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Custom Software vs. Packaged Software

In the software development process, two terms appear very similar to each other: custom and packaged software. Thus, business owners must weigh Custom vs Packaged Software and consider the pros and cons of each.

Firstly, software development involves creating, designing, deploying, and supporting software. So, there are three software types: system, programming, and application. Custom software, which is specifically made for a purpose, is more expensive but can be altered as needed. Meanwhile, packaged software is sold to the public and includes programs grouped to perform different functions. 

In this article, we shall discuss the various similarities and differences between the two. This can help you identify which type should work best in providing business solutions.

What is Software Development?

Software development, according to IBM, involves a “set of computer science activities that are dedicated to the process of creating, designing, deploying, and supporting software.” So because software is a set of instructions, it can tell a computer what to do – a feature that makes them programmable.

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There are three basic software types: 

  • System software;
  • Programming software; and
  • Application software. 

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System Software

Firstly, system software is vital for a computer to function properly. After all, it provides core functions, including operating systems, utilities, disk management, and hardware management.

In particular, system software is responsible for the following:

  • Managing resources;
  • Facilitating communication between hard- and software components; and
  • Ensuring efficient application performance.

Key components of system software include the following:

  • The Operating System or OS
  • Device drivers
  • System utilities
  • Disk management software or tools
  • Bootloader
  • Virtualization software or tools
  • Firmware

System software offers a crucial layer of abstraction for efficient hardware interaction, often utilizing platforms like .NET development services. These services help in creating versatile and scalable system software, essential for seamless hardware-software communication and optimal resource management. As a result, this type of software enables computers to function efficiently.

Programming Software

Secondly, programming software or development tools provide programmers assistance with writing, testing, and debugging software. Moreover, programming software provides tools like linkers, text editors, debuggers, compilers, and others to create code.

So, here are some examples of programming software that improve productivity and software quality:

  • Text editors or text editor tools
  • Integrated Development Environments or IDEs
  • Compilers
  • Debuggers
  • Linkers
  • Version control systems or tools
  • Integrated build systems
  • Profilers or profiling tools
  • Code linters
  • Documentation generators

Application Software

Lastly, application software or apps help users perform specific tasks. 

Unlike system software, which is critical to a computer’s core operations, applications are user-focused and serve various purposes, catering to specific needs and interests. As a result, application software includes media players, security programs, and data management software.

Also, applications include those used to shop, socialize, and post pictures, such as Lazada, Facebook, Twitter, or Instagram. 

FinancesOnline Global Data Usage By App Category In Exabytes,

Source: FinancesOnline.

Here are some other types of business applications:

Custom Software vs Packaged Software

We all utilize various software on our devices (mobile phones, laptops, computers, etc.). However, not all of us are familiar with their types. So, we can classify software under two main categories: custom software or packaged software.

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Custom Software

On the one hand, custom software is a specifically-developed program created for a particular purpose. As such, this software tends to be priced higher than packaged applications, depending on its purpose and complexity. 

However, unlike packaged software, custom software can be altered or modified when needed. Thus, it’s one of the reasons why the cost of Custom Software is pretty high. 

Why Is Custom Software Expensive

For instance, a company may request the development of a custom-built management system to keep track of its employees’ working hours.

Packaged Software

Packaged software is made available for public consumption, while custom software is made specifically for an individual or an organization for a purpose. So, it’s developed and sold by developers for an actual market price. 

Moreover, it’s a collection of programs grouped to perform different functions. As a result, you’ll find it difficult to modify or alter these programs. 

Generally, developers group these programs, give them a specified name, and provide them as solutions to people. A clear example of packaged software would be Microsoft Office, which includes tools such as Word, PowerPoint, Excel, Access, and Note.

Comparing Packaged Software vs Custom Software

Below, we have provided a table comparing the two types of software:

Definition Collection of programs grouped to provide publicly different tools from the same family Specific and advanced program developed for one purpose for an individual or a company
Availability Available to the public and sold at particular prices Not commercially available, but is exclusive to third parties
Installation  Generally installed by third-party consultants Generally installed by an in-house team
Usability Simple to use, owing to a straightforward interface Complicated to use because it is custom-built
Implementation  May not require the design and development team Involves the design and development team
Integration Usually more difficult to integrate with other software Easier to integrate with other software
Modification You cannot easily modify You can modify when needed
Upgrades Tends to follow the supplier’s marketing objectives Focuses on the improvement of processes
Pricing May be cheaper, but it can end up being costly when making adjustments May require a higher investment, but the ROI will also be higher
Success Measure Market sharing and profitability User satisfaction and acceptance

Utilizing Custom Software to Address Business Needs

Science Soft defines custom software development as the process of addressing a business’ specific objectives and needs. It does so by offering tailored solutions through designing, building, integrating, scaling, and upgrading software solutions.

Why Custom Software Solutions Are A Must for Businesses 1024x536 Updated

Upon examining the table above, you can see the many benefits of employing custom software in your workflow.

Thus, if you’re on a software developer hunt, you need to crowdsource or get recommendations from people or businesses who have previously hired custom software development services. Moreover, you should also check a software development company’s previous projects to see if they can cater to your specific needs. 

Besides that, you must check if they value the significance of finishing a project on time. You can also visit their social media pages or business website to evaluate their online market presence and reputation in the field.

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Hire the Right Software Development Company for the Job!

For business owners, it is only natural to properly weigh your decisions first before employing the type of software to implement into your work activities. Thus, you must consider the question of Custom vs Packaged Software.

But overall, the market provides you with countless programs and tools that aim to help improve your business. However, these programs and applications cannot cater to all business types and requirements. After all, companies require software that offers solutions that can be easily adjusted according to their needs.

However, Custom Software Development from the Philippines can provide you with tailor-made software, programs, and applications. So not only can you maximize your work efficiency, but you also increase profits and Return on Investment.

So, which type of software are you more inclined to use: packaged or custom software? Tell us in the comments section below!

Xenia Labis


Xenia loves to learn and share what she has learned. She gathers all her learnings through reading books, watching videos and deep conversations. Nevertheless, she believes that the greatest learnings she has gathered are through her experiences.

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Comment 1

  • Avatar
    Web Designers in Clearwater, FL
    Nov 28th, 2020 - 4:35 pm - Reply

    Thanks a lot for writing such a wonderful article. Well written and the guideline is awesome and essential to follow. I’m looking forward to more informative posts further and I like to wish you all the best.

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