I don't want to minimise your experience, and clearly the vendor was not a good fit for you.
But the software didn't cost 25% because that's not how software works. Basically you now have a choice,
A) the project is done, so you can fire that new IT department.
B) the project is not done, so they can keep working (meaning your 25% will keep growing)
C) the project is done, but you keep the team for future development, so you give them other projects to do in the meantime.
And you just hope that you keep the team interested enough to stay around, so that in 5 years time when you have to make it work with TLS 1.4,or Windows 12,or the new Dropbox API, or whatever that there's still someone around to do it.
My point is that writing software is never done because it exists in a world that changes. And keeping programmers on salary to do that is expensive.
That said, yes, it can clearly still end up being cheaper than some Enterprise offerings I've seen.