November 5, 2020 • by Dora & Andrew

Enterprise Software vs SaaS: What is Better for Business

Business Process Automation

Each step in business requires a thorough analysis and understanding of outcomes and benefits. When it comes to deciding on the type of software to use for your business processes, there are two options – SaaS or Software as a Service and custom enterprise software. So which one to choose to get the best outcome?


Let’s take a close look at core differences, pros, cons, and reasons to choose one solution or another.


What is SaaS


SaaS or software as a service is one of the cloud-based services when subscribers are provided with out-of-the-box application software fully serviced by a provider. Such a type of solution is also called software on demand.


SaaS providers independently manage the application, providing customers with access to certain functionality on a subscription basis. In plain English, the business using the SaaS solution does not control or own the infrastructure needed to host the service and just pays money to use it.


The SaaS nowadays offers a wide range of functionality: from CRM to accounting systems. As a rule, the functionality provided by SaaS solutions is built according to the common practice of business process organizing. So typically, you have a choice between several packages of predefined functionality at a different price.


What is Custom Enterprise Software


Custom software is a solution built from scratch and according to the specifics of a particular business. It includes the very functionality the company and stakeholders need. Custom enterprise software solutions are often developed by software vendors specializing in Java, PHP, and other enterprise-oriented technologies.


The process of development usually involves the following steps:



To build the system fully corresponding to the business needs, the first step is to collect all the information about its processes and analyze the requirements. Then the dev team draws up tech documentation, and the development process begins.


The main advantage of a custom software solution is that it’s fully tunable: from the uniaue features to scalability.


SaaS vs. Custom Enterprise Software: pros and cons


The core difference between software-as-a-service and custom software is that the former is more a uniform commodity, while the latter is a unique solution. Let’s take a look at these solutions in the context of aspects crucial for any business.


1. Speed of Implementation & Initial Setup




  • Almost does not require time to deploy, but requires the time to find the best-fit solution
  • Rapid user training and integration in company processes


Custom enterprise software


  • The implementation takes six months and more, depending on the scope
  • Usually takes time to train the users and adopt the solution in a company


2. Customization and Improvements




  • Have multiple features already tested, but may have features not meeting your requirements
  • Regular updates, but, again, new features may not meet your objectives
  • May lack several features specifically important for your business
  • As a rule, there is a trial period to test everything


Custom enterprise software


  • Fully customizable: you define the features
  • You also define all the updates and new features to be developed


3. Integration with third-party services




  • APIs allows integrating with a wide (and set) range of third-party software
  • May arise problems with integrating with your current software if SaaS does not offer the needed APIs


Custom enterprise software


  • Since developed according to the company requirements, it’s built to integrate with any software you need
  • At the very start of the project, you define what services, solutions, or your current software it should be integrated with


4. Costs




  • Paid by subscription, which helps to plan your budget
  • No additional cost as new features are released


Custom enterprise software


  • Paid for the work done (the cost differs depending on the scale and specifics of the project)
  • The cost is higher as the development is time- and resource-consuming
  • Maintenance costs may be low if no new features or changes are required


5. Security




  • The software provider defines security terms
  • You have to register and transmit certain information to use the software


Custom enterprise software


  • You define the security terms you need
  • No need to transmit the data to the third-party services


How to choose suitable enterprise software


Both SaaS and custom enterprise apps can be a good option, but you should consider your goals, business specifics and possibilities. Moreover, business applications are not about software but business processes and the people involved.



So what to choose?


1. When to choose SaaS


  • Small or mid-size business
  • The business processes are not complex or even undefined
  • You have no internal IT team or any employees with IT skills
  • The IT infrastructure is small, or there is no any at all
  • Your company has a stable business model which requires a few changes
  • You have no budgets to spend on complex software
  • Your business does not require highly-specific software


2. When to choose a custom solution


  • Enterprises and sector-specific businesses usually rely on custom software development
  • Your company has complex and well-established business processes
  • You have an in-house IT team or employees with a strong IT background
  • You have a well-established IT infrastructure which requires upgrades
  • Your company’s business model is continually changing
  • You have enough time, money, and resources to develop a custom software
  • Your business requires a unique solution




When you choose between a custom or ready-made cloud solution for your business, there are two main factors to consider: the specifics of processes in your company and the budget.


Custom software is all about high customization and adaptation to all the tiny details of business. That’s why the development of such a solution needs time and money.


SaaS is, as a rule, a quick and affordable solution for companies whose processes do not require unique software solutions.


If you need a unique or customizable enterprise software and don’t know where and how to start, you’re welcome to contact us and get a free consultation!

Written by
Marketing Manager
Head of Dev Department


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