Your Software Isn't a Competitive Advantage. It's a Stalemate.

Let me tell you a secret about the SaaS industry: they want you and your competitors to use the same software.

Think about it. Every enterprise SaaS company dreams of 100% market penetration. They want every player in your industry running their platform. That's how they maximise revenue.

But here's what that means for you: the software you're paying premium prices for is designed to serve your competitors just as well as it serves you.

It's not a competitive advantage. It's table stakes. It's a stalemate.

Everyone has access to the same capabilities, the same features, the same limitations. Nobody pulls ahead because everyone's running the same race with the same shoes.

And you're paying hundreds of thousands a year for the privilege of being exactly as capable as everyone else.

The Stalemate Economics

Here's how the SaaS stalemate works:

Phase 1: Advantage

A vendor builds software that solves a real problem. Early adopters get an advantage, they can do things competitors can't.

Phase 2: Adoption

The software succeeds. More companies adopt it. The advantage shrinks as competitors gain the same capabilities.

Phase 3: Saturation

Market saturation. Everyone in the industry uses the same platform. The advantage disappears entirely. But now you can't leave, switching costs are too high and your competitors all have the same tools anyway.

Phase 4: Permanent Stalemate

You're paying enterprise prices for capabilities that provide zero differentiation. The vendor captures all the value. You capture none.

This isn't a bug. It's the business model. SaaS vendors don't want you to have competitive advantages from their software, they want everyone to have it, so everyone has to pay.

Your "strategic technology investment" is actually a tax you pay to stay even with competitors. Nothing more.

The Customisation Lie

"But we've customised our implementation! We've configured it for our specific needs!"

Have you, though?

Most SaaS "customisation" is choosing from a menu of options the vendor provides. You're not building something unique, you're selecting from the same choices your competitors can select. You're arranging the same furniture in slightly different configurations.

Real customisation (the kind that creates genuine advantage) is almost never possible with enterprise SaaS. The vendor's architecture constrains what's possible. Their roadmap determines what features exist. Their business model requires that every customer uses fundamentally the same product.

When you ask for true customisation, you get one of three responses:

"That's on our roadmap"

Translation: maybe in 18 months, and your competitors will get it too

"That's not something we support"

Translation: our architecture can't do it

"We can do that as a custom engagement"

Translation: pay us six figures and wait a year

None of these give you advantage. They give you parity, eventually, at best.

What Your Competitors Can't Buy

Here's what creates actual competitive advantage:

→
Software that embodies your unique processes. Not processes adapted to fit vendor constraints, your actual best practices, exactly as they should work.
→
Systems that evolve with your strategy. When you decide to do something new, your technology enables it immediately. You don't wait for vendor roadmaps or submit feature requests.
→
Tools that compound your specific knowledge. Software that learns from your data, your patterns, your market, not aggregated insights across all the vendor's customers.
→
Speed that others can't match. When you see an opportunity, you can build the capability to capture it in weeks. Competitors stuck on vendor timelines can't respond.
→
Experiences your customers can't get elsewhere. Interfaces, workflows, and touches designed specifically for how you serve people. Not templates. Not "best practices." Yours.

None of this is available from SaaS vendors. By definition, it can't be, they need to serve everyone, which means they serve no one uniquely.

The things that create advantage are the things you have to build yourself.

The Legacy SaaS Trap

Here's what's happened in most organisations:

Over the past fifteen years, you've accumulated SaaS subscriptions like barnacles. CRM, ERP, HRIS, LMS, CMS, and a dozen other acronyms. Each one solved a problem at the time. Each one came with promises of efficiency and capability.

Now you're paying millions annually for a stack of disconnected systems, none of which quite fit your needs, all of which require painful integration, and every one of which your competitors also use.

Your "best-of-breed" approach has created a worst-of-all-worlds outcome:

• Data siloed across dozens of systems
• Integration costs that never end
• Vendor lock-in everywhere
• No coherent user experience
• Zero differentiation
• Escalating costs every renewal cycle

This is the legacy SaaS trap. You've outsourced so much capability to so many vendors that you've created a Frankenstein's monster of technology that serves no one well and costs a fortune to maintain.

And every competitor in your industry has built roughly the same monster.

The New Model: Small Teams, World-Class Software

Here's what the organisations that will win the next decade look like:

Small, skilled teams

3-8 people who deeply understand both the business and modern development practices.

AI-augmented development

Small teams produce output that would have required 50 people five years ago.

Ruthless focus

On the specific problems that matter for this business, not generic solutions for generic problems.

Continuous deployment

Not annual releases or quarterly updates, but constant iteration based on real feedback.

Deep integration

Software woven into the fabric of how the organisation operates, not bolted-on tools.

Complete ownership

Of the systems that differentiate, not renting capabilities that anyone can rent.

These teams don't build everything. They're strategic about what to own. Generic infrastructure? Use commodity services. Payroll processing? Buy software. But the systems that touch customers, that embody your unique value, that create competitive advantage? Those they build.

The result: software that fits like a bespoke suit instead of off-the-rack. Software that moves at the speed of the business instead of the speed of vendor roadmaps. Software that compounds advantage instead of maintaining stalemate.

