Roll your own future
- 16 August, 2004 15:55
Now here's a real classic on the comeback trail: developing your own applications. Sounds so retro, doesn't it? The kind of thing startups do when the CEO doubles as the chief product engineer and surrounds himself with a cabal of graduates writing code. So what's going on when large pharmaceutical companies, insurers, hotel chains, health care providers and online powerhouses like travel firm Orbitz are found, in this day and age, productively rolling their own?
There are many good reasons why companies build their own applications rather than buying packaged software, which flies in the face of conventional wisdom that buying is better than building -- a belief assiduously promoted by software vendors of all sizes.
And no wonder. The lifeblood of so many software companies increasingly flows directly from their maintenance and support fees, which have risen to nosebleed levels of 18 to 25 percent annually to offset the economic drag of lower sales in recent years.
But it's not just the high cost of applications and their hefty annual fees that are driving development of homegrown applications. Ranking high as reasons for this approach are dissatisfaction with complacent vendors that don't respond quickly enough to user needs, and dismay over software suites overloaded with features and fiendish complexity. At Reinsurance Group of America, for example, a $US35 million global enterprise administration system that was developed in-house not only fuelled a competitive leap past the company's rivals but was also vastly preferable to the nightmare alternative of integrating more than a half-dozen commercial packages to provide similar capabilities.
Yet the greatest reason of all to roll your own is the ability to tailor IT to your business, to control the fate of applications too vital to trust to outside developers. It's about enabling a competitive edge that really does matter.
"Simple and inexpensive" are often the magic words associated with the best in-house application projects. We're hearing that mantra more often these days, particularly as open-source software carves inroads at the enterprise level.
The "buy vs build" debate will no doubt go on forever. But the combination of open-source software with sophisticated development tools and standardized Web services is dramatically changing the face of that argument. When companies go looking for technical creativity, innovation and a competitive edge, they won't be buying that off anybody's shelf but their own.
Maryfran Johnson is editor in chief of US Computerworld