To Buy or Not To Buy - Part 1

Part 1 - Why build or why buy?

Over the past 2 decades of building many large systems, I have been part of teams where we have had to take a decision on the implementation approach of a system or small part of a system. 

“Should we build this system or just buy what is available in the market and integrate into our existing architecture?”

This question is neither simple nor straight forward. Each of the  choices has its own pros and cons and I am sure you all know that there is no one straight answer that is applicable for all situations.

Pros of Build over Buy

Build	Buy
Better Control over the functionality	Limited by what the solution can offer
Fully customized to the needs of the clients	Features are limited by what the solution currently has
Timelines of delivery are in control of the team implementing it	The timeline of the new features are completely dependent on the product partner
Complete control on the code and hence there is no dependency on any external parties	The future of the product is always influenced by the business interest of the product company. Any mergers or acquisitions might impact the future of the product
Creation of intellectual property that is potentially monetizable for the organization through patents and offering the product for third party use.	Any money spent on licenses or fees becomes an expense for the organization and can sometimes increase with the increase in usage and sometimes become unviable to use beyond a certain scale.

Cons of Build over Buy

Build	Buy
Taking time to build means having the business wait until the product becomes available for use	Faster time to market as the product is available, tested, being used by many other organizations. Business can benefit from the expertise and experience of the product
Building a solution is capital intensive. It takes  time, money and expertise to build a technology solution	Product companies licensing model and SAAS offerings offer pricing structure that is affordable and spend is spread over the period of usage providing move levers to manage capital.
Building a robust technology solution requires deep expertise in both technology and domain of the business problem. Not having either of that  can adversely impact the success of the outcome, causing significant risk to business and growth of the organization	Product organizations are vested in the success of the product. These organizations will hire deep experts .  Hence it is in the best interest of the product organization to ensure the product meets the necessary functional and non functional requirements.
Based on the size and scope of the solutions, sometimes the solutions can take several months or even years to build the solution.  Organizations might experience fatigue from building and running the solution . Attrition from the teams can have severe impacts on the future of the product.	Product companies have a need to grow their top and bottom lines.  Hence, the future of the product is the future of the company. Significant investments will be continuously made to keep the product up to the current needs of the market.

As you can see, we can have very strong arguments on either side of the choices and they all are valid. But, as executives, architects, product managers we are confronted with this decision of building or buying the next big technology priority for the organization.

In this multi-part conversation, I am hoping to have a conversation and share my experiences and learn from you as well about “To buy or not to buy?”

What are some of the factors that you have considered while making the build vs buy decision?