Commercial VS. Custom Software Development Services: Which Way Should You Go
Software selection is one of the most important decisions that a business can make for their future growth. Do you have software developed specifically for your business needs, or do you buy commercial software? Understanding the benefits and differences between custom software and commercial-off-the-shelf solutions (COTS) to meet your business's unique needs is critical.
Commercial software is supposed to be a one-size-fits-all software solution that is purchased online or in a store. Custom applications are created by a development company that specializes in custom-made software solutions. Custom applications are tailored to the exact needs of the customer, and are usually more expensive than commercial software. However, custom applications are usually more efficient, reliable, and secure.
This article will help you understand the difference between commercial and custom software, including the advantages and disadvantages, and determine the most efficient software development for your company.
What is Custom Software?
As the name suggests, custom-developed software is written for a specific purpose and to a well-defined set of specifications. Custom Software is adaptable to the current market requirements and future needs of a business. When a custom software solution is developed, it is created to address the exact needs of your business.
Custom software is built for long-term use, so your developer will analyze and incorporate your future needs into the program's design. Customized solutions are created from the ground up based on individual needs, adapted to existing business processes, and with future changes in mind.
Advantages of Custom Software Applications
Some of the reasons you should lean toward custom software applications are:
1. Competitive Advantage
Running your company on software every other company uses makes gaining an advantage in a fierce and competitive environment hard. On the other hand, custom software enables you to go that extra mile that often makes the difference. It allows you to improve on existing off-the-shelf solutions, customize solutions to your customer needs and gain a competitive edge in your marketplace.
2. Perfect Fit
The customizability of tailor-made software is what appeals to most businesses. The idea that a business can mold custom software into precisely what works for them is a dream for many organizations. This allows businesses to benefit from the ability to tailor it to their exact needs and specifications. Custom software provides the necessary scalability and flexibility to grow with the business and its changing needs. Additionally, custom software can be integrated with existing systems and hardware so that businesses can benefit from the most up-to-date technology. This ensures maximum efficiency and productivity.
This tailor-made solution will also have special features, subtle conveniences, and specific abilities for your technical teams and needs.
3. Scale at Your Own Pace
Custom software allows a company to scale at its convenience. You can start small with a minimum viable product (MVP), then employ modular scaling to develop the software to meet your needs gradually.
At the same time, scaling custom software will not cost you additional license fees or require contract adjustment since your company owns the custom software you operate.
4. Security
As an organization that values security and data privacy, custom software puts you in the driver's seat regarding safety.
GDPR laws now mandate privacy by design, which can efficiently be implemented with custom-built systems and subsystems.
Bespoke software allows you to invest in security, innovate and develop customized solutions that meet your individual security risks and needs.
Custom software also reduces third-party system access and the chances of malicious users infiltrating your systems.
5. Return on Investment (ROI)
The profits from custom software's efficiency, productivity, and reliability will slowly chip into the initial costs and recoup your investment over time.
While at it, your organization won't pay punitive license fees or have business-critical features hidden behind a paywall.
6. Support
The support for your custom software is in-house, giving you the freedom to support your software for as long as you wish.
You also get to prioritize the software and features essential to your operation and let others die at your convenience.
And even when you migrate to another version, you can do it on your terms and within convenient deadlines.
7. Future Prospects
If you build remarkable custom software, you have many options for what to do with it. You can go forward and keep the software and benefit from the competitive advantage it brings.
You can also choose to sell licenses to this software to other businesses. Alternatively, you could spin off your custom software into a separate product, sell it, and invest the returns in growth.
Disadvantages of Custom Software
Custom software may only be appropriate for some of your projects for all its advantages. In some instances, building custom software carries no competitive edge and can be expensive and time-consuming.
Some of the cons you should consider before building custom software include the following:
1. Substantial Initial Costs
Bringing new software to market from design to deployment is costly. You will have to pay for the design, development, testing, and deployment, which is an expensive undertaking.
The total cost of ownership (TCO) in the long term is also high, given that you will have to pay for updates and upgrades to your software. Subsequently, there is no guarantee of return on investment.
2. Time to Market (TTM)
Prominent manufacturers of COTS software have the resources, technical know-how, and capabilities to develop, test, and deploy novel software in a relatively short time.
Building software from scratch for a company is a different ballgame. It can be done, but how long it takes to bring the software to market will depend on several factors.
3. Maintenance Responsibility
Custom software, like commercial software, requires routine maintenance. If you choose the customized route, be prepared to handle your software's monitoring, updating, and servicing.
If you don't outsource, your technical teams will also be responsible for fixing bugs and writing and refactoring the code of your custom software.
What is Commercial Software?
