Build vs Buy Monitoring: The Real Cost Breakdown for IT Teams

Every IT team eventually faces this question: should we build our own monitoring system or buy an existing solution?

On the surface, building seems attractive. You get complete control, no vendor lock-in, and the illusion of "free" since you're using internal resources. But the math rarely works out that way.

Let's break down what it actually costs to build, when building genuinely makes sense, and how to make the right decision for your team.

The True Cost of Building Your Own Monitoring System

The initial appeal of building is understandable. You already have developers on staff. Open-source tools are free. How expensive could it be?

Here's the reality check.

Development Costs

Building a basic monitoring system takes 3-6 months minimum with dedicated engineers. According to industry research, the fully-loaded cost of a software engineer (salary, benefits, equipment, office space, management overhead) runs approximately 2.7x their base salary.

For a mid-level engineer earning $140,000 annually, that's roughly $378,000 in real costs per year. If you need two engineers for six months, you're looking at $189,000 just for the initial build, and that's before your system does anything useful.

The Features You'll Need to Build

A functioning monitoring system requires:

Data collection agents or integrations
A time-series database for metrics storage
Alert routing and notification logic
A dashboard interface
Historical data retention and analysis
Authentication and access controls
Redundancy (because your monitoring system going down during an outage defeats the purpose)

Each feature adds weeks or months to your timeline. And you'll likely underestimate the complexity of each one.

Maintenance: Where the Real Costs Hide

Development is just the beginning. Industry data consistently shows that maintenance accounts for over 50% of total cost of ownership for any software system.

Plan for:

At least 20% of your initial development cost annually for maintenance
Security patches and updates
Bug fixes that surface in production
Performance optimization as data volumes grow
New feature development as requirements change
On-call rotation for the system itself (yes, you need to monitor your monitoring)

There's also knowledge transfer risk. What happens when the engineer who built your monitoring system leaves? Custom systems often become technical debt when the original team moves on. The tech industry experiences roughly 36% annual turnover, so this isn't a hypothetical concern.

Infrastructure Costs

You'll need servers, databases, and storage. For monitoring, you need high availability since the whole point is to know when things break. Running redundant infrastructure across availability zones adds significant cost.

And here's the uncomfortable truth: you need to monitor your monitoring system. The infrastructure that runs your monitoring needs its own alerting, creating a recursive problem that commercial solutions have already solved.

The Hidden Opportunity Cost

Every hour your engineers spend building monitoring infrastructure is an hour they're not spending on your core product. For most companies, monitoring isn't a competitive differentiator.

Ask yourself: is building monitoring systems really the best use of your engineering talent?

When Building Actually Makes Sense

Building isn't always the wrong choice. Here are legitimate scenarios where it might be justified:

You Have Truly Unique Requirements

If your monitoring needs are genuinely unusual (not just "we want it exactly our way"), and no commercial solution can accommodate them, building becomes more defensible.

This is rare. Most companies overestimate how unique their requirements are.

You're a Monitoring Company

If monitoring is your core business, obviously you should build it. This is why Datadog, New Relic, and similar companies exist.

Massive Scale with Specific Constraints

Enterprise organizations processing petabytes of telemetry data with strict data residency requirements might find that building a custom solution makes financial sense at scale.

But "might" is doing heavy lifting in that sentence. Even at enterprise scale, many organizations find that commercial solutions are more cost-effective when you factor in total cost of ownership.

You Have 1000+ Employees and Dedicated Platform Teams

If you have the engineering resources to build, maintain, and iterate on monitoring infrastructure without impacting core product development, building becomes more viable.

For most organizations under this threshold, the economics favor buying.

When Buying Is the Better Choice

You Need to Move Fast

Commercial monitoring solutions deploy in hours or days, not months. If you need visibility into your systems now, buying is the only realistic option.

