When an organization is selecting 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 organization, 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 provides.

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 personalized 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

• Healthcare applications
• Mobile apps
• Logistics and supply chain software

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 popular SaaS solutions is for internal company communications offered by Slack. It is better organised and allows you to set up multiple workspaces, share files, set up meetings using video and audio and numerous other robust features. It would make no sense for a company to create its own custom communication solution. Further while data shared within the company might be important and easily searchable it is still not mission critical. The organisation using the service might at any time switch its allegiance to another SaaS service with no disadvantage.

Other popular SaaS solutions are CRMs like Salesforce and HubSpot. Salesforce CRM boosts an organisation sales process by managing leads and prospects in one place. HubSpot CRM is focused on inbound marketing through advanced technological features and is expanding its services to social media marketing and content management.

Atlassian JIRA for project management, MailChimp and Google Application (G Suite) are other examples of popular SaaS solutions that are ruling the market right now.

Also read: 6 Things to Know Before Planning a Data Migration

Now that we have got an overview of both these solutions, it is time to look at their pros and cons and possibly get a clear idea of what works for your organization.

Pros of custom software solutions

• 100% customizable as per requirements
• Software is fully owned
• The data is owned by the company
• Custom software has a better advantage to integrate with third-party software
• Better reporting and analytics. It can also be integrated with any third-party reporting tool.

Cons of custom software solutions

• Takes a long time to scope and develop
• Initial investment is high (though cost effective in the long run)
• Prone to security risks and bugs
• Greater dependence on developers and they are a high cost centre

SaaS Pros and Cons

Software as a Service (SaaS) has revolutionized the way businesses access and utilize software tools, offering numerous benefits as well as some potential drawbacks. Let’s explore the pros and cons of SaaS solutions in the modern business landscape

Pros of SaaS Solutions

• Normally subscription based so low initial cost of starting up
• SaaS provider owns the IT infrastructure so maintenance cost is theirs
• SaaS solution is already deployed in the cloud, only minor configuration needed
• Hardware and software updates are the responsibility of the provider
• Flexibility to change plans as needed for more functionality

Cons of SaaS Solutions

• No ownership of core code so customisation is minimal
• If it is a subscription model, costs pile up in the long run
• Renting the software so its metaphorical all eggs in one basket.
• Data is stored in provider-controlled database
• The provider may be acquired or shut down
• Number of reports is limited
• Difficulty with regulation compliance
• Data security may be insufficient

Custom SaaS Solutions vs Custom Software Development

Custom software development and custom Software as a Service (SaaS) solutions both involve creating software tailored to specific needs, but they differ in how they are delivered and used. Here are the key differences between the two:

Delivery and Deployment: Custom Software vs Custom SaaS Solution

Custom software: It is not typically offered as a service to multiple clients. It’s built exclusively for the organization that commissions it.

In custom software development, organizations have their own IT teams capable of managing the software’s deployment, updates, and support, while others prefer to outsource these responsibilities to the development agency or a third-party service provider. The business could also opt for a combination of both.

SaaS custom software – SaaS custom development on the other hand, is a cloud-based software solution that is developed to cater to the specific needs of a single organization but is hosted and maintained by the SaaS provider.

The organization accesses the software over the internet through a web browser or other client applications, eliminating the need for local installations and server management. With custom SaaS solutions, the SaaS provider is responsible for maintaining and supporting the software. This includes updates, security, and infrastructure management.

iTech’s proprietary software, DocExtract, is configurable to a businesses’s exact requirements. DocExtract, uses AI and machine learning to scan, analyze and categorize and digitize any document.

Scalability: SaaS custom software vs Standalone software

Custom software development: Custom software can be designed with scalability in mind, allowing it to grow and adapt to the changing needs and size of the organization. It often requires additional development and infrastructure resources.

SaaS custom development: Custom SaaS provider can handle the infrastructure and scaling requirements as the organization grows, making it more adaptable to changing business needs.

Cost and Ownership: Custom SaaS Development vs Custom Software Development

Custom Software Development: Developing custom software from scratch can be expensive in terms of initial development costs, ongoing maintenance, and support. The advantage is that custom software is designed and developed to meet the unique and specific requirements of an organization. It can be finely tuned to address particular business processes, workflows, and industry-specific needs. The ownership of the software belongs to the business client only.

Custom SaaS: Custom SaaS solutions may involve subscription or licensing fees, but they can be cost-effective compared to custom software development since the infrastructure and ongoing support are included.

The choice between in-house and external maintenance and support largely depends on the organization’s preferences, capabilities, and the terms of the development contract. It’s essential for organizations to clearly define roles and responsibilities in the contract to ensure that maintenance and support are properly addressed and that the software operates effectively over time.

Are you still confused about building your own solutions or subscribing to off the shelf software? Get in touch with us and our experts will help you understand the pros and cons of enterprise software vs SaaS software and what would fit your business requirements best. We have developed customized multi-channel software and our team of software engineers are also experienced in developing SaaS application for Sales, Invoicing and billing, CRM etc.

Are you still confused about building your own solutions or subscribing to off the shelf software? Get in touch with us and our experts will help you understand the pros and cons of enterprise software vs SaaS software and what would fit your business requirements best. We have developed customized multi-channel software and our team of software engineers are also experienced in developing SaaS application for Sales, Invoicing and billing, CRM etc.