Off-the-Shelf vs Custom Software: Real 5-Year TCO Numbers
The article compares the total cost of ownership (TCO) for off-the-shelf versus custom software over five years. It highlights that while off-the-shelf solutions may appear cheaper initially, their long-term costs can exceed those of custom solutions due to various hidden expenses. Companies must consider their specific needs and existing technology when determining the most cost-effective option.
- ▪Off-the-shelf software typically costs $1.2 million over five years for a mid-size company with 500 users.
- ▪Custom solutions average $1.8 million for comparable functionality, but this varies based on specific use cases.
- ▪Integration and customization can account for 25-30% of the total spending on software.
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