Stack economics · build vs. buy

Build-vs-Buy Amortisation

Loaded engineering time plus the permanent maintenance tax, against a vendor price that escalates every renewal — on one discounted cash-flow basis over the same horizon.

01Build it in-house

Engineers assignedFTEMonths to paritymonthsLoaded cost per engineer$ / monthSalary, benefits, overhead — not base salary.Maintenance per year% of buildThe permanent tax a shipped internal tool carries.Infrastructure$ / month

02Buy the vendor

Licence per seat$ / yearSeatsseatsImplementation fee$ one-timeRenewal escalation% / yr

03Comparison window

HorizonyearsDiscount rate% / yr

04Cumulative cost by year

Year	Build cost	Build cumulative	Vendor cost	Vendor cumulative
Start	$240,000	$240,000	$15,000	$15,000
1	$61,200	$301,200	$20,000	$35,000
2	$61,200	$362,400	$21,000	$56,000
3	$61,200	$423,600	$22,050	$78,050

Engineer cost is flat across the horizon and the build is treated as paid at the start, which favours building slightly. Vendor seats are assumed constant. No switching costs in either direction, and no revenue upside from owning the tool — those belong in the business case around this calculation, not inside it.