SaaS Build vs Buy Calculator
Compare three years of vendor invoices against three years of owning the code, including the maintenance nobody budgets for.
What this calculates
This compares the total cost of buying a component for three years against building and then maintaining it for the same period. Build cost is engineers multiplied by time, plus an annual maintenance charge that starts when the first version ships. It prices the engineering, not the strategy, and the strategy is usually the part that decides this.
At typical inputs for a B2B SaaS company, a vendor at $84,000 a year against 2.5 engineers for seven months at a $180,000 loaded cost and 20% annual maintenance, this calculator finds buy is cheaper by $137,375 over three years.
Your numbers
Buy
Build
Results update as you type. Nothing is sent anywhere, the calculation runs in your browser.
Three-year total cost of ownership
LiveBuy is cheaper by $137,375
Over three years, $389,375 to build against $252,000 to buy
- Build breaks even in
- 88 months
- Engineer-months diverted
- 17.5
- Vendor price that flips it
- $129,792 a year
Buy
Buying wins by a wide margin, and the engineer-months are the larger cost hiding behind that number. The only argument for building anyway is that this component is something you sell rather than something you use. If you cannot say that out loud, buy it.
Pressure-test this against your real numbers
Thirty minutes on whether this component is actually yours to own.
No email required to see your result. The field above exists only if you want a copy.
How is this calculated?
Build cost is the number of engineers times their loaded monthly cost times the months to first release. Maintenance is charged as a percentage of that initial cost every year from release onward, prorated across the remainder of the three year window. Buying is simply the annual vendor price times three. The two totals are then compared.
Formula
Initial build = engineers × (loaded cost ÷ 12) × months to release Maintenance = initial build × maintenance rate, charged from release to month 36 Build TCO = initial build + maintenance Buy TCO = vendor cost per year × 3 Breakeven is the month at which cumulative build cost falls below cumulative vendor cost.
- The window is thirty-six months from today. Maintenance starts the month the first version ships, not the month the project starts.
- The months-to-release field is meant to carry a 1.5 multiplier on the estimate the team gave you. Software estimates for internal tooling miss in one direction.
- Loaded cost is salary plus employer tax, benefits, equipment and tooling. Using base salary alone understates the build side by roughly a third.
- Vendor price is held flat for three years. If your contract has an uplift clause, raise the figure to the average across the term.
- Nothing here counts the roadmap work those engineers would otherwise have done. The engineer-months figure is there so you can price that yourself.
When this number misleads
The maintenance rate is the assumption that decides this, and it is the one teams set from optimism rather than from history. Twenty percent means one engineer-month a year for every five that went into building it, which is about right for something stable and far too low for anything that touches payments, permissions or a third-party API. Move that one field and watch the answer change. If it flips, the honest conclusion is that you do not know yet.
Questions founders ask about this
Why is the verdict a word rather than a health rating?
Because this tool answers a decision rather than measuring a condition. There is no healthy or unhealthy version of a build-versus-buy comparison. There is a cheaper side and a margin, and when the margin is under a fifth the honest answer is that cost does not decide it.
Should strategic value change the answer?
Yes, and it is the only thing that should override a wide cost margin. The test is whether a customer would ever choose you because of this component. If they would, own it. If it is plumbing that everyone has and nobody buys you for, the cost comparison is the whole argument.
What if we already started building it?
Then the money already spent is gone and does not belong in this comparison. Rerun it with the months remaining rather than the months in total. Sunk cost is the single most common reason teams finish internal tools they should have abandoned.
Do you store what I enter?
No. The calculation runs in your browser and nothing is transmitted. Your last inputs are saved in your own browser so the page remembers them when you return. If you use the email field, only the result summary and your address are sent.
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