Build vs. Buy: Why 35% of Businesses Are Replacing SaaS with Custom Software

Something odd happened in early February. Software stocks shed more than a trillion dollars in market capitalisation in a single week. Analysts called it the “SaaSpocalypse.” And in boardrooms across the country, people quietly asked: wait, are we overpaying for software we barely use?

The short answer, for a surprising number of businesses, is yes.

The Numbers That Started a Conversation

Retool’s 2026 Build vs. Buy Report, published on 17 February, surveyed thousands of engineering and product teams. The headline findings are hard to ignore:

• 35% of enterprises have already replaced at least one SaaS tool with custom-built software
• 78% plan to build more custom tools in 2026
• CRMs, BI dashboards, project management platforms, and customer support tools are the categories most at risk of replacement

Meanwhile, SaaS utilisation continues to hover below 50%. You’re likely paying for features — and seats — you never use.

What Changed?

Three things flipped the equation:

AI-assisted development collapsed the timeline. What once required large teams and long timescales can now happen with a fraction of the resources. Retool found over 60% of teams now prototype outside the traditional dev queue.

SaaS costs kept climbing while value plateaued. A top-tier ERP at £150 per user per month across 500 users adds up to £900,000 a year — £4.5 million over five years. When you’re only using 20% of the features, that’s an expensive 20%.

Integration fatigue is real. Stitching together five “best-of-breed” tools often costs more in middleware and workarounds than building a single unified platform.

A Decision Framework for UK SMEs

Run every candidate workflow through five questions:

1. How unique is this process? If your workflow matches what the SaaS tool assumes, buy. If you’ve bent the tool into shapes it wasn’t designed for, consider building.
2. What’s the real total cost? Add up subscription fees, integration costs, workaround time, and training. Then compare against a custom build quote plus 20% annual maintenance.
3. Where does your data live? If data sovereignty or the Data (Use and Access) Act 2025 requirements matter, some SaaS options simply won’t work.
4. What happens if the vendor changes direction? SaaS products get acquired, repriced, and sunset. Custom tools don’t disappear because a startup pivoted.
5. Can you start small? The most successful custom builds start with a single workflow, prove the value, then expand.

Tiraverse Take: We don’t pitch “build everything.” We pitch “build the tools that move the revenue needle.” Start with the spreadsheet killer — that one complex Excel file that runs your operations but breaks every Tuesday.

The Real-World ROI

A financial services firm replaced a manual loan processing system. Volume capacity increased tenfold. Costs dropped 70%. Annual savings: £168,000. A hotel group built its own booking system, increasing direct bookings from 30% to over 50% and saving £100,000 per year in commissions.

These are documented outcomes from businesses with teams of ten to two hundred people.

FAQ

How much does custom software actually cost for a small business?

A single workflow automation or internal tool typically runs £10,000 to £30,000. A customer-facing web application might be £30,000 to £100,000. Start with your most painful manual process and work from there.

Isn’t building software risky?

It can be. But the risk drops dramatically with clear requirements — projects with documented specifications are 50% more likely to succeed. Agile approaches show 42% success rates versus 13% for traditional waterfall methods. The biggest risk factor isn’t technology; it’s unclear requirements.

Ready to find out whether your business would benefit from a custom build? We offer a free 30-minute build-vs-buy assessment — no sales pitch, just an honest decision. Get in touch.

Next read: Shadow AI Is Already in Your Business · Chat with Your Legacy Data

Source: Retool Build vs. Buy Report 2026