Guide
The real total cost of ownership: Custom ERP vs proprietary ERP
License fees are only the visible tip. A five-year TCO comparison of open-source custom ERP and proprietary ERP solutions for a 100-employee company.
When a 100-employee company compares ERP options, the proprietary quote usually leads with a seductive per-user price. The five-year picture looks very different once you add what the brochure leaves out.
The visible costs
Proprietary suites typically run $40 to $150 per user per month. For 60 actual users, that is $29k to $108k per year, before implementation, which routinely runs 1 to 2 times the annual license.
A custom ERP license cost is zero. You pay for implementation, hosting (typically $100 to $400/month), and support. Over five years, the license line alone often differs by $150k to $500k.
The invisible costs
Customization is where proprietary TCO explodes. Changes go through vendor-certified consultants at premium rates, and each upgrade risks breaking them. On a custom engineered system, modifications are first-class citizens: version-controlled, upgrade-safe, and built specifically for your processes.
User-count growth is the second trap. Hiring 30 people should not trigger a five-figure software bill, but per-seat pricing means it does, so companies ration seats and the 'system of record' quietly stops covering the whole company.
Which solution wins
Deep industry verticals with highly specific regulatory certification can justify proprietary suites. For the general operations of a 20 to 500 person company (finance, inventory, manufacturing, HR, sales) the custom ERP total cost of ownership advantage is decisive and durable.