Choosing between custom vs. off-the-shelf software

11 min read
February 13, 2023

Picture yourself trying to pick a project management platform for your team.

Would you subscribe to a ready-made platform like Asana or invest in building one from scratch?

Although there are many great commercially available solutions, you’d be surprised how many legitimate reasons there are for going the custom software route.

That’s what we’re going to talk about today.

You’ll learn about custom and off-the-shelf software, their differences, and when to pick one over the other.

What is custom software?

Custom software is built specifically for a company or organization, and owned by that company outright—in sharp contrast to off-the-shelf software, where you merely buy the right to use.

Such custom solutions are meant for internal use and aren’t usually publicly available for sale. As such, custom software is also called bespoke or proprietary software.

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Customized solutions are required for organizations with unique workflows or use cases that commercially-available software can’t handle in a satisfactory manner.

When done right, bespoke software can speed up operations or lower costs, giving businesses a competitive advantage.

For example, let’s look at one of the more popular custom software solutions—enterprise resource planning (ERP) systems.

ERP system

Source: Tech Target

When a business is in the startup phase, it often uses low-cost, commercially available solutions to manage operations.

For instance, the warehouse team might use Excel spreadsheets to track inventory.

However, as the company grows, these tools become increasingly cumbersome and inefficient to use. They end up becoming liabilities.

This is where an ERP comes in.

ERP systems automate data tracking for all areas in an organization, then allow staff to manage them from a centralized location.

This helps the company manage its resources and deliver better customer service while lowering costs.

To achieve this capability, the ERP system needs to be tightly integrated with the nuances and quirks of the company’s operations.

Needless to say, you need a custom development solution for this.

What is off-the-shelf software?

Off-the-shelf software entails commercially available platforms that anyone can buy. They are ready to use out-of-the-box, with minimal customization needed, if at all.

Commercially-available software is designed to cater to a wider range of people and businesses than custom software. Because of this, such solutions are generally easier to use and install.

They’re also cheaper upfront.

Chances are that every software you’re using right now—from the browser to the underlying operating system—is all off-the-shelf.

Every industry and use case, from graphic design to accounting, has corresponding off-the-shelf software.

As such, it’s safe to say that there are significantly more off-the-shelf software solutions available on the market than custom ones.

Off-the-shelf software examples

Source: FounderJar

Off-the-shelf software comes in two forms—applications and software-as-a-service (SaaS) platforms.

Applications or apps are the traditional software you need to install on your computer.

Because they are downloaded to your machine, you can usually use at least some of their capabilities offline, without an Internet connection.

Apps also entail complex calculations and stunning graphics, as they can draw on your computer’s hardware.

In contrast, software-as-a-service (SaaS) platforms sit on the software developer’s server. Users can access it using their browser, just like any other website.

SaaS application vs non-SaaS application

Source: Cloudflare

The main advantage of the SaaS model is that you can access the software on any device, which makes it suitable for remote work.

The software is also automatically maintained and updated for you.

Of course, the drawback of SaaS is that you need to be online to use it, so if you encounter connection problems or your work halts.

Nowadays, more and more software is available through a SaaS model. Examples include Google Suite, Salesforce, and Asana.

In addition, many offline apps have SaaS counterparts, such as Adobe Photoshop.

But regardless if it’s SaaS or not, the defining characteristic of off-the-shelf software is that you don’t own them. When you buy or subscribe to a software, you merely acquire the right to use it.

Notice that you often must agree to an End User License Agreement (EULA) to use your software, which limits what you can do with it.

EULA common clauses

Source: Yashaa Global

This limitation has plenty of implications, which we’ll discuss in the next section.

Custom vs. off-the-shelf software: key differences

Now that we’ve defined custom and off-the-shelf software, let’s delve more into their differences.

Here’s a quick overview:

Off-the-shelf vs custom software

Source: Code IT

Let’s start with off-the-shelf software.

Off-the-shelf software: pros and cons

The biggest advantage of off-the-shelf software is that it’s readily available, which makes it easy for the companies that rely on them to start their operations right away.

For instance, they don’t need to spend time developing an accounting system from scratch. They can instead buy commercial accounting platforms like QuickBooks or Xero.

Off-the-shelf software is also relatively cheaper compared to bespoke solutions. You can buy most offline applications for just a few hundred dollars.

And with SaaS’s subscription-based pricing, you can cut the cost to just a few dollars monthly. Some even have free subscriptions.

For example, take a look at Asana’s pricing scheme:

Asana pricing scheme

Source: Asana

Off-the-shelf software is also easy to install. Most such solutions include automated installation packages that take you through the whole process.

And in the case of SaaS, you don’t even need to install anything.

Lastly, off-the-shelf software is less risky to use overall. There are already hundreds of existing users and online reviews that you can reference to see if a particular solution is right for you.

Most software companies also offer trial periods so that you can evaluate their product before making a commitment.

However, off-the-shelf software also has its drawbacks. The biggest is that it could limit your company in the long run.

Most off-the-shelf software cannot be modified or integrated into your existing setup unless the developer designed it to be.

This could become a problem as your company grows and you need a faster data flow between different departments.

It’s also likely you’ll never be using all of the features in off-the-shelf software. Moreover, even with all these options, chances are that it won’t be 100% custom-fit to your workflow.

