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There's an interesting discussion buried here for business and the connection to the "not invented here syndrome". It seems to be a very careful balancing act t
by bane 10y ago
There's an interesting discussion buried here for business and the connection to the "not invented here syndrome". It seems to be a very careful balancing act to decide where to draw the boundary lines of your business vs. sourcing needed items externally.
For example, many people are surprised to find out how little of a car is actually built from scratch by an automobile manufacturer. e.g. the chairs you sit in while driving around are probably built and supplied by an entirely different company you've never heard of! The head unit, but another, the brakes another and so on. How much of a Ford is actually "Ford"?
Car manufacturers seem to have figured this out pretty well over decades and decades, but then we're very inclined to also see the benefits of tight vertical integration. After all, if you buy your rubber from a rubber supplier, aren't you de facto already paying for their company town overhead expenses, transportation, processing and a little profit on top? If you do it yourself, you can eliminate the profit payout, and maybe even optimize some of the production overhead even more!
Apple is a great example, screens, memory, disks, GPUs, batteries and CPUs are all sourced from elsewhere. Apple basically just designs the package and does final assembly of the components. Yet recently Apple has started to get into CPU design. Why?
I think the analysis of this decision would be fascinating to see.
For most of us, in software, we have similar decisions to make with respect to using external libraries, buying services from external vendors and so on. Why buy compute resources from Amazon when you can just build what you need cheaper? Heck, why stop there, why isn't your company writing their own operating system or their own Hard Drives?
There's lots of companies that make the wrong decision early on and end up buried one way or the other later on and it takes heroics to unbury from that decision if at all.
- j_koreth 10y ago> Yet recently Apple has started to get into CPU design. Why? I think the analysis of this decision would be fascinating to see. Oddly enough why would Apple have left it through dumping PowerPC then if it's just going to repeat this cycle
- mannykannot 10y agoI have seen it said of the DC10 that McDonnell Douglas ended up outsourcing all the profit while retaining the risk.