Every tool you rent charges you per seat. Hire someone and your software bill goes up. Same product. Same servers. Nothing changed except your team grew, and the vendor gets paid for it.
I started calling this the seat tax. Once you see it you can't unsee it.
Here's what it looks like for a real service company. I priced the top tiers on purpose because when we build for a client there are no tiers. Everything's included. So the honest comparison is against the best the vendor sells.
A shop with 20 techs runs ServiceTitan at roughly $245 to $500 per tech per month. Implementation alone runs five figures. That's $59k to $120k a year before anyone answers a phone. Add a receptionist at $60k fully loaded. Add scheduling and transcription seats at $40 a user. You're past $200k in year one, and every hire you make from here raises the number.
| Team size | Rented stack, per year | Owned build |
|---|---|---|
| 1 to 5 people | $13k to $18k and grows per hire | flat |
| 5 to 10 | $25k to $40k | flat |
| 10 to 30 | $75k to $130k+ | flat |
Now the other line. Sub $5k in hardware runs the whole thing. I know because my own company runs on a Mac mini sitting on a desk, a full CRM database plus a dozen other services on 12GB of a 926GB drive. Ten thousand customers is small data. A one time build plus a retainer for monitoring and upkeep. The line stays flat when you hire. That's the whole argument. One line moves with headcount. One doesn't.
I want to be straight about where this breaks, because the research my system pulled says the generic version of this pitch oversells it. And the failure stats are real. Most IT projects miss their objectives, and 60 percent of software cost lives in maintenance, not the build. That's not an argument against owning. It's an argument for vetting whoever builds it exactly as hard as you'd vet the SaaS company. Most people vet neither. They trust the bigger logo.
Build or rent is the easy question. Assets win when the asset meets or exceeds what you were renting, for the reason you rent it. The hard questions are the quality of your builder, the quality of your current vendors, and whether anyone wrote down what the software actually has to do. Get those three right and the seat tax is optional.
Check my math below. If it's wrong somewhere I want to know.