You Don't Have Specialized Monitoring Expertise

Building reliable monitoring systems requires specific expertise in time-series databases, alerting algorithms, and distributed systems. If your team doesn't have this experience, they'll learn expensive lessons during development.

Your Team Is Small to Mid-Sized

For teams under 100 people, the math almost never works out in favor of building. The engineering time required to build and maintain monitoring infrastructure would be better spent on your actual product.

You Want Proven Reliability

Commercial vendors have already solved the edge cases and scaling challenges you'd discover the hard way. They've built redundancy, handled data growth, and debugged alerting logic across thousands of customers.

Decision Framework: Build vs Buy

Here's a practical framework for making this decision:

Calculate True Build Cost

Start with realistic estimates:

Development time: 3-6 months minimum for basic functionality
Team size: 2-3 engineers (minimum)
Fully-loaded cost: Engineer salary × 2.7
Annual maintenance: 20% of development cost (ongoing)
Infrastructure: Variable, but plan for high-availability costs

For a basic system with two engineers over six months, you're likely looking at $150,000-$200,000 initial investment, plus $30,000-$40,000 annually in maintenance, plus infrastructure.

Compare to Buy Costs

Commercial monitoring solutions typically cost:

Basic plans: $20-100/month
Professional plans: $100-500/month
Enterprise plans: $500-2,000+/month

Even at enterprise pricing, you're looking at $6,000-$24,000 annually compared to $180,000+ to build.

Ask the Right Questions

Is monitoring a competitive advantage for us? If not, why build it?
Do we have the expertise to build reliable monitoring infrastructure? If not, factor in learning costs and mistakes.
What's the opportunity cost of engineering time? Could those engineers be building features that generate revenue instead?
How will we handle maintenance and on-call? Who monitors the monitoring?
What happens when key team members leave? Can you maintain institutional knowledge?

The 90% Rule

If a commercial solution meets 90% of your requirements, buy it. That last 10% of customization rarely justifies the cost of building from scratch.

Most "unique requirements" are actually preferences, not requirements.

A Different Approach: Third-Party Service Monitoring

There's another monitoring category worth considering: tracking the status of services you depend on.

Most organizations rely on dozens of third-party services: cloud providers, payment processors, communication tools, identity providers. When AWS or Stripe or Okta has an outage, you need to know immediately, not when customers start complaining.

Building this type of monitoring from scratch means:

Writing integrations with thousands of vendor status pages
Parsing inconsistent status page formats
Handling status page changes and outages (status pages go down too)
Building aggregation and alerting logic
Maintaining all of the above as vendors change their infrastructure

This is precisely the kind of undifferentiated heavy lifting where buying makes overwhelming sense. Specialized tools like IsDown already track 5,400+ vendor status pages and can often detect outages 10-15 minutes before official vendor announcements through crowdsourced reports.

The Bottom Line

For most IT teams, the build vs buy decision isn't close.

Building makes sense when monitoring is your core competency, you have massive scale, and you have dedicated platform engineering resources.

Buying makes sense when you want to focus on your actual product, you need to move quickly, and you want proven reliability without the maintenance burden.

The best question to ask isn't "can we build this?" but "should we build this?" For monitoring infrastructure, the answer is usually no.

Summary: Build vs Buy Quick Reference

Build when:

Monitoring is your core business
You have 1,000+ employees with dedicated platform teams
Requirements are genuinely unique (rare)
You have specific compliance requirements that no vendor can meet

Buy when:

You're a startup or mid-sized company
You need visibility quickly
You want to focus engineering on core product
Maintenance overhead would distract from priorities
You want proven reliability and ongoing improvements

The math:

Building: $150,000-$200,000+ initial, $30,000-$40,000+ annual maintenance
Buying: $1,200-$24,000 annually for most use cases

For third-party service monitoring specifically, the economics favor buying even more strongly. The complexity of tracking thousands of vendor status pages and parsing their various formats is exactly the kind of problem where specialized tools deliver value far exceeding their cost.