So your company has decided that you need a video customer communication channel. Good idea. According to TechTarget, the pandemic has accelerated the growth of real-time video services in almost every industry. And with the customer expectations shifting towards the digital, that trend is only expected to grow.
The question now is: how to acquire the right technology? There are two options: the first solution is to create a custom video calls platform, either from scratch or based on commercial infrastructure. The second is to purchase a SaaS license. SaaS stands for Software as a Service - where a provider develops an application, such as Vicodo, and offers it for commercial use for a monthly or annual fee.
But the decision to build or buy is often based around a vague idea of “competitive advantage” without really considering the facts and numbers. That has spawned many myths about application building. Let us take a look at some of them.
There are several popular opinions circulating online about why in-house video chat app development should be the go-to option:
- It is the cheaper solution because I will not have to renew my license each year.
- Our business needs are unique and the off-the-shelf video calling apps cannot cover them.
- Building a video chat from scratch is more secure because we have complete control over where data is stored and how it is protected.
Are those beliefs justified? Not necessarily.
While some of them might be true for big enterprises with their own multiple in-house developer teams and much fewer budget limitations, they might not work equally well for a medium or small business. And even corporate giants should not expect a quick return on their investment.
Below, we will examine each of those statements (and several more) and verify which of them check out and which are just myths that software houses would like you to believe.
What should you consider deciding to build or buy?
Video chat development costs
When compared to the fixed cost of a SaaS license (although here the matter can get slightly more complicated - we will get to that later), building a video calling application from scratch can be quite an endeavor. To fully realize the scope of such a task, let’s look at some of the factors that affect how much you need to spend on a custom video solution.
What affects the building price?
- size of the development team
- project management - if there is a PM available, what is the development method (agile, waterfall, etc.)
- developers’ location
- developers’ experience
- choice of infrastructure
- what platforms you want to support (desktop, Android, iOS, web)
- the scope of additional features like screen sharing, video call recording, or in-app messaging, or even industry-specific use cases such as customer location data access.
How this translates into numbers
Although the exact values might differ depending on whether you work with an in-house developer team or decide to outsource, the up-front cost of creating your video calling app is still looking intimidating.
According to the American communication SaaS company Stream and their article about telehealth applications, it can vary from 50,000$ for the basic MVP version to over a million dollars. That is more than most small and medium businesses would be willing - or can afford - to pay up-front for a single tool.
But even if we put the initial budget issues aside, investment of this scale is unlikely to pay off soon. When we compare the price of off-the-shelf applications to the potential development and maintenance cost, it turns out that the sums even out in... five to ten years.
By that time, communication technology will most likely have evolved significantly. This either means having to invest additional funds into creating new features and keeping the application up-to-date with the emerging customer needs - or using a platform that feels and looks outdated.
Commercial live video calling app costs
So when you choose an external service provider, you only need to pay for the user license, right? Well, that depends.
On one hand, you don’t need to worry about outdated tech. The vendors need to constantly raise the quality of their services and include new features - or they would not attract customers in a very competitive market.
That does not mean, however, that the off-the-shelf solutions do not generate any up-front costs.
Depending on the vendor’s architecture and the features they offer, the integration and customization of the service might require some extra work from your developer team - so that the new service is seamlessly integrated into your workflow. To make that transition as hassle-free as possible, it might be worth trying out trial versions of several products - and choosing the one that is the easiest to implement.
Maintenance & scalability
The hidden costs
The common opinion is that developing your live video calling solution, especially based on an existing WebRTC platform, is cheaper than continually buying a SaaS license. After all, you only pay once instead of making a payment each year or month - right? Perhaps that would be the case - if not for the maintenance cost.
Let's say that for a fresh digital product with a small base of users, the company needs to cover fixed server and infrastructure costs. However, we are talking about a unique product - software dedicated to video chat in real-time. Video calls are extremely bandwidth-consuming, and depending on the number of minutes you use each month, you might be looking at a four- or even five-digit number each month.
In this case, a commercial live video solution is the worry-free option. The infrastructure and server costs are already calculated into the provider business plan - so you are covering them the moment you pay for your license.
What is more, if the vendor specializes in video communication, it is more than likely that they own a global infrastructure. This means that the users always connect to the server that is closest to them geographically - this decreases latency and guarantees smooth video connection.
Keeping it crash-free
So you have developed your video communication platform, and the production version seems to be running smoothly. That is good - however, that does not mean the developer work is over. You will still need at least one expert who can take care of the code and update the software to the latest OS versions (a must for mobile apps). That, of course, generates additional costs.
You also need to ask yourself how you want to handle any potential emergencies. Do you need 24/7 monitoring? And if so, can you afford to do that in-house, or are you going to outsource it? If any technical problem appears, do you have someone available to fix it at any given time, or do you need to hire an external team of devs or DevOps?
How do existing video call solutions handle this issue? Although the provider is responsible for the performance, you might want to check a few things before purchasing a license. For example, if they include 24/7 monitoring, how long is their standard response time, and if you can sign a Service Level Agreement (SLA) beforehand.
