Choosing whether to build custom software or buy an off-the-shelf solution is one of the most important decisions a technology leader can make. Get it wrong, and you could be burdened with an expensive, inflexible albatross that doesn't fit your business. But get it right, and you'll have a high-performance asset that accelerates your growth for years to come.
When we talk about "building," we mean developing software from scratch—whether in-house or with an outsourced team—to your exact specifications. "Buying" refers to purchasing pre-built software, either via licence or subscription, that offers the needed functionality out-of-the-box.
In many cases, the choice is clear. You're not going to build your own CRM or HR system when robust platforms exist in the market. But for software that's core to delivering your product or service, there are nuances to consider. Here are the essential questions to ask when making the decision:
If the software is central to your value proposition or competitive advantage, having full control over its development is often essential. Atlassian, for instance, would never consider buying its flagship Jira product; it's the heart of their business. Conversely, if the software simply supports standard back-office functions, pre-built can likely get the job done.
If your workflows and business logic demand significant customization, trying to shoehorn them into a rigid, third-party system can lead to frustration and inefficiency. But if the software's functionality aligns neatly with established practices in your industry, there's little risk buying a tailored solution—in fact, you may benefit from the vendor's domain expertise.
While buying may require a substantial upfront investment, the total cost of building—including design, development, infrastructure, and ongoing maintenance—often exceeds it, especially long-term. Critically though, building lets you retain full ownership of the asset and spread costs over time. For early-stage startups, it can be the difference between survival and running out of runway.
Even with sufficient capital, if you lack the talent to architect and implement a complex system, building becomes a risky proposition. You'll need to allow ample time to recruit the right team and foster a culture of engineering excellence. If time-to-market is a driving factor and you need a proven solution today, buying is likely the prudent path.
Consider your anticipated growth when deciding whether to build or buy. While third-party platforms offer some scalability, you'll be relying on the vendor to make updates on their timeline. When you control the software, you can optimise performance, reliability, and user experience to effortlessly handle volume from day one. If you'll need that level of scalability baked-in, lean towards building.
Weighing these questions objectively will guide you to the right decision. But if you're still unsure, it can help to visualise the tradeoffs of building vs buying:
Build:
Buy:
The most innovative companies usually do both — they buy software for commodity needs and build their own for strategic initiatives. Slack knew messaging was core to its vision, so it acquired and built upon an existing tool to accelerate development. MongoDB recognized its database would be the heart of its business, so it built it from scratch to retain full control.
As you're making your own decision, we recommend pressure testing your thinking with experienced technologists who've tackled similar challenges. At Luminos, we specialise in helping organisations design, develop and scale software that drives their success. Tell us about your unique situation at hello@luminos.software and let's start building your future, today.
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