You're probably paying for several SaaS subscriptions right now. Some of them are great fits. Others are close enough. And at least one of them has you working around it every single day, bending your processes to match software that was never designed for your specific situation.
This article explains what SaaS actually is — but more importantly, it helps you answer the question underneath that frustration: at what point does it make more sense to build your own SaaS product than to keep paying for someone else's?
What is SaaS? The definition
SaaS stands for Software as a Service: software delivered over the internet as a subscription, without any local installation.
You use it through a browser or app. The vendor manages the servers, updates and security. You pay monthly or annually and always have access to the latest version. That's the model — and it's a good one, when the product fits your needs.
The abbreviation SaaS (pronounced 'sass') refers to the delivery model itself: software offered as a service, not a product you buy once and own.
Examples of SaaS — and what they reveal
Well-known SaaS products include Slack, Salesforce, Google Workspace, and Mailchimp. These are built for the broadest possible market, which is exactly what makes them powerful for some companies and a poor fit for others.
But there's a second, less visible category: companies that stopped paying for off-the-shelf SaaS and had a custom equivalent built instead. For example:
- A logistics company that replaced three separate SaaS tools with one custom platform built around their actual dispatch workflow
- A B2B software company that built its own customer portal instead of stitching together a CRM and a helpdesk tool that never quite synced
- A professional services firm that turned its internal process into a SaaS product and started selling it to others in their industry
These aren't outliers. They're companies that ran the numbers and realised that custom-built was cheaper and better than continuing to subscribe.
How SaaS works technically
You don't need to be an engineer to make a build-or-buy decision — but understanding the architecture helps you ask better questions and evaluate proposals more confidently.
Multi-tenancy is the foundation of almost every SaaS product. Multiple customers share the same infrastructure but never see each other's data. Think of an apartment building: everyone shares the structure, but each flat is private. This is what makes SaaS economically viable — the vendor spreads infrastructure costs across many customers.
Cloud hosting means the software runs on servers from AWS, Google Cloud or Azure. No one company owns the hardware. This makes SaaS accessible from anywhere and easy to scale.
Subscription billing in a well-built SaaS product is tied to actual usage: number of users, active features, selected plan. Payment integrations handle this automatically.
Automatic updates mean users always work on the latest version. No manual installs, no IT rollouts.
When you build your own SaaS product, you control all of these layers — which means you also choose how they're configured, what data you keep, and how the product evolves.
The advantages of SaaS — from both sides
If you're buying SaaS
- No servers to manage or install
- Access from anywhere with an internet connection
- Automatic updates and security patches
- Low upfront cost, pay as you go
- Fast to get started
If you're building SaaS
- Recurring revenue instead of one-off project income
- One codebase serves many customers — costs don't grow linearly with users
- You own the product, the data, and the roadmap
- SaaS businesses are valued at a significant multiple of revenue — far higher than traditional software companies
- You stop depending on a vendor's pricing decisions or feature priorities
Buy or build? The real question
This is where most SaaS articles stop. We'll go further.
When buying is the right call
Buying an existing SaaS tool makes sense when the product covers 90% of what you need, the annual cost is reasonable relative to the value, and the compromises are small enough that your team works around them without friction. For standard functions — email, project tracking, accounting — buying is almost always faster and cheaper.
When building starts to make sense
Three situations shift the balance toward building:
-
You're paying a lot for tools that only partly fit
If your annual SaaS spend is above €30,000 and your team spends meaningful time working around the limitations of those tools, the business case for custom development starts to close quickly. The software isn't serving you — you're serving it. -
Your processes are genuinely unique
Some companies have workflows that no standard product handles well. Every SaaS subscription becomes a compromise. A custom-built platform is an investment in doing things the way they actually should be done, not the way the vendor decided. -
You have a product idea to sell
If you want to offer a SaaS product to your own customers, buying isn't an option — you need to build. This is a different decision with different economics, but the underlying architecture is the same.
A simple cost comparison
Figures are indicative and depend on scope, complexity and maintenance requirements.
The smaller your current spend, the longer the payback period — buying wins. The higher your spend, and the worse the fit, the faster the case for building becomes obvious.
Thinking about building your own SaaS product? See how we approach SaaS development →
When is SaaS the right choice for your business?
An honest decision framework, without the sales pitch:
Buy an existing SaaS product if:
- It covers 90% of what you need with minimal workarounds
- Annual licence costs stay below €20,000
- You want to get started immediately without development time
- You have no plans to sell the product to others
Build your own SaaS product if:
- You have unique processes that standard software consistently fails to support
- You're paying more than €30,000 per year for tools that only partly fit
- You want to stop being dependent on a vendor's roadmap and pricing
- You have a product idea you want to offer to your own customers
Not sure where to start? If you're still in the early stages, developing an MVP is often the right first step — it lets you validate the concept before committing to a full build. For broader questions about when to go custom, our guide to having custom software built covers the full decision in detail.
Frequently asked questions
What is the difference between SaaS and a web application?
A web application is software that runs in a browser — but that says nothing about the business model. SaaS is a web application delivered as a subscription service, where the vendor manages hosting, updates and support. Every SaaS is a web application, but not every web application is SaaS.
What are well-known examples of SaaS?
Slack (communication), Salesforce (CRM), Google Workspace (productivity), and Mailchimp (email marketing) are widely used examples. Many companies also run custom SaaS products built specifically for their situation — either for internal use or to sell to their own customers.
What does SaaS stand for?
SaaS stands for Software as a Service — a delivery model where software is available over the internet as a subscription, without local installation. The vendor manages the software, servers and updates.
Can I have my own SaaS product built?
Yes. Many companies commission a custom SaaS platform, either to replace expensive off-the-shelf tools or to launch a product for their customers. The investment varies by scope but is often recovered within one to three years when current licence costs are high.