What "World Class" Actually Means

Let me be specific about what small teams can build today:

✓
Better UX than enterprise SaaS.Enterprise software is designed by committee, constrained by legacy, and optimised for feature checklists. A focused team building for specific users can create experiences that are dramatically better, because they only have to solve your problems, not everyone's.
✓
Faster iteration than any vendor.When you own the code, you can ship daily. You can respond to feedback in hours. You can experiment constantly. No vendor with thousands of customers can match this speed for your specific needs.
✓
Deeper integration than any platform.Vendors build integrations for general use cases. Your team can build integrations that do exactly what your workflows require, no compromises, no workarounds.
✓
AI capabilities that are actually useful.Not "AI-powered" marketing bolted onto legacy products, but genuine intelligence built into systems designed for it from the ground up.
✓
Perfect fit for your processes.Not your processes crammed into vendor assumptions, your actual best practices, implemented exactly as they should work.

This isn't theoretical. This is what competent teams are building right now, in every industry, while their competitors remain locked in SaaS stalemate.

The Capability Investment

"But building a team is expensive!"

Is it? Let's compare.

SaaS approach:

• $500K/year in enterprise licenses (conservative)
• $200K/year in integration and maintenance
• $150K/year in consulting to make it all work
• Zero competitive advantage
• Complete vendor dependency
• Costs increase every year

Building approach:

• $800K/year for a world-class team of 4-5 people
• $50K/year in infrastructure and tools
• Genuine competitive advantage
• Complete ownership
• Capability that compounds over time
• Costs stay flat or decrease

The building approach costs roughly the same. But instead of renting capabilities that anyone can rent, you're developing assets you own and talent that improves.

After five years of SaaS: You've spent $4 million and own nothing. You're exactly as capable as every competitor who spent the same.

After five years of building: You've spent $4 million and own a technology platform tailored to your business, plus a team that deeply understands your domain. You're more capable than you were last year, every year.

The maths isn't even close.

The Talent Advantage

Here's something else the building approach creates: a talent moat.

Good people want to build things. They want to create, not configure. They want to ship, not submit tickets. They want to solve problems, not administer software.

Organisations that build attract and retain better talent. They become known as places where engineers can do real engineering, where product people can shape actual products, where impact is visible and immediate.

Organisations that only buy become talent deserts. The best people leave for places where they can actually make things. What remains are administrators, people skilled at vendor management but incapable of creation.

This compounds over time. Building organisations get better at building. Buying organisations lose even the ability to evaluate what good looks like.

Five years in, the building organisation has a team that's shipped dozens of projects, learned from failures, and developed deep institutional knowledge. The buying organisation has a team that's managed vendor relationships and implemented other people's software.

Which organisation would you bet on?

The Strategic Decision Framework

Not everything should be built. Here's how to decide:

Build when:

• It touches your customers directly
• It embodies what makes you different
• Speed of iteration matters
• Deep integration with your processes is required
• You need capabilities that don't exist in the market
• Owning the data is strategically important

Buy when:

• It's genuinely commodity (payroll, basic accounting)
• You have no unique requirements
• The market solution is truly excellent
• Building would distract from higher priorities
• The domain requires specialised compliance expertise

The key question:

Would a competitor using the same tool have the same capabilities as you?

If yes, it's not a source of advantage. It might still be worth buying for efficiency, but don't pretend it's strategic.

If no, if your specific needs require specific solutions, then building is likely the right choice. The stalemate serves no one except vendors.

Making the Shift

If you're currently deep in SaaS stalemate, here's how to start shifting:

1.
Audit your current stack. What are you paying for? What percentage of each tool do you actually use? What would happen if each vendor doubled their prices or disappeared?
2.
Identify stalemate candidates. Which systems do all your competitors use? Where are you paying for parity rather than advantage?
3.
Find your leverage points. Where would custom software create genuine differentiation? Customer experience? Internal operations? Data utilisation? Partner integration?
4.
Start small. Don't try to replace everything at once. Pick one system where building makes sense. Prove the model. Build capability and confidence.
5.
Hire differently. You need people who can build, not just administer. This might mean different roles, different skills, different profiles than your current team.
6.
Accept transition costs. There will be a period where you're paying for both old SaaS and new capability. This is investment, not waste. The alternative is permanent stalemate.

The Endgame

In ten years, every industry will have a divide:

Organisations that build

Will have technology perfectly suited to their needs, developed by teams that understand their business deeply, evolving at the speed of opportunity. Their software will be a genuine competitive advantage, something competitors can't replicate by writing a check.

Organisations that only buy

Will have generic technology that provides generic capabilities, rented from vendors who serve all their competitors equally. They'll be stuck in permanent stalemate, differentiated by nothing except brand and price.

The first group will set prices and define markets. The second group will compete on cost and hope for survival.

The question isn't whether this bifurcation is coming. It's which side you'll be on.

Your software is currently a stalemate.

It doesn't have to stay that way.

SaaScompetitive advantagesoftware developmentbuild vs buystrategydifferentiation