Build vs Buy Calculator
Number of Integrations:
Number of Users(only that will use integration):
Your Current Average Monthly Subscription:
MRR:
ARR:
| Cost | Build | Buy |
|---|---|---|
| Total : 1 year | ||
| Total : 3 years |
| Initial Development Cost | ||
|---|---|---|
| Integration | Build | Buy |
| App (service) research and study | ||
| App (service) integration | ||
| Infrastructure | ||
| Monitoring system development | ||
| Token system development | ||
| Buy for Scale | ||
| Scalability | ||
| Initial investment total | ||
| Maintenance (year) | ||
| Integration | ||
| Monitoring Infrastructure | ||
| Token infrastructure | ||
| Scalability system | ||
| New engineer hire + learning | ||
|
Software Cost : Pay Per User ($1 per user)
Software Cost : Partnership Tier 1 ($10,000 subscription + $0.1 per user per month) Software Cost : Partnership Tier 2 ($50,000 subscription + $0.05 per user per month) Software Cost : Partnership Tier 3 ($100,000 subscription + $0.025 per user per month) |
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| Maintenance cost total | ||
| Business | ||
| Integration delay (Opportunity Cost) | ||
| Core feature delay (Engineer shortage) | ||
| Reduced Churn | ||
| Marketing on Interactor ecosystem | ||
| Business cost total | ||
When does it make sense to use the Interactor engine rather than build the integration in-house?
Generally, if you have fewer than 4 integrations and around 500 integration users or less, it might make sense to try building in-house.
Beyond that, the cost of in-house development far exceeds the price of the Interactor engine. Additionally, when you factor in the opportunity cost of delayed integration support and potential user churn due to limited integrations, the numbers quickly start to favor using the Interactor engine.
For instance, at integrations and users:
| In-house | Interactor | |
| Initial investment | ||
| Running cost | ||
| Total one year Cost |
| In-house | Interactor | |
| Business Cost | ||
| Total including Business Cost |
Interactor License
| Type | is the best option |
| Per User Cost | per month |
| Subscription Cost | per year |
| Total Interactor License Cost | per year |
Research and Study Costs
In-house:
This cost accounts for the time developers spend studying API documentation for the integrations. With an estimated 10 hours per integration, for integrations, at a developer rate of $100 per hour, this totals .
Interactor:
With Interactor, research time is significantly reduced since the developer only needs to know the necessary values for each service API, not the technical details.
Using Interactor engine, about half the time is required to integrate the first service, so 5 hours are needed, resulting in a cost of $500.
For additional integrations, the effort to learn decreases, as the process is identical for all future integrations. The estimate is approximately 20% of the time needed for in-house integration development.
Calculation for Interactor engine
$100 hourly rate x 10 hours x 20% x ( - 1) integrations + $500 first integration cost = per year
Integration Development
In-house:
Developing the integrations in-house would take approximately 50 hours per integration for a simple service, totaling for integrations.
Interactor:
Interactor provides standardized APIs for all types of integrations, making it simpler and quicker to implement service integrations, thereby reducing the time and cost required.
Subsequent integrations require only a fraction of the time and effort compared to custom-built integrations. The estimate is approximately 10% of the time needed for in-house integration development.
This revision enhances clarity and flow. Let me know if any further adjustments are needed!
Calculation for Interactor engine
$100 hourly rate x 50 hours x 10% x ( - 1) integrations + $2,500 first integration cost =
Monitoring Infrastructure Development
In-house:
When integrating more than three services, a custom monitoring system becomes necessary.
Interactor: $0
Interactor comes with built-in monitoring, eliminating the need for additional costs.
If there are three (3) integrations or fewer, the integrations can typically be managed without a formal monitoring system. The cost to develop a monitoring is around 10% of the total monitoring development cost, which is approximately $5,000 at minimum.
Calculation for develop monitoring for each app in-house for less than 4 integrations
$5,000 (monitoring system development cost) × 10% effort per integration × 3 integrations = $1,500
However, if you have more than three (3) integrations, it’s advisable to develop a comprehensive monitoring system, which could require an investment of $5,000 to $50,000.
Token Infrastructure Development
In-house:
Token management is crucial for securely handling multiple services. Developing a secure token management system requires senior engineers with extensive experience, which can cost upwards of $100,000.
Interactor: $0
Token management is included with Interactor, eliminating additional costs.
For three integrations or fewer, a formal token system is often not necessary. The cost to develop a minimal token management system is around 20% of the total development cost, which is approximately $15,000 at minimum.
