When should I build?
Build when: The feature is a core competitive advantage, no existing solution meets requirements, or long-term scale makes buying prohibitively expensive.
Calculator
Enter your values
Analysis
Interpretation of the current calculator output
Enter values to see detailed analysis and insights.
How to Use
Step-by-step instructions
- 1Enter estimated internal development cost
- 2Add annual maintenance cost (usually 15-20% of build)
- 3Enter software purchase/setup fee
- 4Add annual subscription/license fees
- 5Set the analysis timeframe (e.g., 3 or 5 years)
Total Cost of Ownership (TCO)
Compares the long-term financial impact of building vs buying. Building has high upfront costs but lower variable costs. Buying has low upfront but higher recurring costs.
Build TCO = Initial Dev Cost + (Annual Maintenance × Years)
Buy TCO = Setup Fee + (Annual Subscription × Years)Variables:
Build TCOTotal cost to build and maintainBuy TCOTotal cost to license and subscribeExample
Software Decision Example
Inputs:
Build:$50k dev + $10k/yr maint
Buy:$5k setup + $12k/yr sub
Timeframe:3 years
Steps:
- 1.Build TCO = $50k + ($10k × 3) = $80,000
- 2.Buy TCO = $5k + ($12k × 3) = $41,000
- 3.Difference = $39,000 savings by buying
Result:
Buying is cheaper over 3 years
Frequently Asked Questions
When should I buy?
Buy when: It's a commodity function (CRM, email, payroll), speed to market is critical, or you lack internal engineering resources.
What are hidden costs?
Build: Technical debt, bug fixes, server costs, developer turnover. Buy: Implementation time, training, integration costs, price hikes.