Software rental vs. customized solution: which is a better investment?

###Software rental vs. customized solution: which is a better investment? Are you considering if an app could solve your problem? But how do you decide when to buy something that already exists, i.e. a "finished product" or SaaS (Software as a Service), and when it would be better to invest in creating something customized just for you?

Choosing a suitable solution usually depends mainly on whether the problem will be solved in whole or part. It also depends on long-term cost and sustainability, replaceability, ease of use, technical support, and many other aspects. How and where should the decision even start? What is worth doing in which case?

###It is similar to real estate! When you're choosing between renting and buying a property, you're also considering what you can afford, your long-term plans, the number of options, financing options, the market, and more.

For example, imagine a situation where you are buying a property on a mortgage. The amount of the monthly loan payment is about 2 thousand. The monthly rent is CZK 2,000 less than the monthly rent. Thus, it pays off at first glance, as you are in your own in, say, 30 years, the value of the property may rise and you may be a few million richer over time. However, several events can intervene which can lead to devaluation of the property or the need to move.

Both choices therefore carry their risks - the tenant usually pays more in the long run and is not their boss, but the owner carries certain liabilities and has considerably less flexibility to make changes.

###What does it have to do with IT? A lot. The above comparison with real estate applies here as well, as you also make decisions based on your needs, options and circumstances. The main difference is the development of the market and the associated rate of change. This brings more complex criteria when choosing the right application. Examples:

Industry development - the amount of innovation and its impact varies from industry to industry. Typically, within critical infrastructure (e.g. public sector or energy), decision-making through risk tends to be more conservative. On the other hand, companies in less critical industries (e.g. e-commerce or advertising) have less impact on society and therefore may try new things more. Interchangeability - everyone's needs and application requirements can change from day to day. For companies, for example, it can cause them to change size by up to 1000 % in a short period. In both cases, you need to consider the flexibility, adaptability, and modularity of the solution. If the application does not have these characteristics it is at least worth considering how easy it will be to switch to another solution. Budget- the price range is much wider in IT compared to real estate. You can rent software for 200 CZK / month, but also 1 million CZK / month. Similar is the case in the higher ranges with application development. Assuming you're not considering an interim solution to a problem, the same rule applies to real estate - think about it in the long term. There are many possible ways of choosing a solution and combinations of these approaches. However, we will now focus on the advantages and disadvantages of the three examples. ###Better not reinvent the wheel and rent? For these reasons, the concept of "as a Service" (product rental) was created. In our context, it is SaaS (Software as a Service), which usually aims to solve " turn-key" type problems. However, similar to renting a property, you don't own the SaaS. You only have permission to use it, and pay a frequent fee for it. ###The main benefits of SaaS: Lower upfront costs - you only pay a monthly or annual fee, so you don't have to invest in software development or hardware purchases. Quick deployment - turn on the app and you're ready to use it right away. You don't have to wait weeks, months or even years for a solution to arrive. Continuous upgrades - you don't have to worry about new versions and security patches. They are automatically handled for you by the providers, so you always have an up-to-date tool. Scalability - SaaS solutions typically expand and adapt over time according to the needs shared by the majority of active users. Customizability - However, different user groups and their multitude usually have different needs. That's why SaaS packages, spreadsheet specifications, and configurators have started to emerge that allow the application to be customized in terms of functionality and price to a wider audience.

So what's the rent to go by?

• When there is a highly standardized and user-tested solution that sufficiently solves your general problem.
• The long-term costs of existing applications are lower than creating a custom solution.
• When it is better to pay only for "what you consume than to pay high upfront costs.
• When your needs change frequently and fundamentally make it easy to switch to an alternative solution.
• Your problems are not very specific and therefore you don't need a lot of customization.

Examples:

• Internet browsers
• Cloud services (remote storage)
• Antivirus programs
• Email services