Although commercial communication solutions tend to generate lower costs, it is not necessarily a better option in this regard. However, you also need to ask yourself if you have the budget and the right team to solve any technical issues faster than the potential service provider.
Scaling your business
When you create your video chat tool, you can only estimate what your future user base is going to be - by using the data about your current customers and your growth predictions. But as your business gets bigger, the infrastructure cost grows all well. A sudden increase in customers might also cause performance issues that will require some extra work - or cause a sub-par user experience.
Commercial solutions can usually afford to invest more in the infrastructure. That is because the product is one of their revenue-generating projects instead of just a part of their company toolkit.
Another crucial question is: how long will it take before your employees can connect with customers (or before the users can contact you)? According to WebRTC Ventures who specialize in video application technology, the development process can take from a few months to over a year - depending on the features you want to include and if you want to create your WebRTC solution from scratch.
Can you afford to wait that long? Not according to the industry experts. In Gartner’s Emerging Trends in Customer Service Technologies report, they prove that real-time video chat is no longer a novelty - it is a widely recognized trend on its way to becoming the industry standard.
Customers’ expectations are shifting towards the personal, quick, and digital, and the global pandemic has only accelerated that trend. As you are working on your custom solution, you might notice that your users are already migrating to different companies - those that offer fast, personal, and human-to-human support experience.
For commercial video platforms, the setup and integration period may vary from several days to just a few hours. It depends on many factors, such as the provider’s system architecture (for example, if they offer API access), the availability of your IT team, and the type of your contract.
Building a platform in-house means that you get precisely the functionalities your business needs - and that fit perfectly into your workflow. If you allocate a big enough budget, you can design a product that includes industry-specific features, like location permission that helps insurance agents verify damage sites or video shopping for B2C sellers.
When using an off-the-shelf video chat application, you usually get little control over its development roadmap. Although some vendors are open to buyers’ suggestions, you can never be sure that they will prioritize functionalities important to your business in particular.
However, considering the huge price difference between building the tech yourself and purchasing a license, you need to ask yourself if it isn’t worth compromising a certain feature if that means reducing the cost and getting your solution onto the market sooner.
Even before the COVID-19 pandemic, there was a wide choice of audio and video apps on the market. Since then, that number has only increased. The chances are, at least several of them are dedicated to your business sector - and even if there isn’t, perhaps you can bypass the issue by using the service’s open API.
Design & user experience
But custom features are just one side of this problem. Another is the design, the experience of your users and how the way the platform looks reflects your brand identity.
Developing the application in-house - provided that you have the right team of experts and budget - basically guarantees that the solution will look the way you want it. The only downside is: if you ever need to rebrand your business, your platform will require costly design and front-end work.
On the other hand, many of the platforms available on the market allow a certain level of customization - that usually means the buyer can upload their logo or change the color scheme to a certain degree. However, those still usually feature the vendor’s branding somewhere in the design. It is not necessarily an issue - but it might be a missed chance to promote your brand and engage your customers.
But there is a way to marry those two solutions. We are talking about white-label video software designed with customization in mind. It allows buyers to fully adapt the visual layer of the platform so that it fully represents their corporate identity. Most importantly, it also lets users remove the vendor logo - so that the solution looks like a native part of the buyer company toolkit.
If you decide to choose a white-label option, you should also pay attention if it requires additional work from developers that can generate costs. We recommend being on the lookout for services that include an in-app editor - one that does not call for technical skills.
Trusting a third-party provider with the data of your company and customers does not (and should not) come easy. Throughout the pandemic, we have heard countless news about security breaches or unwanted meeting participants. This type of media exposure is not a good advertisement for any business.
However, building and upkeeping satisfactory security standards can be costly and challenging even for very experienced development teams. With constant pressure to deliver a working product, it is not unusual to miss minor but crucial security holes.
So if you would like to purchase a commercial application, make sure that the vendor prioritizes keeping their services secure and is transparent about what they do to ensure it. Check how the data and video connections are encrypted, what are their users authentication methods (for example, if they offer 2FA, two-factor authentication), and where their server is located. If you operate from Europe or work with European clients, make sure that the service is GDPR-compliant.
Depending on your industry, there are also other requirements you might want your video app vendor to fulfill. For example, if you are based in the US and are buying an app with video telehealth calls in mind, the product must meet HIPAA standards, and if you are operating in the education sector, the solution should be FERPA-compliant.
Deciding whether to build or buy an audio and video calling solution is not a simple task. Although purchasing commercial services seems to be a hassle-free option, especially for companies with budget constraints, there is no definite right or wrong answer to this dilemma. There are, however, several crucial factors that you need to consider before making a decision, and these are:
- up-front cost
- maintenance cost
- business-specific use cases
- developers availability and experience
- feature scope
- customization scope
- data security.
But if you were to take only one thing from this article, let it be this: choosing an off-the-shelf product does not mean compromising on quality. Quite the opposite - it can help you implement and integrate video chat faster, and always stay on top of the technological market trends.