🏗️ Build vs. Buy Calculator
Compare the total cost of building software in-house versus buying a ready-made solution.
Build vs Buy Considerations
Beyond cost: Build gives control & differentiation but requires internal expertise. Buy is faster and de-risked but creates vendor dependency. Also consider: competitive advantage (build), time to market (buy), scalability needs, and total cost of ownership over 5–7 years.
The Build vs Buy Decision Framework
Build vs buy is one of the most consequential decisions a technology team makes. Building gives you perfect fit and full control but carries high upfront cost, time-to-market delay, and ongoing maintenance burden. Buying gives you faster deployment and shared development costs across many customers but means accepting vendor constraints, integration complexity, and recurring fees. The right answer depends on whether the capability is core to your competitive advantage.
The Hidden Costs of Building
Teams consistently underestimate build costs by 2–3x. Common omissions: DevOps and infrastructure setup, security audits and compliance implementation, documentation and training materials, ongoing bug fixes and technical debt, engineer time that can't be spent on core product, and the opportunity cost of delayed time-to-market. A "6-month project" regularly becomes 18 months when these factors are included.
People Also Ask
Buy for commodity capabilities not core to your competitive differentiation: payroll processing, email delivery, identity/authentication, CRM, accounting, payment processing, customer support software. If dozens of mature vendors solve the problem, the buy case is almost always stronger. Build only when the capability is genuinely unique to your business and a strategic differentiator.
Most build-vs-buy analyses show the build option breaks even (becomes cheaper than subscription) in 3–7 years, if it ever does. The ongoing maintenance cost (typically 15–20% of initial development cost annually) often makes break-even elusive. Many teams build, then switch to a vendor solution 2–3 years later at significant total cost.
Multiply the engineering hours needed to build by the revenue or savings those engineers would otherwise generate working on core product features. If your product team generates $500K in value per engineer per year, a 3-engineer 6-month project has a $750K opportunity cost on top of salary costs.