Per-seat pricing is not a trick. For a small team it is genuinely the cheaper option, and it moves cost from capital to operating expenditure, which many businesses prefer. The problem is not the model. It is that it gets evaluated over the wrong period.
The mechanism
A licence is a cost that scales with the thing you are trying to grow. A build is a cost that does not. Everything else in the comparison is detail.
Consider a team of 25 at $55 per user per month, growing 15% a year, with $3,000 of setup and $8,000 of configuration and consultant time. Over five years that is roughly $122,000. A $45,000 build with $900 monthly support and $120 hosting is roughly $106,000 over the same period, and the lines cross in year five.
Change one input and the answer flips. At 10 users the licence wins comfortably and for a long time. At 60 users growing 20% a year, the build overtakes in year two. This is why a single quoted comparison is not useful – the shape of your growth is the variable that decides it.
We built a calculator that takes the build cost as an input rather than assuming ours, so it works with a quotation from anybody. It is free and requires no email address.
The three costs that are usually left out
Configuration that upgrades break
Off-the-shelf products handle unusual requirements through customisation, and customisation is where the budget quietly goes. Worse, it is where it goes again – each product upgrade can break what was configured, and that maintenance is rarely in the original comparison.
The workaround tax
Where a product does not do something, someone does it manually. That time is real and it is almost never counted, because it is distributed across people who were not in the buying decision.
Exit
Ask what an export looks like before you need one. A build you own exports because you hold the database. A product exports what its vendor chose to make exportable, in the format they chose, and migration becomes a project rather than a task.
When per-seat is genuinely the right answer
- Your process is standard and a product already matches it.
- Your process is undocumented and inconsistent – a product imposes discipline you do not yet have, and that is worth more right now than bespoke software.
- You need something live in weeks against a fixed external deadline.
- The requirement is a commodity. Payroll, general accounting, email marketing. Building these is almost never justified.
- Headcount is flat. If seats are not growing, the compounding argument does not apply to you.
Four of the nine factors in our full comparison favour off-the-shelf. That is the honest count.