A commercial product is made for a wide range of audiences and can often fulfill the requirements of many organizations but is unsuitable to meet every business's specific needs and expectations.
Since the product is ready to use, it may not cater to the exact requirement of all organizations. Since commercial software is intended for a mass audience, there are usually adjustments that an existing organization will need to make to implement a commercial product.
Commercial off-the-shelf Software (COTS) or generic software refers to commercially ready-made software for the general public.
Examples of commercial software include:
Advantages of Commercial-off-the-shelf Software (COTS)
Some of the pros that make commercial off-the-shelf (COTS) software the most widely used type of software in organizations today include:
1. Lower Initial Costs
Companies that develop commercial software spread the cost of development across many users. Spreading the cost makes going for off-the-shelf software the cheapest way to acquire new software.
Similarly, opting for commercial software spares you from the costs of requirements elicitation, software planning, development, and testing, which is resource intensive.
And when it's time to pay for developing updates and upgrades, that's the vendor's problem, and they have to pay for it.
2. Broad Technical Pool
Given their widespread use, off-the-shelf solutions build vast talent pools for hiring. These options allow you to choose expertise that compliments your technical operations.
Commercial software doesn't leave you vulnerable when technicians leave the company.
In software development teams, you may have to train every newcomer you onboard into your technical teams.
3. Wealth of Resources
Most off-the-shelf software provides many resources, including manuals, Q&A web pages, tech support, a user base or community, and documentation.
Also, there is a lot of available knowledge online for your technical teams on forums such as Stack Overflow and Reddit.
4. Reviews and Free Trials
COTS software has been on the market for a while and often has reliable reviews that you can use to evaluate suitability.
You can also go the extra mile and enroll for a free trial to test the software and experience whether it meets your needs.
5. Easy To Deploy
Once you settle on commercial software, you won't have difficulty deploying the systems. Most of them are built with efficient deployment in mind and will take little time to be up and running.
Disadvantages of Custom-off-the-shelf Software
From a distance, using off-the-shelf software seems attractive; they are cheap, readily available, easy-to-use, and hassle-free. However, just because you can use off-the-shelf software doesn't mean you should.
A closer look reveals disadvantages that will make anybody think twice before ruling out custom software development. These include:
1. Software Regression
Thirty-one percent of organizational technology is made up of outdated systems. Though it's easier to blame these companies, very few ask why.
Often, it's not that companies don't want to migrate; they just want to do so on their terms, with minimal impact on operations.
In other cases, so-called "updates" to the software are not progressive for all companies. Features a company depends on can stop working after an update or be removed post-migration altogether. This forces companies to hold on to outdated systems.
2. Hidden Costs
Most of the cost savings you make from not building software will be spent paying extensive teams of outsiders to customize or hybridize the off-shelf software for you.
Also, most commercial software developers will add new features behind a paywall, and you'll often have to pay hundreds of dollars per user per month as you scale.
Though paying for one software may seem cheap, paying for 110 apps (the average number of SaaS for a business) adds up fast.
3. Integration Issues
There is no guarantee that commercial software for the mass market will integrate with all your mission-critical subsystems.
Non-integration is common, which may place the burden of performing easily automated tasks on your technical teams.
4. Control
The users of commercial software don't own the software or the code base. This lack of ownership severely limits the control of the software.
One cannot change the software to make it more convenient for them, introduce new features, or create much-needed integrations.
5. Support
The community support that commercial software offer needs to be improved. In some tiers, these companies' "support" doesn't go beyond chatbot and email support.
To get 24/7 customer service, where you call the vendor, you must dig deeper into your pockets and pay more fees.
Intuit Quickbooks, for example, is famous for offering little support for its silent deployments, creating many headaches for software engineers.
6. Complexity and Clutter
Commercial software is developed for different users, which means it will contain several features and complexities irrelevant to your organization.
Besides making the software more complex and increasing learning curves, these complexities can strain your system, making it slow.
7. Long-Term Risks
Most providers of off-the-shelf companies may stop supporting older versions of the software. This may be a cost-cutting measure. Other times, it may be used to force companies to migrate to newer versions.
Subsequently, no off-the-shelf software is too big to fail; Borland, the tech giant supporting Turbo Pascal, went under.
When these companies go out of business and end support altogether, they expose dependent companies to uncertainties.
Factors To Consider Before Settling for Commercial or Custom Software
There are a few factors to evaluate when deciding whether to invest in commercial software versus choosing a custom software development solution. Every business has different requirements
Neither custom nor commercial software is superior to the other. Most of the time, you'll find yourself using a cocktail of both. It all comes down to your unique circumstances as a company.
