Build vs. Buy Application Performance Monitoring Software: Weighing the Costs

Mobile Application Performance Monitoring (APM) is more critical than ever, as user expectations for performance standards continue to rise. Building in-house APM software to do the job can seem like an attractive solution for enterprises. In theory, it’ll be customized perfectly to your business needs. You’ll keep costs low by using internal resources instead of paying for third-party software subscriptions. While this approach is cost-effective in many use cases, application performance monitoring is not one of them.

Most in-house app performance monitoring solutions are a combination of open-source tools and internally developed code. While these solutions may superficially appear cheaper than a commercial software subscription, there are hidden functionality and opportunity costs. These costs often make commercial APM software not only the cheaper option, but the more profitable one.

When deciding what software to build and what to buy, the logical approach is to get a realistic estimate of the cost to build and maintain the software, and then compare it to the price of commercial software options. So, how much does it actually cost to monitor mobile app performance? Let’s find out.

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APM objectives

To start estimating development costs, you’ll need to assemble an inventory of the features you need. Specific app performance monitoring needs vary by organization, but there are some performance points common to all mobile apps. For an in-house APM tool to be effective, it must be reliable and robust at scale, and at minimum, be able to deliver the following:

• Apdex scores
• App launch time
• Custom app traces
• Network performance
• Client-side monitoring
• UI hang detection
• Screen loading times
• Performance alerts
• Complex grouping logic
• Advanced filtering
• Data visualizations
• Workflow integrations

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Costs of building in-house APM software

Typically, companies expect they’ll be able to create targeted tools to isolate and monitor what’s important to them, and avoid spending money on extras when developing their own APM suite. But the reality is that application performance monitoring is complex by nature and incurs numerous design, maintenance and infrastructure costs that often exceed the price of a commercial software subscription.

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Research and development

Research and development are typically the most straightforward among costs incurred from APM development. First, there is a time cost involved in assessing your organization’s APM needs and researching how to fulfill them. One of the best ways to kick off the research phase is by attending demo sessions with commercial software providers to help you understand how others are quantifying and addressing their performance needs.

Once you’ve determined your organization’s performance monitoring needs, it’s time to start comparing in-house costs with commercial solutions to see which will best suit your needs. Many companies make the mistake of only calculating development costs, but there are often hidden expenses. One of the risks of developing in-house APM is the possibility of overinvesting in specific features without also developing the basic functionality of purpose-built tools.

User interface design is a non-trivial contributor to APM development costs. APM tools collect immense amounts of data and translate it into insights that help you debug issues. This process necessitates a highly usable, well-designed frontend that makes parsing data, detecting trends, and debugging issues easy and efficient. Clear data visualizations, searchability, and ease of use are all essential for extracting value from your APM data.

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Infrastructure

APM has expensive and complex infrastructure needs. At Instabug, our APIs average about two million requests per minute, and terabytes of data flow through our services daily. We process these events to create data visualizations and reveal insights and patterns from billions of daily data points, which requires a powerful datastore. Our Backend Lead Sayed Alesawy describes Instabug’s backend architecture and our APM challenges, including the resources needed to build and maintain APM infrastructure, on the ClickHouse blog.

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Maintenance

As mentioned above, APM development costs are relatively straightforward compared to maintenance costs. As a rule, you can typically expect to spend at least three times as much on maintenance as you did on initial development. According to research published in the Harvard Business Review, IT projects frequently have cost and schedule overruns, on average by 27% but often exceeding 200%.

What’s behind the extra expenses? Keeping a complex tech project running is already resource-intensive, but application performance monitoring requires a large amount of ongoing resources and updates. You must keep the architecture updated and upgraded; you must integrate new devices and operating systems. Data points continue to proliferate.

Aside from the technical maintenance needs behind APM, there are personnel costs to consider as well. Custom code bases may become unusable if the developer(s) who wrote the code leave the company. In addition, most internal teams don’t have the same availability or expertise as dedicated external teams, which commit more of their resources to uptime and system maintenance.

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Opportunity costs

Perhaps the most expensive aspect of application performance monitoring isn’t the software development or the engineering talent required to maintain it; it’s the price of performance errors themselves. APM is preventative maintenance for mobile apps, designed to catch outages and issues before they impact revenue. App performance failures can cost several times as much as the price of commercial app performance monitoring software.

What are the opportunity costs of missing out on advanced APM features? App performance problems are a leading cause of uninstalls, which lower ratings and reduce revenue. Here are some of the facts:

• 71% of app uninstalls are caused by crashes; investing in app stability is one of the most surefire ways to reduce churn.
• 65% of users say a poor mobile experience negatively impacts their opinion of the brand.
• It’s impossible to maintain an app store rating above 4.4 stars if an app’s crash-free sessions rate is below 99%. A 1% drop in stability typically contributes to a 1-star drop in rating. Losing 2 stars often results in a 50% lower user acquisition rate.
• Mobile app quality directly impacts business revenue, with even 1-second delays costing as much as $0.08 per user.
• Performance-related customer retention contributes to higher profits. Businesses that boost retention by just 5% can see increases in revenue growth from 25-95%.

The bottom line is that mobile app performance leads to loyalty; loyalty contributes to growth; growth converts to profits. The significant impact of app performance on customer acquisition costs and retention-related revenue often steeply outweighs the price of a commercial APM software subscription.

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Evaluating commercial APM software

Commercial APM software is a known expense with advantages over the unpredictability that often accompanies building in-house. Some of the most compelling benefits of commercial software are increased customer retention and ROI, along with reduced downtime and in-house workload. Turnkey solutions also eliminate APM development and maintenance time from your schedule.

For example, our large and dedicated team of experts specifically developed Instabug APM for mobile apps. A monthly subscription fee for medium and large companies starts at $249, with customizable features to suit your needs. Enterprise Instabug plans are also available, with access to all features, organization-specific customizations and priority support at one monthly or annual fee.

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Instabug highlights:

• Premium commercial APM features such as diverse third-party integrations and code ownership free up your team’s time for more productive endeavors.
• Combined decades of experience from programming and product specialists devoted to APM research and development, backed by extensive funding from industry leaders.
• Years of history working with large enterprises, developing bespoke plans and continuous improvements for their needs
• Instabug-managed APM backend maintenance and uptime, freeing up your team to stay focused on core objectives
• Ongoing development accommodating new platforms and technologies and regularly introducing new features
• Built for ease, efficiency and quick identification, prioritization, and resolution of issues

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With greater visibility into what it takes to build and maintain your own APM service, it should be easier to determine whether to pursue a home-built or commercial solution. The diagram below summarizes the costs that contribute to building and running a functional APM tool.

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The next step in the research phase is to book a demo. Even if you don’t buy the product, attending a demo will give you a new lens to understand the problem you’re trying to solve and how others might approach it. We’ll provide an overview of Instabug’s features, explain how to prioritize issues and integrate with your workflow for efficiency, and demonstrate how to maximize value for your use case.