FAQ

When Should a Business Replace SaaS With Custom-Built Software?

SaaS Displacement

Key Takeaways
  • Most operators look at individual SaaS costs and think "that's reasonable." The problem becomes visible only when you add up every platform, every contractor managing those platforms, and every hour spent fixing broken integrations between them.
  • Signal 1: You are paying people to hold platforms together.

A business should replace SaaS with custom-built software when monthly subscription costs across multiple platforms exceed $1,500/month, integration failures between those platforms consume meaningful staff time, and vendor lock-in is limiting how the business operates. The tipping point is not any single subscription -- it is the total cost of maintaining a fragmented stack.

The real trigger is not the subscription bill

Most operators look at individual SaaS costs and think "that's reasonable." The problem becomes visible only when you add up every platform, every contractor managing those platforms, and every hour spent fixing broken integrations between them.

In one documented case, a multi-vertical operation was paying $1,565/month across six SaaS platforms -- CRM, affiliate tracking, social management, email, marketing automation, and phone system. On paper, none of those subscriptions looked extreme. But the contractor costs required to manage and integrate those platforms peaked at $9,046/month. The total monthly burden averaged $6,312/month -- more than four times the subscription line items alone (CS10, audited October 2025).

According to Vertice's 2024 SaaS spend report, the average mid-market company uses 130+ SaaS tools, with 30-40% of licenses going partially or fully unused. The waste is structural, not accidental.

Three signals that displacement makes financial sense

Signal 1: You are paying people to hold platforms together. If contractor or staff time dedicated to integrations, data reconciliation, or vendor management exceeds the subscription costs themselves, the architecture is the problem.

Signal 2: Your data lives in too many places. When customer data is split across six dashboards and reports never quite match across platforms, you are paying a hidden tax on every business decision that depends on accurate numbers.

Signal 3: A vendor change would break everything. If switching one platform means re-wiring connections to five others, you have vendor lock-in multiplied across your entire stack.

In the documented displacement, all six platforms were replaced by a single internally built system. Monthly operating costs dropped from $6,312/month to approximately $825/month -- a reduction of roughly 87%. Total first-year cost displacement: $82,640 (CS10, QB-verified, February 2026).

Related: How long does it take to build a SaaS replacement? | What does it cost per month to run custom-built software after launch?

References

  1. Vertice (2024). "SaaS Trends Report." Mid-market SaaS sprawl and license utilization benchmarks.
  2. Keating, M.G. (2026). "Case Study: The Platform Displacement." Stealth Labz. Read case study