Build vs Buy and the Evolving Maturity of Open Source Software

“If I knew then what I know now” is a pretty common lament heard in the postmortem analysis of most in-house proprietary software development projects. I recently got to tackle the build vs buy debate while working on a turn around engagement with the software development subsidiary of a large Costa Rican tourism company. What I found was that business leaders were reasonably familiar with the risks and considerations of the old build vs buy paradigm, but they were not at all up to date on the tremendous impact of the current open source market on this important strategic IT decision.

Historically the build vs buy paradigm had some pretty severe considerations on both sides of the equation. Choosing the buy route brought about concerns about vendor lock-in, costs, lack of control and loss of competitive advantage. Going with the build in-house option had challenges associated with lack of skill, time to complete, costs and maintenance. Today, the evolving maturity and range of options in the open source software market is poised to make the old buy vs build debate almost moot. However small and mid-sized companies who do not have a high functioning internal IT department may still not know now what they need to know. The value characteristics of the evolving and maturing open source software market have impacted both sides of this equation in ways that completely change the considerations associated with the old paradigm.

 

Black Duck Software, an enterprise helping customers increase their strategic use of open source software, and North Bridge Venture Partners, a seed, early stage and growth oriented investment firm with a sector focused on open source and cloud computing, released their seventh annual Future of Open Source Software Survey in April of this year (2013). Michael J. Skok, general partner at North Bridge Venture Partners said in presenting the results, “It’s been recognized that software is eating the world. Our seventh annual Future of Open Source survey points to the fact that open source is eating the software world.” According to Black Duck and North Bridge, the survey results reveal the cultural impact of open source software and its influence on everything from innovation, to collaboration among competitors, to hiring practices, is revolutionizing the way organizations work and do business. Skok goes on to say, “This year’s results signal a shift in reasons why open source is chosen over proprietary alternatives. Increasingly, enterprises see it as leading innovation, delivering higher quality and driving growth rather than being just a free or low-cost alternative. Going forward, as broader adoption creates a virtuous cycle of innovation and investment, we can expect more disruption from open source, new business models and many more exciting new projects and companies.”

 

So what are the key characteristics of open source technology that are changing the old build vs buy equation? The availability of high quality open source platforms has evolved to level that organizations of any size should be considering ways to leverage such offerings in their software strategies.  The drivers behind the adoption of open source are quality, cost savings, avoiding vendor lock-in, increased financial stability of open source projects, transparency, security and burgeoning ecosystems for support and extensibility.

 

Below is a slide from OpenLogic, a major provider of open source software support and management services, that shows the evolution of some of the key maturity characteristics of the open source marketplace.

 

For companies roadmapping future software system plans the new decision matrix should consist of open source, commercial off the shelf or proprietary in-house, recognizing that in many ways, open source is a hybrid of the latter two alternatives. Under the old build vs buy paradigm most advisors recommended starting with a preference for buy with the decision to build arising most often as a fall back option when nothing in the commercial software market could meet the needs of the company or when it was perceived that building in-house would produce substantial competitive advantage. Given the risk and cost considerations of the marketplace five years ago this advice made sense. Today however companies can often have the best of both worlds and should look first at open source solutions. For a taste of what’s currently available in the open source market I recommend taking a look at InfoWorld’s 2012 BOSSIES award list.

 

The architecture and extensibility of most of today’s open source platforms provide users plenty of opportunity to customize solutions to achieve competitive advantage. The community oriented development model associated with open source solutions provides transparency and a tendency toward increased security. The community oriented development model also leads to a dynamic resource of available development talent and add-on enhancements. All things considered, a strong case can be made for putting open source as the first option for consideration for new development projects. The Black Duck-North Bridge survey shows that adoption of open source software has surged in the government, medical, energy and automotive sectors – indicating that more sophisticated IT users have recognized the value of open source and developed adoption, and management processes for deployment within their organizations. However unlike earlier eras where small and new businesses led the adoption of new technology, open source adoption has been led by larger enterprises with deeper technology expertise in-house. Smaller businesses will do well to familiarize themselves with the business case for open source and seek out vendors who offer demonstrated strength in deploying open source solutions.