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Product Strategy

Custom software vs. Off-the-shelf software

Nisha Gopinath Menon
April 26, 2022

The efficiency of a business can be affected by the software it chooses to implement, and since there is a wide array of options available catering to all needs of companies, choosing the right fit can be difficult.

Contrary to popular belief, the “right fit” cannot be identified only by the delivery time and price. There are so many factors that affect the choice of software, such as scalability, updates, ready-to-use, and customization.

Choosing between ready-to-use (Commercial Off-the-shelf Software or “COTS”) and customized software (also known as Tailor-made software) is a tough decision. While COTS refers to the mass-produced applications made for the general public, tailor-made software is customized to feed the requirements of individual companies. However, since they cater to different needs of businesses choosing between the two may be puzzling.

Keeping that in mind, we have researched the plus and minus points for both kinds of software and put them to the test under the five most important categories to help you make an informed decision. Read ahead to find the perfect software solution for your company.

1. Cost-Effectiveness

Software development is expensive since it includes research, resources, and time. Multiple rounds of designing, building, testing, debugging, and implementation are costly processes.

However, Off-the-shelf software is moderately priced and costs less than Customized software since the development cost of COTS is divided among many buyers purchasing the same software. The license of COTS is distributed among many customers, thus dividing the development cost and reducing the selling price of the software.

Since Customized software is tailor-made as per a specific company’s requirements, and the license is given to only one buyer, the development cost is footed solely by an individual company, thus making the software expensive.

To conclude, considering the cost-effectiveness of the two kinds of software, COTS is a clear winner since its more affordable.

2. Integration

Integration is an essential factor to consider while choosing between a custom or off-the-shelf software. It refers to connecting different applications to effortlessly transfer data from one application to another.

One software is not enough to run an entire company. All businesses need various software to fulfill different needs, along with the handy option of integrating all applications for more effortless transfer and exchange of data.

Providing an option of effortless integration is often not found in Off-the-shelf software. There are always some applications that cannot be connected to the software from the backend. However, with custom software, you can share the applications you want to integrate with your software and avoid unnecessary wastage of time and resources during software implementation.

Therefore, if your company already uses many software and applications and has important data that must be enabled for transfer and exchange with the new software, choosing a tailored software is recommended.

3. Scalability

Scalability is another significant factor to keep in mind while purchasing either tailor-made software or commercial off-the-shelf software. Of course, if you are investing good money into an application, you probably would not want to keep buying new software every time your business requirements change a bit.

The option developers provide to make personalized changes and add or delete features in the software according to the current and future requirements that clients may have is called Scalability.

While purchasing software, you must check if your software has the bandwidth to accommodate changes according to your current requirements, as well as have space to take in future additions. Custom software is popular for being highly customizable and easy to modify and expand, while Off-the-shelf software usually does not come with enough space for too much customization.

4. Upgrades and Performance

Off-the-shelf software often provides timely updates at a very reasonable price, along with good after-sales customer service and consultation. However, this may not be the case with all COTS.

A common problem faced by many while using off-the-shelf software is that the updates are sometimes erratic and not on schedule, due to which users end up working on an outdated version. There are instances where the software stops working without an update, which results in a loss of productivity and time.

However, receiving upgrades is never an issue with tailor-made software because you are the owner of the application and have the freedom to add any features you want to it.

Tailor-made software is the right choice for you if your business ultimately depends on the particular software and you need customizations and regular updates. However, COTS is an excellent choice if you don’t plan to use the software much and simply need it for general purposes.

5. Convenient Implementation

Off-the-shelf software comes with several advantages when it comes to usage and implementation. Besides having a user community to answer all software-related questions, COTS is easy to install if your systems do not require numerous integrations with other applications.

Since COTS is made for the general public and not for a target audience, it is usually user-friendly and readily available. Additionally, off-the-shelf software is designed for general operating systems, such as Windows, Mac, Linux, etc.

While opting for custom software, you must remember that since it is specifically designed for your company, its development time is comparatively more than COTS. It often requires sorting of glitches at the time of implementation since it is made to fit your company systems.

However, opting for tailor-made software is easier in the long run since any issues in running the software, problems with updates or incompatibility with other software are ensured to be sorted by the developers. While purchasing COTS is convenient for the present, tailor-made software is recommended for long-term usage.


At the end of the debate: Commercial Off-the-Shelf Software vs. Custom Software, it is hard to choose a clear winner since both types of software are made to cater to different kinds of users and business needs.

Many COTS development companies offer amazing software at very affordable prices, along with excellent quality performance and many exciting features. However, if your company needs an option for scalability, expansion, and upgrades, we would recommend you choose Custom Software.

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Nisha Gopinath Menon