Your company needs custom software. Maybe a client portal, an internal tool, or an integration between two systems that refuse to talk to each other. The question isn't whether to build it — it's who builds it.
Option A: hire a developer (or a team) and build it in-house. Option B: outsource it to a software studio. Both work. Both have trade-offs that most people underestimate.
The real cost of building in-house
Hiring a mid-level developer in the Netherlands costs between €55,000 and €75,000 per year in gross salary. Add employer costs — pension, insurance, equipment, office space, training — and you're looking at €75,000–€100,000 annually. For a senior developer, add another €15,000–€25,000 on top.
But salary is only part of the picture:
- Recruitment — Finding a good developer takes 2–4 months. Recruitment fees run 15–20% of annual salary. That's €11,000–€15,000 before your new hire writes their first line of code.
- Ramp-up time — A new hire needs 2–3 months to become productive in your codebase, your domain and your workflows. During that time, you're paying full salary for partial output.
- Retention risk — The average tenure for developers in the Netherlands is 2.5 years. When your only developer leaves, the project knowledge walks out with them. Replacing them restarts the recruitment and ramp-up cycle.
- Skill gaps — One developer can't be an expert in frontend, backend, infrastructure, security and mobile. Most projects need at least three different specializations. Hiring all of them means tripling your cost.
For a single project that takes 3–6 months to build, the in-house route easily costs €80,000–€120,000 when you factor in everything — and that assumes you find the right person on the first try.
The real cost of outsourcing
A Dutch software studio typically charges €80–€130 per hour. For a mid-sized project (400–800 hours), that's €32,000–€104,000. The wide range depends on complexity, integrations and how well the scope is defined upfront.
What you get for that money:
- A full team from day one — Frontend, backend, architecture, QA. No recruitment, no ramp-up.
- Production starts immediately — A good studio delivers working software within the first two weeks. Compare that to the 4–6 months of hiring and onboarding for an in-house team.
- No ongoing payroll — When the project is done, the cost stops. No bench time, no make-work to keep developers busy between projects.
The trade-offs:
- Less control over daily work — You steer through sprint reviews and priorities, not by walking to someone's desk. This works well with clear communication. It falls apart with vague requirements.
- Knowledge lives outside your company — The studio knows your system. If you switch studios or bring it in-house later, there's a handover cost. Good documentation reduces this, but doesn't eliminate it.
- Hourly rates feel expensive — €100/hour sounds like a lot until you compare it to the fully loaded cost of an in-house developer (which works out to roughly €50–€65/hour before you account for non-productive time, management overhead and benefits).
When to build in-house
In-house development makes sense when:
- Software is your core product — If you're a SaaS company or a tech startup, your codebase is your competitive advantage. You need people who live in it full-time.
- You need continuous development — Not a one-time project, but ongoing feature work that will keep a team busy for years. At that scale, the fixed cost of salaries beats hourly rates.
- Domain knowledge is extremely specialized — Medical devices, financial trading systems, embedded hardware. If it takes a year to understand the domain, outsourcing the learning curve doesn't make sense.
- You can attract and retain talent — This is the hard part. If your company isn't a tech company, competing for developers against companies that are is difficult. Salary alone doesn't win — developers want interesting problems, modern tools and technical peers.
When to outsource
Outsourcing makes sense when:
- You have a defined project with a clear end — Build a tool, launch it, maintain it. No need for a permanent team.
- You need multiple specializations — A project requiring React, .NET, cloud infrastructure and mobile development needs four different skill sets. One hire won't cover it.
- Speed matters — An external team can start this month. An internal hire starts producing code in six months. If the business case has a deadline, the math is simple.
- You want predictable costs — A fixed-scope project with a studio gives you a clear budget. An in-house team gives you a monthly payroll regardless of output.
The hybrid approach
Most growing companies end up somewhere in the middle. A common pattern:
- Outsource v1 — Get the product built and launched by a studio. Validate the business case with real users.
- Hire your first developer — Once the product is proven and the roadmap is clear, bring someone in-house to own it. They inherit a working codebase, not a blank page.
- Use the studio for specialized work — Keep the external team for spikes: a mobile app, a complex integration, a performance overhaul. Things that need deep expertise for a short period.
This approach lets you de-risk the project before committing to permanent headcount. If the product doesn't work out, you've spent €40,000 — not €200,000 in salaries for a team you now need to reassign or let go.
Five questions to ask before deciding
- Is this a project or a program? — A project has an end date. A program runs indefinitely. Projects favor outsourcing. Programs favor in-house.
- How fast do you need to start? — If the answer is "this quarter," hiring is too slow.
- What happens after launch? — If the system needs daily changes and new features every sprint, you need a dedicated team. If it needs monthly updates and bug fixes, a maintenance contract with a studio is cheaper.
- Can you manage a technical team? — In-house developers need a technical lead, code reviews, career paths and interesting work. If you can't provide that, they'll leave.
- What's the total cost over three years? — Don't compare a studio's project quote to a developer's annual salary. Compare the studio's project quote plus three years of maintenance to three years of salary plus recruitment plus management overhead. The numbers often surprise people.
Not sure which route fits your situation?
Describe your project and your team — I'll give you an honest recommendation. Sometimes that means "hire someone." Sometimes it means "let's build it." Either way, you'll have a clear picture of the costs, timelines and trade-offs for your specific case.