Build vs. Buy & Total Cost of Ownership

Almost universally organizations grapple with this decision: build a custom in-house solution or buy an off-the-shelf product? It’s a decision that can shape budgets, timelines, and outcomes for years to come. While the allure of a tailor-made system might tempt tech-savvy teams, a sobering statistic from Gartner brings the stakes into focus: up to 70% of IT budgets are often consumed by maintaining existing systems rather than creating new capabilities. This reality underscores a key principle—Total Cost of Ownership (TCO)—that EdTech leaders must not overlook.

TCO isn’t just about upfront costs; it’s a long-term lens that reveals the hidden expenses of maintenance, updates, and staffing. For schools, districts, and EdTech providers, focusing on what truly sets you apart—rather than reinventing the wheel—can unlock resources for innovation and mission-driven impact. Let’s explore why TCO is the strategic compass you need to navigate the build-vs-buy debate in education technology.

The Hidden Costs of Building

Building a custom solution can feel empowering. Your team knows your needs intimately—whether it’s a learning management system (LMS) tailored to a district’s curriculum or an app designed for a niche student population. A bespoke system promises control, flexibility, and a perfect fit. But the initial thrill of creation often fades when the reality of ownership sets in.

Consider the numbers. Gartner’s research highlights that maintenance—think functional updates, security patches, infrastructure upgrades, ongoing QA, and compliance—can devour up to 70% of IT budgets. That’s not a one-time hit; it’s a recurring drain. A district building its own student data platform, for instance, might nail the launch, only to find itself bogged down by server costs, bug fixes, and annual audits to meet privacy laws like FERPA. Add in the need for dedicated staff—developers, testers, cybersecurity experts—and the price tag climbs higher.

Real-world examples bear this out. A mid-sized school district in Ohio once built a custom attendance tracking tool to replace a clunky vendor product. Year one was a success: costs stayed low, and staff cheered the streamlined interface. By year three, however, the district was scrambling to patch vulnerabilities, update integrations with new state reporting systems, and train a revolving door of IT hires. The TCO ballooned far beyond the cost of a commercial alternative, diverting funds from classroom resources.

Building isn’t just a technical choice—it’s a financial commitment that can strain even the most robust budgets. The question becomes: Are you solving a unique problem, or are you duplicating what’s already out there?

The Case for Buying

Buying an off-the-shelf solution flips the script. Established EdTech products—like an LMS, assessment tool, or parent communication platform—come with a ready-made foundation. Vendors handle the heavy lifting of updates, security, and compliance, spreading those costs across a broad user base. For cash-strapped schools or startups, this can mean predictable expenses and faster deployment, freeing up resources for what matters most: enhancing education.

Take a rural district needing a student engagement platform. Building one might take months and tie up IT staff, while a subscription to a tool like Seesaw or ClassDojo delivers instant functionality—classroom activities, parent updates, and analytics—without the overhead. The vendor absorbs the TCO burden, from server maintenance to GDPR compliance, letting the district focus on teaching and learning.

Buying isn’t perfect, of course. Customization may be limited, and subscription fees can add up. Yet the trade-off often favors scalability and stability—key for organizations aiming to grow without breaking the bank. The Gartner stat looms large here: when 70% of IT spending goes to upkeep, outsourcing that upkeep can be a lifeline.

TCO as a Strategic Lens

So how do you choose? TCO offers a framework to weigh both paths. It’s not just a number—it’s a way to align technology decisions with your mission. Start by mapping out the full lifecycle of a solution:

• Upfront Costs: Building requires developer time and tools; buying involves licensing or subscriptions.

• Maintenance: Custom systems demand ongoing fixes and upgrades; vendor products bundle these in.

• Staffing: In-house solutions need dedicated teams; purchased ones lean on vendor support.

• Compliance: Education faces strict regulations (e.g., COPPA, FERPA); vendors often bake this in, while custom builds require constant vigilance.

• Scalability: Will the solution grow with you, or will expansion strain your budget?

Next, zero in on what differentiates your organization. For an EdTech startup, that might be a unique AI-driven tutoring feature—worth building if it’s your competitive edge. For a district, it could be seamless integration with existing tools, better served by a vendor who’s already cracked the code. Reinventing commodity features—like basic gradebooks or messaging—rarely justifies the TCO hit when robust alternatives exist.

Real Impact in Education

The build-vs-buy choice reverberates through education. A university that bought a commercial LMS saved millions over a decade compared to peers who built and maintained their own, redirecting funds to student scholarships. Conversely, an EdTech firm that built a bespoke analytics platform gained a market edge—but only after weathering years of high TCO to refine it. Success hinges on knowing your priorities and resources.

At Ninjo, we’ve seen both sides. One client, a growing charter network, opted to buy a student information system rather than build, slashing TCO by 40% and speeding up rollout across campuses. Another, a startup with a groundbreaking literacy tool, chose to build its core offering in-house while licensing secondary features, striking a balance that fueled innovation without bloating costs. The lesson? TCO isn’t one-size-fits-all—it’s a tailored calculation.

A Smarter Path Forward

The build-vs-buy debate isn’t about right or wrong—it’s about sustainability and impact. Gartner’s 70% warning is a wake-up call: long-term costs can derail even the best intentions. By focusing on what truly sets you apart, you can avoid sunk costs and invest in innovation, user experience, and your core mission—whether that’s student success, teacher support, or market leadership.

So, which hidden cost of ownership has surprised you most when scaling solutions? Maybe it’s the staffing churn, the compliance maze, or the relentless pace of updates. Whatever it is, TCO shines a light on it, guiding you toward decisions that endure.

At Ninjo, we help EdTech organizations and schools navigate this crossroads. We analyze your needs, model TCO scenarios, and recommend strategies—build, buy, or hybrid—that maximize value. Ready to make technology work for your mission, not against it? Let’s talk about your next step.