Custom Software vs Off-the-Shelf: Finding the Best Option for Your Business

No modern business can succeed without having robust software. It differs by purpose, price, level of flexibility, scalability, tech stack, and so on. Many companies stand at the crossroads of whether to buy a ready-made solution or to create something unique.

The right software choice requires a detailed analysis of the short-term needs and the future goals of the business during the project discovery phase. On this page, we compare off-the-shelf vs custom software, their advantages and disadvantages, and give you advice on how to choose what's right for you.

Custom Software vs Off-the-Shelf: Brief Overview

How do the two options differ? Let's outline the major distinctions between off-the-shelf software vs custom software.

Custom software development presupposes that you'll be creating something unique to fit your business demands and will most likely start from scratch. Even if you use some open-source solutions as your "building blocks" to get the development process going, the project will still require planning, custom coding, QA testing, and further development work before the solution is finalized. All of this is entirely your field of responsibility. But in the end, you get a fully customizable solution that belongs to you, which you can modify and scale.

Alternatively, there's plenty of ready-made software available for purchase. It often comes in packages and is subscription based. It can be compared to "mass-market" production and is created for various business types, regardless of size, field, and necessities. Off-the-shelf software is sort of a generic one-size-fits-all approach, appropriate for many. Due to its mass adoption, there are reviews and feedback you can fall back on. Plus, things get running quite fast once you get access to the solution.

Let's take a closer look at custom vs off-the-shelf software. 

Custom Software Pros and Cons

What are the advantages and disadvantages of the custom software creation approach?

Pros of Custom Software

1. Flexibility and No Limits

Custom software vs off-the-shelf differ in flexibility. With custom solutions, you aren't restricted to the out-of-the-box functionality. Both in terms of the feature set and design, you can mold the custom software to suit your needs. The business has challenges and requirements, and you build the solution around them.

Customization opportunities are limitless. If you'll need to make changes at some point, you're more than welcome to do so as adding on extra features or mending the solution isn't a problem. This is, undoubtedly, one of the main benefits of custom software development.

The bottom line is that custom software development is a way to turn your vision into reality. Possibly even outperform your competitors who use ready-made software.

2. Scalability

Another great benefit is that you're the one who creates the code and owns the custom software, not some third party.

Your developers understand the code and know how to amend it. Therefore, you get the complete freedom to shape the software according to your liking at any time of the product development life cycle. If the project or company expands, your software solution can easily scale with it.

3. Ease of Integration

When you decide on building unique software, most likely you'll already have other business assets that are crucial for running the processes. So unlike ready-made solutions, custom software is created:

• for a set purpose;
• on a chosen tech stack;
• to fit well within the existing environment.

Your developers cater the custom software to work with the rest of the solutions in use. Preferably, they must also lay the groundwork for smooth integration with more assets in the future.

By contrast, when comparing custom vs off-the-shelf software, you may face trouble dealing with incompatibility of third-party software or plugins, which often require patching and become project roadblocks. 

4. Better ROI

Of course, you'll need to invest in creating custom software. It may seem like a lot at the beginning. Yet, when you're done, the solution is yours to keep.

So you won't need to pay monthly or annual fees for using third-party software that usually comes on a subscription basis. Hence, you get a plausible return on investment.

5. Solution Security

Security is one more point in comparing off-the-shelf vs custom software. The first is commonly marketed as secure. And since security is the responsibility of a third party, it might seem like minus one headache. But is it trustworthy? The truth is that if there's a vulnerability or data leak, you'll be the one to face consequences, not the third party.

If you go custom, there won't be cases of waiting for the provider to release a security patch or some other unpleasant downtime caused on their side. You're the one crafting the solution and you're the one to take full charge.

You might think that this is a controversial point, but security is a matter to approach seriously, especially in fields like fintech app development. An experienced team can help safeguard the custom software from intrusion to a big extent. Moreover, there are a multitude of tools out there that can catalyze the process of securing custom software. Solutions that let you find vulnerabilities in your web applications are empowering.

Cons of Custom Software

1. Possibly More Resources Required

You'll surely need a bigger budget to create a custom solution. Well, great things also take time. An individual project requires:

• thorough planning;
• wireframing and design;
• and a witty development team to make it happen.