You’ll have to develop workarounds and compromises that could lower your efficiency.

Custom software: pros and cons

The biggest reason to use custom software is that it’s tailor-made to your needs, which can help your business become more efficient.

Many niches like finance and healthcare typically have unique workflows that warrant a customized solution.

One example is the glucose tracker app we developed for a German healthcare firm.

The client detected a need in the market for a solution that would allow diabetic patients to track their blood sugar levels and share them with their physicians. So we made one.

Unigluko app

Source: DECODE

Another big advantage is that you get full ownership of the software. That means you’re free to modify it as you see fit. This offers many possibilities.

For one, it’s easy for you to integrate bespoke software with your existing systems. This further enhances your company’s productivity and efficiency.

Alternatively, you can rent or sell your software to the public. That’s what we did with Shake, our internal debugging tool that we’ve since offered to other developers.

Shake app

Source: DECODE

You’ll also be surprised to know that custom software could actually save you money.

This is because the time and money you are likely to spend fitting an off-the-shelf solution to your workflow, or vice versa, can often rival the development cost involved in creating custom software.

In contrast, custom software is close to 100% effective immediately upon deployment.

Lastly, since bespoke software is exclusive to a company, it gives the client a competitive advantage that no one else can claim.

However, all this capability comes at a price. Custom software takes time and a large upfront cost to build.

The lengthy process could take months and, on average, can set you back thousands of dollars.

This means that bespoke software isn’t ideal for tackling an urgent, critical issue. You need to plan for it.

Custom software development process

Source: Scalefocus

Also, there’s a chance that your custom software won’t work in the way you intended. Maybe the development team misunderstood the requirements, or something was off in the planning.

When this happens, you’re typically out of luck. It’s not as easy buying an alternative as you can with off-the-shelf software.

However, that risk is typically offset by the amount of oversight you exercise over the project.

For instance, at DECODE, we rely on the Scrum methodology, which gives the client an opportunity to check in with the team regularly, so they are always aware of the direction in which the project is going and its current status.

With that being said, not every situation will call for custom solutions. In the next section, we’ll talk about the instances when a commercially available solution is a better idea.

When to choose off-the-shelf software

Off-the-shelf software is generally the better choice if you have a simple operation and want an equally straightforward software to match that.

Common tasks like email and messaging are simple enough that they’re probably best met with an off-the-shelf solution.

Commercial software is also your best bet if you don’t have the time and resources to commit to custom software development.

That’s because even the simplest software will cost thousands of dollars to create, as the below infographic by Quantox shows.

Software development cost example

Source: Quantox

Because of this, custom software is often out of reach for most startups. In most cases, they’re better served with one or more off-the-shelf software.

They should only consider bespoke solutions if they’re hitting their growth phase.

One other thing to consider is that it costs money to maintain and update custom software continually. But not so with off-the-shelf software.

Developers often release patches for free. In the case of SaaS, it’s even automatically applied for you.

However, in certain cases, going for a custom solution from a reliable team of developers, like DECODE, really pays off. Let’s go over some of them in our next section.

When to choose custom software

Ideally, a custom software solution is a good choice if your business has a complicated workflow or an innovative solution.

A good example is the messaging app we developed for Royal Caribbean.

They needed a communications platform that allowed thousands of ship crew to stay in touch with each other—even with no Internet connection and push notifications.

So, the solution was a real-time communication app named CrewApp. What we did was to provide multiple points of communication, from 1-on-1 chats to a guest activity calendar.

The app was also capable of ship-to-shore communication.


Source: DECODE

The situation required specific solutions, so that’s what we provided.

Another reason to pick custom software is if you have security concerns with off-the-shelf options.

While commercially available software products should be secure, it’s not guaranteed.

Moreover, your company might have specific security protocols that an off-the-shelf solution can’t cover.

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And if you want to run everything in your network, SaaS platforms are out of the question.

A custom approach allows you to implement the exact security technologies you need. Again, it all goes back to having a solution tailor-fit to your needs.

Larger companies with dozens of departments can also benefit from custom software. That’s because you can integrate them using an ERP platform or similar.

This gives your business outstanding speed and mobility.

Custom software integrations example

Source: Far Reach

Custom software is also the best route if you want full ownership and control over your software, allowing you to modify it and even monetize it.

You can even have another development team improve upon it if you wish.

Lastly, custom software might be a good strategy for gaining an advantage over your competitors. And since it’s proprietary, they would have difficulty copying it.

The bottom line is that custom software development should be your pick if you value efficiency and flexibility.

Need a custom software development team?

The choice of a custom solution over a commercial one really boils down to your needs and situations. If the numbers make sense, go for it!

Feel like you need a custom software approach? The next challenge is partnering with the right team.

To help you, we’ve put together an excellent resource on the top qualities you should look for in a development team.

Written by

Marko Strizic

Co-founder and CEO

Marko started DECODE with co-founders Peter and Mario, and a decade later, leads the company as CEO. His role is now almost entirely centred around business strategy, though his extensive background in software engineering makes sure he sees the future of the company from every angle. A graduate of the University of Zagreb’s Faculty of Electrical Engineering and Computing, he’s fascinated by the architecture of mobile apps and reactive programming, and a strong believer in life-long learning. Always ready for action. Or an impromptu skiing trip.

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