Commercial Off-The-Shelf (COTS) vs Custom Software Development
January 30, 2023
Maybe your company needs a new permissions system. Or maybe your CRM module needs an overhaul, and you’re weighing options. Whatever the situation, when you’re looking for new software, you’ll need to make the COTS vs custom software development choice at some point.
This may be confusing if you’re unfamiliar with one or both options. In this article, we’ll explain their differences and outline the best choice for several scenarios.
Before we start comparing, however, we need to know what each term means.
What is COTS software?
COTS stands for commercial off-the-shelf. As the name suggests, this refers to pre-made software you can buy and use immediately. Some well-known commercial off-the-shelf examples are Microsoft Office, Adobe Suite, and antivirus programs.
What is custom software development?
Custom software, on the other hand, is specifically tailored to meet particular business needs. While many think it’s always written from scratch, that’s only sometimes the case. Custom software development can also involve modifying an existing application in a strategic way.
Commercial off-the-shelf vs custom software development: the differences
There are five main differences between COTS and custom software.
Being a pre-made product intended for a broad audience, off-the-shelf software throws a wide net. That’s why it comes with a variety of features – but not all of them are going to be useful to you. On the flip side, custom software gives you a product that’s specifically designed for your needs. That means that while it may have fewer overall features, every single one will be something you need and use.
Scaling and flexibility
When you order a custom-built application, you can have it changed and adapted to your preferences. Since it was initially designed with your requirements in mind, you’ll be able to scale or change it as needed. Making changes to COTS software will be more difficult. Since it’s a boilerplate product, it will be harder to mould to your needs, and some changes might not be possible at all.
Many COTS products come with reliable long-term support. Especially if it’s a well-known application by a renowned company, you can usually count on assistance when you need it. With that said, updates or feature additions will likely happen on the developer’s schedule. Custom solutions also come with support for as long as you use the product – but you also have more control over the update schedule.
It’ll always be faster to buy an out-of-the-box product than to wait for a custom order. Some software partners speed up their delivery by optimizing processes and implementing Agile. But ultimately, bespoke development is bound to take at least a few weeks/months.
When you’re comparing software costs, there’s more to consider than just the initial purchase price. Total operating costs also include things like maintenance, scaling and future modifications.
Custom software, created from scratch for your needs, is more expensive. But you save yourself time, effort and money in the long run. Conversely, off-the-shelf software is initially cheaper. Companies usually charge per user or for a monthly/annual license. That’s why the total lifetime cost might be much higher in the long term – especially if you ever need to add more users or customize the application.
When COTS is the right choice for you
There are two main cases where buying off-the-shelf software makes the most sense.
When a solution that fits your needs perfectly exists
Naturally, if you’re sure that an existing application has the exact features you need, it’s likely a good fit for you. Especially if other people in your industry are successfully using it.
When you’re not planning to grow or make changes in the foreseeable future
One of the main issues with COTS is a lack of scalability and flexibility. A boilerplate application would work if you don’t intend to add new users, change your processes or grow your business much.
When custom software development is the right choice for you
Investing in custom software development is likely your best course of action in the below scenarios.
When you can’t find a solution that does everything you need
The main advantage of custom software is that it’s completely tailor-made. As such, you can request anything you want or need. If you can’t find the perfect combination of features you need, a custom software provider will create it for you.
When you need to integrate with existing systems
Not all existing systems out there interact well with each other. In a business that depends on applications running smoothly, that could be catastrophic. Custom software can be made in such a way as to ensure it works seamlessly with other systems you already use.
When you have specific needs or regulatory requirements
If a COTS solution you like doesn’t meet specific requirements, there isn’t much you can do. Custom software can be strategically built to comply with strict security and regulatory standards.
When you intend to scale or make significant changes in the future
Last but not least, custom software is much more scalable. It can be designed with growth in mind, making it easier (and more cost-efficient) to grow or modify.
Ultimately, the choice between commercial off-the-shelf and custom software comes down to your goals and priorities.
COTS will serve you well if you’re looking for a quick solution with a wide range of features but no customizability. Affordable in the short term, it’s suitable for companies looking for a ready-made application that won’t require any changes.
If your organization has more particular needs or you’re after a specific set of features, consider turning to custom software. The higher initial costs are often a worthwhile investment in flexibility, scalability and more control over your software in the long run.