Calculation for developing token manage for each app in-house for less than 4 integrations
$15,000 (token management system development cost) × 20% effort per integration × 3 integrations = $9,000
If you have more than three integrations, it’s advisable to develop a comprehensive token management system, which may require an investment of $15,000 to $150,000.
Scalability
In-house:
Addressing the unique requirements of each service can consume significant engineering resources.
Interactor: $0
Interactor is designed to scale seamlessly, so additional costs for scaling are minimal or nonexistent.
The estimated cost for scaling is around 10% of the overall development cost:
(integration) + (monitoring) + (token management) × 10% effort =
Integration Maintenance
In-house:
Regular updates and error handling require ongoing support.
Interactor: $0
Integration updates are included in the software cost.
The estimated cost for maintenance, considering the user number multiplier, is around 5% of the overall integration development cost:
Integration x 5% effort x 1.1 user number multiplier = per year
Monitoring Infrastructure Maintenance
In-house:
Maintenance of a custom-built monitoring system developed in-house requires ongoing resources.
Interactor: $0
Monitoring infrastructure is included with Interactor. .
The estimated cost for scaling is around 10% of the overall monitoring system development cost.
monitoring system x 10% effort x 1.1 user number multiplier = per year
Token Infrastructure Maintenance
In-house:
Token infrastructure is not only challenging to develop but also demanding to maintain. A dedicated senior engineer is required to ensure the stable operation of the token management system and service reliability.
Interactor: $0
Token infrastructure is included with Interactor.
The estimated cost for scaling is around 10% of the overall token management system development cost.
token management system x 10% effort x 1.1 user number multiplier = per year
Scalability Maintenance
In-house:
Individual service scalability requires ongoing maintenance by infrastructure engineering resources.
Interactor: $0
Scalability infrastructure is included with Interactor.
The estimated cost for scaling is around 10% of the overall token management system development cost.
scalability x 10% effort x 1.1 user number multiplier = per year
New Engineer Hire + Learning Maintenance
In-house:
On average, an integration engineer transitions every 2.5 years. New engineer require same amount of time to learn the integration methods and nuances.
Interactor:
New hires still need some training, but it is significantly less intensive compared to custom-built systems.
Many engineers don't want to touch other engineer's code leading to the new hire rewriting the existing integrations. This is a big waste of engineering resources yet repeated with most new hires.
Software Cost
In-house: $0
Since the solution is developed in-house, software costs are minimal.
Interactor:
The annual cost of using Interactor.
For users, is the best choice with:
subscription x users x $12 per user rate = per year
Selecting a higher tier dramatically reduces the per user rate.
| Pricing | ||||
| Pay Per Use | Partnership Tier 1 | Partnership Tier 2 | Partnership Tier 3 | |
| Subscription | $0 | $10,000 | $50,000 | $100,000 |
| Per User Per Month | $1.00 | $0.10 | $0.025 | $0.01 |
| Per User Per Year | $12 | $1.20 | $0.30 | $0.12 |
Integration Delay (Opportunity Cost)
In-house:
A two-week delay in integration can lead to a missed opportunity to increase revenue by approximately 1%.
Interactor: $0
Faster implementation helps avoid the opportunity costs associated with delays.
2 weeks equates to around 1/2 of MRR.
MRR x integrations x 1% missed opportunity rate = per integration.
Core Feature Delay (Engineer Shortage)
In-house:
Resource allocation for integrations can delay core product development, potentially reducing revenue by 0.5% per integration.
Interactor: $0
Engineers can remain focused on core features, thereby avoiding potential revenue loss.
ARR x integrations x 0.5% delay cost rate = per integration.
Reduced Churn
In-house:
Delays in integrations can increase user churn rates, as customers are more likely to leave due to a lack of native integrations.
Interactor: $0
Faster integration keeps customers satisfied and reduces churn risk.
With the Interactor engine, integrations can be added immediately, minimizing the risk of churn.
If one or fewer integrations, churn rate increases to 35%.
- If 1 integration: ${arr} ARR / 2 x 1 integrations x 35%
- If 2 integrations: ${arr} ARR / 2 x 2 integrations x 25%
- If 3 integrations: ${arr} ARR / 2 x 3 integrations x 15%
- If 4 integrations: ${arr} ARR / 2 x 4 integrations x 5%
- If > 4 integrations: $0 churn loss from not having less than four (4) integrations.
Marketing to Other Interactor Service Marketplaces
In-house:
Marketing the product in other service marketplaces can be time-consuming and costly.
Interactor: $0
Integrations built with Interactor can be marketed to other Interactor service marketplaces, creating additional revenue streams.
The estimated cost for marketing on other SaaS platform marketplaces is around 1% of the overall Annual Recurring Revenue (ARR).