So you must be prepared for the additional costs and extra deployment time if we compare off-the-shelf software vs custom software.

2. You'll Need to Hire People to Create the Custom Software

Again, people as a resource are key for implementing custom software solutions.

Yes, you may have an in-house development team, meaning there's no need to spend additional time and money on recruitment procedures. But do your employees have the resources to spare on a new side project? Can you afford the shift of focus? In many cases, distracting the in-house team from the core business processes isn't an option.

So you face the necessity of hiring people for the custom project.

• Are you going to begin a developer recruitment process to get additional in-house employees? Or are you going to look for freelancers or outsourcing specialists?
• Or maybe you'll decide to hire a dedicated development team?
• And then how do you choose and evaluate software outsourcing vendors?

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There are many other questions you'll have to answer. You'll need to think about the possible web development team structure, not to mention the time needed for detailed project planning, wireframing, execution, and testing.

3. All Fixes Are On You

Since the custom solution is yours, you're the side that supports, amends, maintains, and keeps it running. If something in the custom software goes down or breaks, your team will have to allocate the weak spots and do something about it.

Custom Software Use Cases

What are some custom software examples?

These can be SaaS applications, inventory management solutions, payroll software, or anything else, designed for a specific purpose. CRM (Customer Relationship Management) or ERP (Enterprise Resource Planning) development are common custom software projects.

When does it make sense to invest in creating custom software?

• If existing off-the-shelf solutions on the market aren't enough to answer your project's needs.
• When you have a unique vision of the software and wish to create something completely different or specifically tailored.
• In case your startup budget and other vital resources, including time, are large enough, allowing you to invest in a custom project.
• If you want your own flexible software that you can freely change and scale.

Who chooses custom software development?

This path is often selected by big and established companies. They have the due resources and want their own solution that they can be in full control of (from shaping to further scaling). They don't want to pay nor depend on a third party for maintenance, fixes, and security. Instead, the company amends the solution to their liking.

Off-the-Shelf Software Pros and Cons

So what makes off-the-shelf software worth it and which drawbacks can you come across?

Pros of Off-the-Shelf Software

1. Compatible Pricing

Because package solutions are offered to a broad audience, they usually have moderately reasonable pricing. Cost-efficiency becomes possible as multiple users "chip in" to support the solution. Will it be cheaper than custom developing your own software? In most cases, yes:

• some off-the-shelf software is offered via subscriptions with monthly or annual payments;
• there are usually various plans to select from, differing by inclusions;
• at times, there might even be a free trial period for select MVP tools.

2. Easy Launch and Faster Time to Market

One of the best things about off-the-shelf software is its accessibility. In many scenarios, you purchase the solution, get access to it, and then make the tweaks.

A great deal of the features are already there. Plus, many third-party solutions come with fast automated installation or as a simple-to-use constructor with intuitive building blocks.

This grants the possibility for quicker time-to-market and MVP launch or incorporating the features you need almost straight away. Can it help you get things done faster? Sure, especially when comparing custom vs off-the-shelf software in terms of development timeframes.

3. Included Maintenance and Support

No worries on your end about improving the package solution. All the upgrades, tweaks, new feature releases, and maintenance are the provider's area of liability. You don't have to regularly think about how to make the ready-made software better, safer, or more convenient. This is included in the package.

And if you encounter some flaws, you may turn to the provider for assistance. Usually, there's a simple customer support procedure to back you up if something's wrong.

But make sure to check twice whether the software support services are free! Some providers have them as an optional add-on.

Cons of Off-the-Shelf Software

1. Off-the-Shelf Software Isn't Free

You'll be paying to use the software. In fact, although some features may be free of charge (or come with a "no pay" trial period), you'll still have to spend money on them.

In essence, if you don't pay for the software or don't do it in the due time frame, you lose your access. It's as simple as that. The same goes for hidden costs, for instance, for support services that you might need to pay for separately.

2. Compatibility Challenges

Furthermore, you'll still need people to tweak the ready-made solution. Even if it's template-based, integration might not be instant.

After getting access to the off-the-shelf software, you'll have to connect it to vital business assets, for instance, with your CRM, or make other integrations to get the software to work.

Compatibility matters can be time-consuming and challenging. Be prepared to face probable compatibility issues if the packaged software can't be simply integrated with your system or environment.

