Custom vs. Generic: How AI Changes the Economics of Software Development

Software development is one of the most intricate tasks for businesses. Not only does it take up a large amount of budgets in companies, but they also need to recruit special talent. Now, when making the critical decision of developing software, organizations have two primary paths to choose from. They can either deploy a generic software for all or get a custom-built software based on their particular needs. 

However, organizations usually come to an impasse because where generic products offer lower budget and quicker deployment, custom solutions take the lead with their customization options and seamless integration. How to get the best of both worlds, though? 

This is where artificial intelligence comes into play. Today, over 36% of IT companies have started using generative AI tools to accelerate coding and testing. As a result of this inculcation, both generic and custom projects now move faster and cost less. 

In this article, we will discuss generic and custom software and how AI is used for their development. Moreover, we will touch on the five economic changes instigated through its use.

What is a Generic Software?

Generic software is a pre-built application designed according to many organizations’ common needs. Instead of focusing on a single business, the application is developed once and then sold to multiple customers. 

Therefore, companies looking for quick deployment and lower cost opt for these solutions. However, due to its lack of focus on a company’s specific needs, adapting the product to specialized workflows often requires workarounds and middleware.

Key characteristics of generic software include:

• Needs minimal setup so teams can begin using it within days.
• The license fee per user is comparatively low because the development and maintenance costs are spread across a large customer base.
• Includes a standard feature set that aims to handle common business tasks such as CRM, project management, etc. 
• Offers configurable settings and plug-ins but has limited customization options when it comes to the core functionality of the software.



• Easy maintenance because the software providers are the ones who handle new updates or security fixes.
• Includes clear subscription and upgradation plans that help organizations budget properly. 

What is Custom Software?

Custom software, also known as bespoke software, is an application that is built for the unique needs of an organization. Instead of employing an off-the-shelf product, custom solutions are developed from the ground up. 

Therefore, the flexibility and control that come with custom development make companies gravitate towards it regardless of the high cost and longer deployment time.

Key characteristics of custom software include:

• All features and user interface elements are designed to match the specific objectives of a business.
• Due to the ownership of the source code, these solutions are highly customizable and can be modified freely without relying on third-party vendors.
• Can use custom APIs for smooth integration with existing systems, like ERP, CRM, etc.
• Changing needs can be addressed promptly by adding new data sources or user roles.
• Prices typically range from $50,000 to $500,000+, depending on the number of screens and complexity.
• Development can take several months to over a year based on the software’s design, coding, testing, etc. 

How AI Is Changing the Economics of Both Options for the Better?

Artificial intelligence is reshaping the economics of software development, and below we will see how.

Reduced Development Costs

AI-Generic Software

AI drastically reduces the manual labor needed for writing and validating code by automating repetitive tasks that take up a developer’s time and a company’s budget. Therefore, when developing generic software, vendors use AI-powered modules to make advanced features accessible to their customers in a short span of time. 

Moreover, even with the added sophistication, the AI-generic software remains affordable because the need for a large team of developers was eliminated early on.

AI-Custom Software

As far as custom projects are concerned, AI-driven development tools translate company-specific requirements into working prototypes. These prototypes then generate the user interface layouts and data models with minimal human involvement. 

As a result, AI-custom software development reduces the cost for businesses by requiring a smaller team and fewer hours.

Higher Return on Investment (ROI)

AI-Generic Software

With AI, software development has become faster and more cost-effective. As a result, many projects recover their initial investment sooner and continue to generate long-term value. In addition, when AI-driven analytics are integrated into subscription-based software platforms, user engagement significantly increases. 

These platforms can further detect risks early and provide personalized in-app support, which leads to a 15-20% increase in customer retention. Plus, AI-enhanced cloud suites, like Microsoft 365 Copilot, automate tasks like content creation and yield an impressive ROI of up to 350% over three years.

AI-Custom Software

Custom software built with AI offers significantly better returns because it is designed to meet a business’s exact needs. For example, AI-powered solutions can help finance teams handle compliance checks or assist sales teams in writing personalized messages. No matter the use case, industry-specific AI features streamline workflows, speed up tasks, and reduce errors. 

As a result, AI-custom software delivers efficiency gains that generic or off-the-shelf options simply can not match. Moreover, it helps companies quickly spot inefficiencies, which results in major cost savings.

Faster Deployment

AI-Generic Software

Speed is crucial for companies, and AI helps with exactly that by significantly accelerating software delivery timelines. That is why generic software platforms are increasingly using AI to automate the development cycle. AI-powered continuous integration and deployment (CI/CD) pipelines now build, test, and deploy updates with minimal manual input. Therefore, processes that previously required days are now completed in hours.

AI-Custom Software

Custom software development has transformed completely due to AI. Now, the time-to-release has been reduced fundamentally without having to compromise on the quality of the software. To minimize manual setup, intelligent build systems interpret project requirements and automatically generate infrastructure configurations. 

Though that is not all, AI-enhanced sprint planners also adjust priorities and deliver the most valuable features first. Therefore, the previous timeline of initial release in months has now been reduced to just weeks for custom projects. 

Long-Term Maintenance

AI-Generic Software

Maintenance generally takes the largest share of the total project cost over the years. To mitigate these costs, AI automates updates and flags issues before they escalate. For example, in generic platforms, automated patch generation and code refactoring tools produce security fixes without requiring human review. 

AI-Custom Software

On the other hand, for custom software, AI-powered refactoring tools continuously analyze code health and identify any technical issues. Not only that, but improvements are also suggested promptly. Moreover, a software’s performance is monitored in real-time with the help of anomaly-detection models. 

