Should You Build, Buy, Host, Rent or Managed while addressing your underlying technology?
Few days back I picked up an interesting convesation with a CFO of Fortune 1000 company. His view was though software/application is classified as CAPEX, unlike building or office equipment software technology applications it doesn’t have any resale value as most of the application vendors debars customer to resell their software to third party. This mean the investment and risk involved with software/application technology has to be addressed much differently than other capital investment. Further application vendors can literally force you to upgrade after certain period with logic of keeping abreast with latest version and useful life of software. The upkeep cost associated with maintenance of software also has to be adequately planned to avoid high cost of downtime. On top of this, in spite of provisioning for all the costs the business has to still keep a watchful eye on actual hard dollars benefits which many times would seek further investments in terms of expert intervention to stay course on realizing elusive ROI.
This is where ‘Rent vs Managed’ option gets interesting. While there are no large upfront investment associated with both ‘Rent’ and ‘Managed’ model along with avoidance of technology obsolescence risk, the Managed option like Platform solution clearly would provide organizations a much assured business outcome and integrated deeply into the value chain with more responsibility on the service provider side and lesser risk on the customer side.