3. Downtime and Security Matters

Let's say the provider decides to release a newer version of the ready-made software or some of its parts (for example, a security patch). This is great news, right? The software is getting improved, the bugs are fixed, and you get to reap the rewards.

But such operations also generally imply downtime or other restrictions (eg., until you make the consequent upgrade on your end). And if a problem occurs on the provider's side, you're left with no alternative other than to wait until they fix it.

Will this harm your business or cause revenue loss? It's probable. But, as a client who purchased the off-the-shelf software, you're powerless in such situations.

This is especially hazardous in the case of security. Remember, you're the one who holds responsibility for customer data and other business-sensitive information. So it could be an area of risk.

4. Ready-Made Software Isn't Flexible

This is the main downside of the off-the-shelf software vs custom software comparison. Although the commercial software might seem like a good choice now, will it be enough for you in a year? There's a big chance that you'll "grow out" of it faster than you predicted. And as your business or project expands, the ready-made solution may no longer live up to your expectations.

This brings the acute necessity to customize the purchased software. Sadly, the odds are that you won't succeed with that much.

What do you do if you need to make changes to the feature set that comes in the package solution? Say, you'd like to add new functionality or modify what's provided by default to fit your needs.

Your only option here is to contact the provider and try to find out whether that's possible. Sometimes it is, but off-the-shelf solution customization is:

• trickier than it sounds (if at all possible);
• requires a lot of code review;
• and may come at a price.

The bottom line here is that the flexibility of out-of-the-box software is limited, it wasn't even intended.

5. Excessive Features Can Slow You Down

Extra features that you aren't using can become a big problem. Let's put it this way: what makes out-of-the-box solutions attractive? That they are multi-purpose. Meaning their creators do their best to suit the needs of the majority of businesses, "ticking the boxes" and presenting features that are needed most often.

And while it sounds great, this may also make the code heavier and negatively influence the performance. In other words, excessive features, unused code, and other bloatware are roadblocks that can backpedal the entire solution. With off-the-shelf vs custom software only the latter gives you a chance to shape the code.

What if you don't need a "must-have" block that slows you down? Can you just not use a piece of the commercial solution or "cut it out"? Most often than not, you can't.

Say, you're building a marketplace and you've decided to purchase and link up third-party payment software like Stripe, PayPal, or Braintree. This ready-to-use solution incorporates 20 payment options, 4 of which are obligatory to use and output on the front end. But what if you only need 2 of the options, and the remaining unnecessary 2 slow down the page loading times? This makes your users unhappy with the lengthy checkout process and negatively influences your conversions. What can you do about it? Sadly, not much, as your developers most probably won't have access to the code's fundamentals to optimize it. You have no choice but to:

• display 4 payment options, hoping that the provider will change the terms someday;
• search for other analogous third-party software;
• or you can start building your own solution.

Off-the-Shelf Software Use Cases

What can be considered commercial software?

Basically, any SaaS (software-as-a-service). Accounting software, ready-made CRMs, startup analytics solutions (like Mixpanel or Amplitude), invoice generators, or email suites are good examples.

In which scenarios is it wise to opt for off-the-shelf software?

• If the software that's available on the market covers your needs.
• When you're limited in time and money.
• In case you don't plan to scale or greatly change the purchased software.

Who chooses out-of-the-box solutions?

Generally, off-the-shelf software is chosen by startups or early-stage companies for the sake of speeding up the development processes and saving money. The same goes for well-established companies who don't wish to invest in custom development (at least not right away) and want a faster time to market.

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Off-the-Shelf vs Custom Software: Which Is Better?

Frankly, there is no right answer. Every case is individual. At times, out-of-the-box software is the most reasonable choice, especially if there's a ready solution on the market that comes at a fair price and answers your needs. This way, you spare the time and resources on creating something one-of-a-kind, but you need to consider how the business will change in the long run. On the other hand, for those who have a unique vision and would like to have the chance to own, change, and scale the solution, custom software is the right way to go.

If you're looking for a team of professionals to make it happen, feel free to reach out to Upsilon for custom software development services. Upsilon is a trustworthy tech partner that's ready to help early-stage startups and growth-stage startups create successful products.