Software buying red flags

Software buying red flags

Businesses are buying more software than ever. I don't think we need to link a reference to back up that statement in 2024.

Buying software is not easy. The process is often similar to hiring - if you're lucky you start with a recommendation, then a demo or interview, then sooner rather than later you have to commit to a very expensive decision. The market now is not far from being as flooded as the candidate market, and unfortunately there is also a lot of rough between the diamonds. Once you've committed, if anything a bad software purchase can be harder to get out of later on than a bad hiring decision.

A lot of the "green flags" are fairly obvious - for example you saw in the demo or trial that it clearly does the thing you're buying it for. You had a recommendation from a trusted source. The sales rep clearly understands the software and their customers, and is helpful and responsive.

The most obvious "red flags" are just the inverse of those green flags, but we wanted to share with you some of the red flags we've identified as developers ourselves, as technical consultants, and of course buying software for ourselves.

No API, or a limited API

In the simplest possible terms, an API allows you to connect the software to other software, and even extend its functionality later on.

Not having an API is the biggest possible red flag we look for as technical consultants. We come across this all the time with customers and prospects who want to start automating processes but find out the software they have previously bought does not support this. Software that has no API will fundamentally prevent you from modernising.

What concerns us the most about software that does not have an API is the potential reasons why. Modern software is designed around APIs so the case is either a) the software is so old that introducing an API would be difficult to impossible, which is very concerning - more on that later, or b) the vendor has chosen for commercial reasons not to offer an API. This is not a good sign.

It's fairly easy for a non-technical buyer to find out whether a software package has an API or not, it's a yes or no question for the vendor. What's more difficult is establishing whether an API is actually useful. The best software has APIs that let you do everything you can do in the user interface (UI). Some APIs only let you automate a tiny subset of tasks, and these are ultimately as useless as no API at all. Your go to technical consultant or IT MSP should be able to tell you whether an API is functional or not, even if they don't necessarily build integrations themselves. We are also happy to offer a free API review for any software you'd considering buying, as this helps us build our glossary of "software vendors to avoid".

Confusing pricing

We don't feel there's anything wrong with "call for a quote" pricing. Genuinely good software rarely comes cheap and sometimes overly public pricing models risk becoming a race to the bottom. The problem is when you call and you can't get a straight answer on price. Even if you're not going to pay full price in the first year, you should be able to get a full breakdown of all potential future costs from a software vendor right at the start.

A particular red flag for us is module-based pricing. A really good piece of software will let you find and use new features as you grow within it. It's always great when you find out the answer to "I wonder if it can do this?" is yes. With module-based pricing it's likely that every helpful new feature you might find will have a previously hidden price attached to it. 

Over the next few years pricing models will probably get a bit more complex. User based pricing has been king for a long time but with API automation businesses can do more with less users and software developers do need to account for that. More products will likely start to charge on a transactional basis or other metrics such as "number of product locations" in your inventory management software. From our perspective the important thing is this is kept transparent and it's clear when costs may increase in the future. We don't have a problem with "complex" pricing, only when it gets confusing.

No product roadmap

In reality, most software vendors don't have a detailed 12 month product roadmap. New features are often driven on a much shorter turnaround by customer demand, and some features can be very difficult to predict timelines for. Software development is not easy.

However a software vendor should be able to give you a clear indication of what they have on the "backlog", what they're working on right now, and what new features they released in the last 12 months. If they can't it's likely they are not keeping their software up to date and probably don't have a strong engineering team who can deliver quality product.

A dated look

This is potentially controversial, but if it looks like it was written for Windows 98, it probably was, and it probably hasn't been updated much since. The effort that goes into the user interface ("UI") is a good barometer for how seriously a software vendor takes its' product, and the competence of their technical leadership. UI updates shouldn't be too frequent to avoid confusing users, but a continuous effort to keep up with modern design standards is a great sign for any software package.

If you're reading this from a completely non-technical perspective you might still be wondering why this matters. There are three key reasons beyond a general feeling for the attitude of the software vendor behind the product. The first is security - if software is not being routinely kept up to date by competent developers, it is far more likely to contain security flaws that more modern applications do not have. The second is flexibility - older software architectures make it harder to add new features as the market changes, or adapt software to individual customer needs. The third is reliability - if the vendor doesn't take UI seriously, there's a good change they don't take bugs seriously either.

This isn't black and white across all industries. Some scientific software hasn't had a UI refresh in decades yet is still kept up to date. This could also be interpreted as a sleek, modern, user friendly UI being a green flag.

No customisability

The simple ability to add a custom field that captures some information unique to your business is something we should expect in 2024. 20 years ago this was hard to do as most software was built on very rigid SQL tables. Modern databases are much more flexible and make it far easier for developers to offer custom fields, forms, dashboards and even entirely custom tables. Not every product needs to be a no-code platform like Airtable or Salesforce, but offering basic customisability is, for us, a must in today's dynamic business world.

APIs can be an extension of and in some cases a replacement for this kind of built-in customisability. We can't stress enough how important it is for any software you buy going forward to have a rich, complete API. You may not need bespoke integration and automation right now, but you might next year, or the year after. If you have become embedded in software that does not offer APIs, you risk closing the door on introducing automation into your business.

In conclusion

In case you missed it earlier in the article, we are happy to review a product API for free. From the documentation alone we will be able to tell you whether an API is "complete" and allows you to do everything your users do automatically, and API documentation in itself can offer an insight into the fundamental quality of a software application.

If you want wider support in selecting the right software, we can help with that too. At Ferrio we are tightly focused on the business application of software and have helped several of our customers find the right software at the right time. We don't enter exclusive referral contracts with software vendors and will always research and recommend on a case by case basis. We're not a Sage reseller who can contractually only recommend Sage products (which frequently throw up several of these red flags).

If you're considering buying software, whether to replace an existing system or to meet a new need, just contact us via the form at Our team are always available to chat and offer free advice. We just love solving problems with simple, quality tech.