ERP)
  • Business continuity planning (BCP)
  • Enterprise application integration (EAI)
  • HR management
  • Call centre and customer support

Also read: The Pros and Cons of Open Source vs Proprietary Software

Why use Saas or Software as a Service

SaaS is software that runs on the internet and a company pays a subscription to use it. Under SaaS software, the vendor is responsible for hosting the service as well as maintaining databases, upgrading the code, adding new features, and data security. For example, Salesforce has scheduled maintenance twice a month. Of course, subscription-based software service will not meet all business needs but it will meet most of what a business needs.

Popular SaaS Software in the market

Almost all companies big or small use some of the shelf software, particularly for non-critical processes (that is because your data is stored on vendor servers).

One of the most popul