Here are some factors you should consider before choosing commercial or custom software:
Suitability
Any software you are about to add to a tech stack should address your business needs. Since commercial software is developed for a broad audience, it will likely meet your needs. But this is not guaranteed.
You can also have custom-made software designed entirely with your needs in mind. This makes it an excellent alternative for meeting your present and future needs.
Not all business needs can be satisfied with the generic software in existence. Custom software is the way to go if you run a startup or medium business with unique needs.
Customer Support
The level of support the software offers is a must-have for mission-critical software. You should investigate the quality of support provided by off-the-shelf vendors and how much you will have to pay to get it.
You can also check any statements on deprecation or end-of-life so that you don't build your systems on software that will soon be abandoned.
Deployment Risk
Deployment risk refers to the impact and risk of launching new software on your existing operations. Ascertaining deployment risks requires a thorough review of your systems and integrations to determine the potential effects of deployment or what went wrong with your business.
Off-the-shelf software has a lower deployment risk because it has been deployed many times by other users. However, there is no guarantee that new updates won't bring deployment headaches.
Since you will be deploying custom software for the first time in your organization, it comes with significant deployment risks.
Flexibility
How flexible is the software you are acquiring to the ever-changing needs of your business? Can it adapt to your changing needs, meet new requirements, or be customized or hybridized to meet your needs better?
The flexibility of commercial software is limited to the views of the vendor. If your unique needs are optional, broad, or profitable enough to the vendor, they won't create updates to meet them.
For custom software, your flexibility is unmatched because you own the software.
ROI and technical development
Though custom software development may be cost-intensive, it's worth it. Many large, deep-pocketed companies like Amazon use custom-developed software for almost everything.
You may not be as big as Amazon (yet), but you can migrate some parts of your technical stack to custom software and reap the benefits.
Custom software development makes sense for building mission-critical integrations that may not exist in the generic software market. The cost of using software that doesn't integrate is high and may crash your systems at their worst.
What Does Custom Software Entail, and How Can You Get Started?
There is more to custom software development than creating new software from scratch. You can use it to improve your existing software or build integrations to other platforms such as SalesForce.
This can be handled by your internal teams or be outsourced partially or entirely to external teams that develop the software on your behalf.
Finding the best custom software development company is essential because:
Custom developers become partners. Custom software developers can access your source code, systems, and subsystems, making them your business partners.
Software is only as good as the developer. The firms that build your custom software must share your quality and standards to build software that fits your systems.
They bring on other core competencies. Custom software companies may bring the rare expertise, experience, and knowledge required to build custom software in short amounts of time.
The first step before building custom software is calculating the total cost of ownership (TCO). This will help you find out if building the software is financially feasible and cheaper in the long run.
Some of the costs you will have to include in your projections include the following:
Software development
Software maintenance
Cost of IT infrastructure and service
Support
Here are some best practices that you should employ before you can settle on as you develop custom software for your organization.
Define the future and current needs of your company.
You need to develop custom software with your current and future needs in mind. Hence, studying trends in your business is necessary to build software adaptable to business change.
One advantage of custom software is the ability to build future-proof systems customized to the trends in your industry.
Keep an eye on your budget.
With proper planning and execution, costs can easily stay within budget. It's essential to keep tabs and plan for the spending before, during, and after development. Tracking progress and costs against the budget is key. Set up regular reports to review progress and to ensure you are meeting the established financial goals. Have a system in place to identify any issues that may arise and address them proactively.
Settle on a well-experienced technical team to build your custom solution.
It would be advisable to settle for a team with domain expertise and an experienced workforce to build your custom software. They should have a couple of past projects that you can look at to determine their capabilities. Make sure that the team also understands your business needs, and has the capacity to deliver a solution that meets your expectations. Additionally, look for a team that is willing to collaborate with you and that offers good customer service.
Conduct iterative testing for all developments and final testing.
You should conduct various tests, including user testing, technical testing, smoke testing, and regression testing. This is to ensure that your software meets all of your requirements. It is essential to identify any bugs and issues before releasing the software into production. Testing should also be done regularly after the release so any new issues can be addressed quickly. Finally, testing should be performed in a simulation of the real-world environment.
Create relevant documentation.
The people who create custom applications will be there for a while, but not forever. That's why it's essential to document each step so that future software developers can work on and fix your software.
We Can Help
At Mach One Digital, we understand how difficult gaining an edge in a competitive environment can be. However, custom software that meets and exceeds your needs will help you in gaining a competitive advantage. That's why we've dedicated our careers to offer the services needed to help firms like yours build software solutions that unlock meaningful growth.
For more information, contact us today, and our teams will be more than willing to help.
