Breaking Out of SaaS Prison with Custom Software

Software as a service has been the default pricing model for business technology for more than a decade. The model is so successful that even hardware is often done as a service, or rather, will not work without a SaaS product that sits on top of it.

With low upfront cost, fast deployment, and ease of use, cloud-based SaaS products have been embraced by companies almost universally. In the past few years, however, there have been some small signs of change, and many organizations are reconsidering their relationship with off-the-shelf SaaS tools.

The cloud, in general, has made some promises that are too good to be true in the long run. The cloud shift started at the beginning of the venture capital era. Companies were much more willing to build and scale the product immediately, lose money while gaining customers, and figure out how to be profitable later. Now is finally later. The ‘other shoe’ dropping took 10-15 years in this case, depending on when you place the start of this trend.

A decade is what it took for the majority of customers, be it organizations or individuals in them, to have been burned multiple times by these types of products. Discontinuation of services. Regression of features or changes to core feature templates. Security incidents. Pricing model changes that range from more expensive to stagecoach-robbery-style profiteering.

There is not so much a binary choice between SaaS vs. custom solutions as it is a series of choices about ownership and control over core business systems. This article will cover the trend of businesses seeking to free themselves from SaaS products for some of their most important systems, and the considerations involved in which services should be decoupled and how to go about building custom line-of-business (LOB) software.

Why Businesses Are Starting to Seek Freedom From SAAS?

SaaS applications offer the promise of simplicity in exchange for a simple monthly fee, but often limit growth and inflate long-term operating costs by charging relatively more as a business scales. This is how companies end up paying hundreds of thousands to millions of dollars a year on something that serves a very simple need, like Slack, when simply making their own would pay for itself in just a few years.

It started reasonably priced, as the need for seats grew, suddenly the price per seat went up over time and by tier of the scale. Sometimes the price increases feel so extraordinary that when it happens to a non-profit organization, it’s played off as a mistake. Often, it’s the need to make all seats the same plan instead of purchasing plans per seat à la carte that is the budget-killer. It’s rare for a provider to let you purchase just as many Enterprise plan seats as you need for that one crucial feature for a particular department and a lower plan for the rest.

This Is My Software. There Are Many Like It, but This One Is Mine.

SaaS platforms offer a one-size-fits-most approach that would be the clothing equivalent of wearing a five-gallon bucket as a hat. They are made for the common denominator and are often too standardized for many organizations with specialized needs, while offering an excess of features that they do not need yet pay for. The rollout of AI features by every organization that has an app has highlighted the problem with that.

For example, Office 365 is bundling AI features that the majority of people do not currently need (or may buy different products for their AI needs). Customers from small operations to large corporations are not happy with being forced to deal with the potential security risk of these integrated AI features, and they’re seeing massive cost increases for the privilege of being forced to buy into these new features. Office 365 is charging 40% more for what many businesses consider sand in this desert of AI, and there are many services going down the same path. One such service is Office 365, which announced another price increase between the author writing the previous sentence and this one.

Meanwhile, if a company needs customizations to the platform, they’re either out of luck, or if they’re a large enough customer and the platform does offer some form of customization of the service, it’s prohibitively expensive. If they require even a small change, they may be required to pay for that change in perpetuity on top of their already existing extremely expensive enterprise plan.

Artificial Walls and Data Silos

The typical modern enterprise relies on a Rube Goldberg machine of software products - CRMs, ERPs, billing, analytics, operational tools, inventory management, human resources, and more. All of this needs to work together in order for the business to function, however SaaS vendors intentionally limit their interoperability to the bare minimum required for day-to-day functionality.

These vendors will limit their APIs and other connectors (like simple data egress) in order to force their customers to become victims of data siloing and more dependent on their product as a result. If they offer egress via an API, it’s most likely locked behind a costly enterprise-level package.

This leads to difficult reporting and analytics, operational inefficiencies with silly workarounds, and paying even more for third-party integration tools that often break without notice when a product changes something about its interface or functionality that the third-party integration tool must scramble to update on Day 0, which can lead to expensive downtime depending on the criticality of the system.

As a result, many businesses are considering custom LOB software to remove these constraints and make their experience more stable.

Security Obligations

“We know you have obligations to your customers, sometimes with the force of law, to be a responsible steward of their and their customers’ sensitive information. That’s why we’ve introduced our AI product, which will read and train itself on all of your data and interactions with our software starting now and retroactively to the beginning of time as well. Also, your bill is due. It went up. We have to pay for the AI and the class-action settlement from that data breach from a few years ago.” -Your service provider, probably

Enterprises with a higher standard of security and privacy obligations, like those in healthcare, finance, insurance, legal, or government face struggles finding SaaS solutions that can meet their particular needs in an auditable way. The vendor of the service has their own operational policies and risk profiles that differ from yours, and though they may offer SOC 2 or HIPAA compliance, your control and auditability are limited, as well as the legal liability these platforms will accept for a problem they may cause. For many enterprises, the potential of a vendor causing a problem entirely out of their control while they share in none of the risk is not acceptable.

