Updated April 2026
Build vs Buy: A TCO Framework for Engineering Leaders
Concrete 3-year TCO calculations for real build-vs-buy decisions. Not abstract frameworks, but actual numbers for auth, monitoring, payments, CMS, and feature flags.
The 5 Decision Criteria
Competitive advantage?
Is this functionality core to what makes your product unique? Build if yes.
Maintenance burden?
Can your team maintain this long-term? Every build decision is a staffing commitment.
Team expertise?
Do you have engineers who know this domain deeply? If not, the build will take 2-3x longer.
Time to market?
How fast do you need it? Buying saves 3-6 months upfront.
3-year TCO?
What does each option cost over 3 years including maintenance, hosting, and ops?
Authentication System
| Build: Custom auth (JWT + sessions + OAuth + MFA) | Buy: Auth0 / Clerk | |
|---|---|---|
| Year 1 (build + setup) | $80,000 - $120,000 | $6,000 - $24,000 |
| Year 2-3 (maintenance) | $25,000 - $40,000/yr | $6,000 - $24,000/yr |
| 3-Year Total | $130,000 - $200,000 | $18,000 - $72,000 |
Verdict
Buy for 90% of companies. Auth is commodity infrastructure. The security risk of rolling your own auth exceeds the cost savings. Build only if you have unique identity requirements (multi-tenant B2B with complex org hierarchies) and a dedicated security team.
Monitoring and Observability
| Build: Prometheus + Grafana + Loki (self-hosted) | Buy: Datadog | |
|---|---|---|
| Year 1 (build + setup) | $30,000 - $60,000 | $36,000 - $120,000 |
| Year 2-3 (maintenance) | $20,000 - $40,000/yr | $40,000 - $150,000/yr |
| 3-Year Total | $70,000 - $140,000 | $116,000 - $420,000 |
Verdict
Build at scale (50+ hosts). Datadog costs grow linearly per host, while self-hosted Prometheus scales sub-linearly. The crossover point is typically around 30-50 hosts. Below that, the operational burden of self-hosting outweighs the cost savings.
Payment Processing
| Build: Custom payment integration (direct bank API) | Buy: Stripe | |
|---|---|---|
| Year 1 (build + setup) | $150,000 - $300,000 | 2.9% + $0.30 per transaction |
| Year 2-3 (maintenance) | $50,000 - $100,000/yr | Same (volume discounts available) |
| 3-Year Total | $250,000 - $500,000 | Volume dependent |
Verdict
Buy until you process $10M+/year. The compliance burden (PCI DSS), fraud detection, dispute handling, and global payment method support make custom payment processing prohibitively complex. At very high volume, negotiate Stripe volume discounts or add direct bank integrations for specific flows.
Content Management System
| Build: Custom headless CMS | Buy: Contentful / Sanity / Strapi Cloud | |
|---|---|---|
| Year 1 (build + setup) | $40,000 - $80,000 | $3,600 - $36,000 |
| Year 2-3 (maintenance) | $15,000 - $30,000/yr | $3,600 - $36,000/yr |
| 3-Year Total | $70,000 - $140,000 | $10,800 - $108,000 |
Verdict
Buy for most content needs. Custom CMS only makes sense if you have highly specialized content workflows or need deep integration with proprietary systems. The time-to-value advantage of a managed CMS (weeks vs months) usually outweighs the long-term cost difference.
Feature Flags
| Build: Custom feature flag service | Buy: LaunchDarkly / Unleash | |
|---|---|---|
| Year 1 (build + setup) | $20,000 - $40,000 | $6,000 - $60,000 |
| Year 2-3 (maintenance) | $8,000 - $15,000/yr | $6,000 - $60,000/yr |
| 3-Year Total | $36,000 - $70,000 | $18,000 - $180,000 |
Verdict
Either works. A basic feature flag service is simple to build (it is a key-value store with rules). LaunchDarkly adds value with targeting rules, audit logs, and analytics. Build if you need simple on/off flags. Buy if you need percentage rollouts, user targeting, and compliance audit trails.
When to Build
- ✓ Core to your competitive advantage
- ✓ Unique requirements no vendor addresses
- ✓ At extreme scale where SaaS costs become prohibitive
- ✓ Team has deep domain expertise
- ✓ Vendor lock-in risk is unacceptable
When to Buy
- ✓ Commodity functionality (auth, email, payments)
- ✓ Team lacks domain expertise
- ✓ Time-to-market pressure is high
- ✓ Compliance requirements are complex (PCI, HIPAA)
- ✓ Maintenance commitment would strain team capacity