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*navel. Looking at one's own stomach, an internally-focused meditation. Nothing to do with the sea :) But yes, it does seem rather obvious. However, I do th

*navel. Looking at one's own stomach, an internally-focused meditation. Nothing to do with the sea :) But yes, it does seem rather obvious. However, I do think it's illuminating in that this business practice is really only relevant to big companies. It's more effective the bigger you are. If you can have a team of a dozen programmers, testers, and sysops engineers employed full-time to make 10,000 other people more effective, your company will be more efficient than mine. A small business will be much better off spending a couple hours creating a website on Squarespace and calling it good, because the ROI just is not there. Software scales, and this makes big companies bigger.

perl4ever 8y ago
"Software scales, and this makes big companies bigger." This seems less obvious the more I think about it. You are saying proprietary home grown software scales. You can just as well say software provided by external sources scales, which is why you don't need a big company with a lot of employees. If you can argue it both ways, then the real question is what tips the balance? Maybe we just have a bimodal ecosystem where the big get bigger and the small get more numerous.
- jacobr1 8y ago
  Exactly. The real secret is distribution. Software makes building new products easier. But scaling them to the full market is as hard as its ever been and competition and noise gets worse as it becomes easier for new entrants. So firms with a durable mechanism to scale, or platform to push new products can maintain or grow in market provided they leverage their distribution to build or buy enough products to keep their distribution engine running.
- didibus 8y ago
  I believe the truth is that it is as hard to integrate an existing software solution as it is to build an integrated software solution from scratch. The latter will also be much more focused to your specific business needs, and will be able to evolve along side your business.
  - ethbro 8y ago
    The biggest loss I've seen in buying software (and I've been in large companies that have gone both ways) is agility. If you're using a vendor solution w/o source rights, and you need a new feature to pursue a new opportunity... you can't. Best case, the vendor is persuaded they can make money from it, develops it, and offers it to all their other customers. Middle case, they charge you an arm and a leg for custom functionality (more than it actually costs to develop), and now you're off the main tree. Worst case, they ignore you or refuse. So the primary benefit to owning your own software development is the ability to pivot to new opportunities. E.g. You think AWS would exist if Amazon had outsourced their server management software?

perl4ever 8y ago

"Software scales, and this makes big companies bigger." This seems less obvious the more I think about it. You are saying proprietary home grown software scales. You can just as well say software provided by external sources scales, which is why you don't need a big company with a lot of employees. If you can argue it both ways, then the real question is what tips the balance? Maybe we just have a bimodal ecosystem where the big get bigger and the small get more numerous.

jacobr1 8y ago
Exactly. The real secret is distribution. Software makes building new products easier. But scaling them to the full market is as hard as its ever been and competition and noise gets worse as it becomes easier for new entrants. So firms with a durable mechanism to scale, or platform to push new products can maintain or grow in market provided they leverage their distribution to build or buy enough products to keep their distribution engine running.
didibus 8y ago
I believe the truth is that it is as hard to integrate an existing software solution as it is to build an integrated software solution from scratch. The latter will also be much more focused to your specific business needs, and will be able to evolve along side your business.
- ethbro 8y ago
  The biggest loss I've seen in buying software (and I've been in large companies that have gone both ways) is agility. If you're using a vendor solution w/o source rights, and you need a new feature to pursue a new opportunity... you can't. Best case, the vendor is persuaded they can make money from it, develops it, and offers it to all their other customers. Middle case, they charge you an arm and a leg for custom functionality (more than it actually costs to develop), and now you're off the main tree. Worst case, they ignore you or refuse. So the primary benefit to owning your own software development is the ability to pivot to new opportunities. E.g. You think AWS would exist if Amazon had outsourced their server management software?