May 20, 2025
Every technology-driven company faces a critical question at some point: Should we build in-house or buy a third-party solution? This decision can significantly impact costs, scalability, and long-term agility. At Apophis, we take a structured, data-driven approach to ensure that every build-vs-buy decision aligns with both business objectives and technical realities.
When evaluating whether to build or buy, we first categorize expenses into two key financial models:
🔹 Capital Expenditures (CAPEX): One-time investments in development and integration.
🔹 Operational Expenditures (OPEX): Recurring costs, such as licensing fees, maintenance, and cloud hosting.
Our general rule is that if the CAPEX of a custom-built solution is lower than the OPEX of a third-party alternative over two years, we prefer building in-house. However, cost alone doesn’t dictate our decisions—we also factor in scalability, feature completeness, and maintenance overhead.
For a recent marketplace application expecting 100,000 monthly active users (MAU), we compared:
Option 1: Auth0 (Fully Managed ID Provider)
✅ CAPEX: ~$6,500 (2 weeks of development time)
❌ OPEX: ~$240,000 per year at 100K MAU
Total Cost Over 2 Years: $246,500
Option 2: Zitadel (Open-Source with Custom Role Management)
✅ OPEX: ~$500 per year
❌ CAPEX: ~$26,000 (2 months of development time)
Total Cost Over 2 Years: $27,000
Decision: While Zitadel required more upfront investment, it saved over $200K in operational costs over two years—making it the clear winner.
For a project requiring observability and logging, we compared:
Option 1: Datadog (Fully Managed Observability Platform)
✅ CAPEX: ~$13,000 (DevOps setup & configuration)
❌ OPEX: ~$2,000/month
Total Cost Over 2 Years: $61,000
Option 2: ELK Stack (Self-Hosted: Elasticsearch, Logstash, Kibana)
✅ CAPEX: $13,000 (initial setup)
❌ OPEX: 50% lower infra cost, but required 1 week/month of DevOps maintenance ($3,300/month)
Total Cost Over 2 Years: $79,200
Decision: Datadog’s lower total cost, reduced maintenance burden, and scalability made it the better choice.
Beyond CAPEX vs. OPEX, we also consider:
✅ Time-to-Market: We prioritize third-party solutions if a custom-built solution delays critical milestones.
✅ Technical Debt: Vendor-managed solutions reduce long-term maintenance burdens.
✅ Scalability & Performance: Some vendor solutions scale better at high usage volumes.
✅ Security & Compliance: If regulatory frameworks like HIPAA, GDPR, or SOC2 apply, built-in compliance from a third-party provider can be a major advantage.
Each decision undergoes a rigorous Tradeoff Analysis that evaluates:
📌 Total Cost of Ownership (CAPEX vs. OPEX)
📌 Feature Completeness vs. Custom Development Effort
📌 Scalability & Vendor Lock-in Risks
📌 Security, Compliance, & Maintenance Considerations
Taking a holistic approach ensures that decisions are business-aligned, cost-effective, and scalable in the long run.
At Apophis, our approach to Build vs. Buy is not just about cost—it’s about aligning technology choices with business strategy. By conducting detailed tradeoff analyses, we ensure that every decision is financially sound, technically robust, and scalable for the future.
