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Enter what it would take to build a tool and what a vendor charges. You get the total cost of each over the years you choose, the year the cheaper option changes, and a year-by-year table.
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Share on XShare on LinkedInBuild-versus-buy estimates go wrong in the same way most of the time: the build is costed as a project and the purchase as a subscription. Three engineers for six months looks cheaper than a $90,000 licence until you add the fifty percent overrun, the engineer who maintains it for as long as it exists, and the hosting. Software you build is a system you operate, with upgrades, on-call, and security patches attached.
Buying has its own hidden lines: integration work, an administrator, and a price that rises each year once you depend on it. The calculator puts both on the same footing. When the totals land within about fifteen percent of each other, cost is not the deciding factor, and the better question is whether the capability sets you apart. Build what makes your product different; buy what every company needs and nobody chooses you for.
Compare the full cost of building a tool in-house with buying one, over several years. Building includes the engineers who keep it running afterwards, which is the part most estimates leave out.
Salary plus benefits and overhead.
How far past the estimate projects like this usually run.
Full-time equivalents, every year after launch.
One-off setup, migration, and SSO.
Full-time equivalents for upgrades and admin.
Building never catches up in this period: the build cost and the maintenance team outweigh the licence.
| Total by end of | Build | Buy | Cheaper |
|---|---|---|---|
| Year 1 | $609,000 | $165,000 | Buy |
| Year 2 | $813,000 | $306,300 | Buy |
| Year 3 | $1,017,000 | $454,341 | Buy |
Costs only. Not included: what else the build team could have shipped, vendor lock-in, and the risk that an in-house tool loses its maintainers. No discounting is applied to future years.