If they go for a custom software solution of their own, they can choose to do things like self-host on their own private infrastructure, tailor access controls to their security policies, add auditable encryption to align with internal policies, and in general have complete ownership of the code, data, and environment around it. It’s not uncommon for custom software design specifications to start with security, compliance, and regulatory frameworks before features are even discussed.

Vendor Lock-In

Locking you into their solution is in the interest of every SaaS provider. Your business processes likely have, for better or worse, become tailored to the limitations of the SaaS products you use. The cost of switching has slowly crept up in the background from both price increases of the product and the disruption to your business as it grows and becomes more reliant on the product. Vendors can change features, pricing, or just pack up and leave altogether with no recourse. Transitioning to a new SaaS product can be operationally dangerous, especially without sufficient notice. The same applies to migrating to custom solutions, but you do have more control over the process of migration, the features built for the migration itself, and when your migration is done you have a permanent asset that can change with your needs.

Long-Term Cost Stability

SaaS starts affordable, but with every new seat, every tier upgrade which somehow needs all seats to be on the same tier, integrations custom or otherwise, and potential API costs, it balloons very quickly. A lot of enterprises make the mistake of thinking that rolling their own private cloud is the same as truly decoupling from these risks. Broadcom’s acquisition has recently highlighted how wrong this is by extreme price gouging and hostile behavior to long-term customers while it intentionally circles the drain, intending to squeeze every dollar out of the property they can while it slowly sinks.

On-prem or cloud is simply where your infrastructure is, custom LOB software on either means a more stable long-term prospects for cost. In addition, even with using cloud services to host your custom software, you’re likely using generic cloud products that allow you to be a lot more mobile should you need to pack up and go to a more reasonable competitor.

For those enterprises ready to replace their generic SaaS tools with something both tailored to their needs and in their control, CodeClouds Enterprise provides more than just custom software development services. We can deliver the strategy, infrastructure, architecture, and have the partnerships required to transform your SaaS-dependent business into a homegrown technology-driven operation with complete control over its own digital assets.

How to Move Forward With a Replacement with CodeClouds

Breaking free from a SaaS product isn’t just about ending your subscription and creating or obtaining a non-service replacement. It’s an architectural decision that has long-term consequences for your operations. A custom piece of software must not only replace the critical features of the SaaS product that you once used, but must also solve the problems that were in your control to solve while using said SaaS product. Be it more standardized workflows, a better API to fit into other pieces of software, missing features, or security requirements, you can’t treat a custom SaaS replacement as “build an app that does the same as this SaaS product.” It’s a full lifecycle transformation.

We Start With Discovery

Before we write a single line of code, CodeClouds offers a 4-6 week structured engagement with a dedicated discovery team. This team includes a Business Analyst, Solution Architect, a UI/UX designer, and a Project Manager, who will all collaborate with your stakeholders and experts to plan a path from your vision to a viable solution that we can deliver. Our phases of engagement are as follows:

• Week 1-2: Discovery and Stakeholder Workshops
  • Facilitate workshops to gather objectives, define success criteria, and document high-level requirements
  • Identify risks, constraints, and dependencies
• Week 3-4: Requirements Definition
  • Capture and document detailed functional and non-functional requirements
  • Develop user stories, workflows, use cases, and acceptance criteria
• Week 5-6: Technical Assessment & Architecture
  • Validate technical feasibility and assess compatibility within the organization's enterprise architecture
  • Develop a comprehensive architecture tailored to the project's needs
• Week 7-8: Findings and Final Deliverables
  • Deliver Findings, Agile Project Plan, Architecture, and Estimates
  • Present deliverables, review risks and recommendations, and prioritize initial backlog

The result of this discovery process is a complete blueprint for the process to create your SaaS replacement, with clarity on anticipated scope, complexity, and budget. This blueprint includes:

• Detailed Business and Technical Requirements
• Validated High-Level Solution Architecture
• UI/UX Wireframes and Mockups (if applicable)
• A Prioritized, Actionable Backlog for the initial sprints
• A Clear Project Plan with Scope Definition and Success Criteria
• Development effort and timeline estimates

All designed to make sure you're ready for development kickoff while preventing the need for costly development rework later.

CodeClouds' Value Optimized Agile (VOA) Software Development Approach

Once the discovery phase has concluded and both parties choose to move forward, we transition to our Value Optimized Agile development methodology (VOA). Unlike a traditional agile team that focuses on story points or velocity, our process focuses on business value first and our interaction plans adjust continuously around these needs.

Our Engagement Model

We offer predictable monthly fee structures that are tailored to your project's scope and complexity based on the discovery phase. We target budget certainty and dedicated access to our team.

True Ownership

If you paid us to develop it, you own it. It's right in our service agreement, actually. We don't make our money by making your dream solution at a cut cost and locking you in with us as the vendor. For each piece of the tech stack, we help you evaluate ownership costs and risks, and though we partner with many great providers, we don't have a financial interest in choosing to guide customers toward their service over helping them create their own solution. Instead, we help you evaluate what pieces are most important to your operational independence and what pieces are more interchangeable.

If you are ready to reclaim control of a key part of your Line of Business software, CodeClouds is ready to help you build the platform that puts you back in command of your operations. Reach out to our team for a pre-discovery consultation if you would like to know more.