These AI-powered maintenance capabilities solve a major problem many organizations deal with today: knowledge retention. 56% of organizations consider knowledge retention and transfer as one of their biggest challenges when developing and maintaining software systems. As experienced developers leave a project, their understanding of system architecture and custom implementations leaves with them. 

AI helps bridge this gap by automatically documenting code patterns, identifying dependencies, and preserving institutional knowledge in accessible formats that new team members can quickly understand.

Enhanced Productivity

AI-Generic Software

Beyond code generation and maintenance, AI has also helped teams work better together. In generic platforms, context-aware code completion and documentation assistants have saved developers and QA engineers significant work hours. As a result, the use of AI has made them more productive and enabled them to concentrate on other important tasks like design, strategic testing, etc..

However, to measure the true productivity of developers and QA engineers, employee productivity software, powered by AI, should be utilized. For instance, TimeBee time tracker for development teams provides valuable insight into how they allocate their time. Not only that, the tool’s ability to integrate with project management software like Jira also enables companies to keep an eye on the progress of a particular project and the time taken in a software’s development. 

AI-Custom Software

Things are a little different for AI-custom software in terms of productivity. Regardless of its dependency on AI, the intricacies make custom software development difficult without a development team available. However, this should not translate to companies’ inability to increase their team’s productivity. 

Here, you can again use TimeBee.app to easily eradicate the issues. With its features and AI-powered analytics, managers can ensure that developers are working well with the AI development tools.

Moreover, the insights provided can be both team and user-specific, with details including time tracked, activity summary, websites, applications, project progress, performance, attendance, and more.

Though that is not all, the use of employee productivity monitoring software also helps companies with change management. Once an AI-custom software has been deployed, the stakeholders can recognize any bottlenecks and improvement opportunities within the software. This, including the AI development tools, offers an added layer of security and maintenance for companies.

Generic vs. Custom Software and AI-Generic vs. AI-Custom Software

All in all, the use of AI in software development has countered some common issues faced in both generic and custom software. For example, generic software, though lower in cost, offered limited extension. Therefore, when particular needs were to be met, companies had to look for workarounds that reduced efficiency. 

The issue can now be efficiently handled by employing AI-generic software that embeds intelligent modules like automated analytics, conversational assistants, etc, directly into the application. Plus, the integration of these modules does not utilize any additional resources but still offers dynamic insights and transforms user productivity. 

Custom software, on the other hand, benefits more from artificial intelligence because, regardless of its specificity, integration, and customization, its total cost and deployment time have been too much for companies to ignore at times. 

AI-custom software offered a solution by amalgamating machine-learning models and automation with the bespoke approach of custom software. The result has been a need-specific solution that is not only flexible and extensible but also has a quicker deployment time and lower cost.

Below is a comparison of the four development solutions in terms of economics and operational characteristics.

Features	Generic	Custom	AI-Generic	AI-Custom
Initial Cost	Low ($1k-$50k)	Very High ($50k-$500k)	Moderate ($10k-$100k)	High ($30k-$300k)
Development Cost	Spread across many customers	Dedicated team	Automation reduces development hours by 30-40%	Up to 30% saved from custom development costs
Deployment Time	Days to weeks	Months to years	Hours to days	Weeks to months
Flexibility	Low (limited customization)	High (control of complete control)	Medium (customization with AI templates and plugins)	High (AI code and custom modules)
Maintenance	Updates managed by vendors	Maintained in-house or by contracted developers	AI-assisted patches	AI-driven patching and custom governance
ROI	1-2 years	2-4 years	6-12 months	12-18 months

Use Flatlogic: Customize AI Models Limitlessly

Flatlogic combines generic AI offerings with custom development by providing a hybrid platform where pre-built AI models come with extensive customization options. Therefore, instead of choosing between a generic solution and a time-consuming, custom-built software, companies can use Flatlogic’s AI-powered templates for CRMs, ERPs, SaaS platforms, etc, to modify every module according to their specific requirements.

Using Flatlogic, companies can, therefore, reduce their upfront cost and accelerate time to market along with complete code ownership and seamless integration.

Choose Flatlogic today to save over 300 development hours per project!

Key features of Flatlogic’s AI software development:

• Extend or replace components without rewriting the core code.
• Create applications ready for deployment in minutes using natural-language prompts.
• Change workflows and data models for your unique needs.
• Integrate effortlessly with third-party services, databases, and APIs.
• Built-in authentication and compliance safeguards.

Conclusion

As one of the top three fields embracing AI, the economics of software development has shifted fundamentally. Now, generic platforms, integrated with AI tools like Flatlogic, are saving companies time and money. 

However, fully custom-built software are the ones with the most drastic change in terms of cost, speed, and ROIs. Since AI now helps with routine code, resource management, and debugging, companies have lowered their operational costs.

Nonetheless, the one thing that cannot be excluded from this equation is the need for developers. No matter how sophisticated an AI model is, it cannot run on its own and needs developers. Those developers, in return, need to be monitored with employee productivity software. Using its AI-powered analytics, companies can ensure that all development projects are on track and the team is performing well.

Before doing all that, though, choose a reliable AI custom software development agent. Your trusted choice should be Flatlogic. Our code generator not only saves you hours in development but also efficiently reduces operational costs. There is nothing better than getting the code, its maintenance, and its ownership all in one package. 

Develop your AI-custom software today and deploy it tomorrow with Flatlogic. Create your account to get started or book a free consultation to learn more.