SaaS vs Custom Web Apps — Which Is Right for Your Business?

Should you subscribe to a SaaS platform or invest in a custom web app? It is a question that comes up constantly for UK businesses looking to improve their operations with technology. The answer depends on your specific situation — your budget, your team size, how unique your processes are, and how long you plan to use the software. This page gives you a clear framework for making that decision.

At Pulse Code, we build custom web applications as part of our custom web app development for UK businesses service. We are naturally biased towards custom solutions, but we also believe in giving honest advice. Sometimes SaaS is genuinely the better choice, and we will tell you when that is the case.

SaaS stands for Software as a Service. It is software hosted by a third-party provider and accessed through a web browser, usually on a monthly or annual subscription basis. You do not own the software — you rent access to it.

Common examples include Slack for communications, Xero for accounting, HubSpot for CRM, Monday.com for project management, and BreatheHR for people management. These tools are pre-built, ready to use, and designed to serve a broad range of businesses with similar needs.

SaaS products typically charge per user per month, with different pricing tiers offering different feature sets. Setup is quick, and the vendor handles hosting, updates, and security.

A custom web app is software built specifically for your business. It is designed, developed, and deployed to match your exact requirements. You own the code, control the data, and can modify the application as your business evolves.

Custom web apps run in the browser just like SaaS products, but they are tailored to your workflows rather than offering a one-size-fits-all solution. They can integrate with any system you use, handle any process you need, and scale to any size your business grows to.

The trade-off is that custom apps take longer to build and cost more upfront than subscribing to an existing product. However, they eliminate ongoing subscription fees and give you capabilities that no off-the-shelf tool can match.

SaaS Advantages

• Low upfront cost — start for as little as a few pounds per month
• Immediate availability — sign up and start using it today
• No technical maintenance — the vendor handles updates, security, and hosting
• Community and ecosystem — large SaaS platforms have extensive integrations and support communities

SaaS Disadvantages

• Recurring costs compound — per-user fees become expensive as your team grows
• Limited customisation — you adapt to the tool, not the other way around
• Vendor lock-in — your data lives on someone else's servers, and migrating away can be difficult
• Feature bloat — you pay for features you never use, and the interface becomes cluttered
• Price increases — vendors can raise prices at any time, and you have no leverage to negotiate

Custom Web App Advantages

• Perfect fit — built around your exact processes and requirements
• Full ownership — you own the code and the data, with no vendor dependency
• No per-user fees — add as many users as you need without additional cost
• Competitive advantage — capabilities your competitors cannot replicate
• Long-term value — the asset appreciates as you add features and it becomes more central to your operations

Custom Web App Disadvantages

• Higher upfront cost — development requires an initial investment
• Longer setup time — building takes weeks or months rather than minutes
• Maintenance responsibility — you need a development partner or in-house team for updates and fixes

The cost comparison between SaaS and custom web apps changes dramatically over time. Here is a realistic example:

Scenario: A business with 20 team members needs a project management and client portal solution.

• SaaS option: £40 per user per month = £800/month = £9,600/year. Over 3 years: £28,800. Over 5 years: £48,000. And that is assuming no price increases.
• Custom option: £18,000 build cost + £2,400/year hosting and maintenance. Over 3 years: £25,200. Over 5 years: £30,000.

In this example, the custom app becomes cheaper after roughly 22 months. And it delivers a better fit, more flexibility, and full data ownership. For a detailed breakdown of custom development pricing, see our guide to the cost of web app development in the UK.

The break-even point varies depending on team size, the SaaS product's pricing, and the complexity of the custom build. But for teams of 10 or more, the economics almost always favour custom within 2 to 3 years.

SaaS is genuinely the right choice in several situations:

• Standard processes: If your needs are generic — basic accounting, email marketing, simple CRM — a well-established SaaS product will serve you well at a reasonable cost.
• Very small teams: With fewer than 5 users, per-user SaaS fees stay low, and the convenience outweighs the benefits of custom software.
• Short-term needs: If you need a tool for a specific project or a limited period, a monthly subscription makes more sense than a custom build.
• Rapid experimentation: When you are still figuring out what your business needs, SaaS lets you try different tools quickly without committing to a custom build.
• Highly regulated domains: Some SaaS platforms in areas like payments or healthcare come with built-in compliance that would be expensive to replicate in custom software.

Custom software wins when your needs go beyond what generic tools can handle:

• Unique workflows: If your business processes are genuinely different from the standard, no SaaS product will fit without painful workarounds.
• Growing teams: Once you pass 10 to 15 users, per-user SaaS fees start to hurt. A custom app eliminates that scaling penalty.
• Multiple tool replacement: If you are using 3 or 4 SaaS tools that partially overlap, a single custom app that does everything is often simpler and cheaper.
• Data sensitivity: When you need full control over where data is stored and who can access it, custom software gives you that control.
• Competitive differentiation: If your technology is part of your value proposition to clients, a custom app lets you offer capabilities that competitors using off-the-shelf tools cannot match.
• Long-term strategy: If you plan to use the software for 3 or more years, the investment in custom development pays for itself and then some.

For a deeper dive into the advantages of custom-built solutions, read our article on why custom web apps beat off-the-shelf tools.

Use these questions to guide your decision:

• Are your processes standard or unique? Standard processes suit SaaS. Unique processes need custom software.
• How many people will use the tool? Under 10, SaaS is usually fine. Over 10, start doing the maths on custom.
• How long will you use it? Under 2 years, SaaS. Over 2 years, consider custom.
• How important is data control? If data sovereignty matters, custom gives you full control.
• Are you using multiple tools to cover one process? If yes, consolidating into one custom app is often the smarter move.
• Is your software a competitive advantage? If yes, build custom. If it is just a utility, SaaS is fine.

If you are still unsure, talk to us. We will give you an honest assessment of whether custom development makes sense for your situation, or whether you are better served by an existing product.