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Cloud Computing Complicates the Build vs. Buy Debate

Cloud computing has shaken up the build vs. buy debate by introducing a third option: rent.

Until recently, IT leaders had two options when it came to incorporating new software: build...or buy.

The decision often boiled down to a few simple factors. Building software would allow for heightened customization, but take more time and effort, while buying would allow for easier implementation, but make a company reliant on the purchased software. Based on these advantages and disadvantages, companies in mature markets would typically buy prepackaged software, while companies in new markets would build their own.

Now that cloud computing has fully entered the mainstream, the conversation has become a bit more complicated. In the place of the binary build or buy decision, IT leaders now have a third option: rent.

Build vs. Buy vs. Rent

In many ways, cloud computing has bridged the gap between building and buying. Companies can outsource software components to the cloud, reducing time and labor much in the same way that purchasing software would. At the same time, they retain the ability to cancel service at any time, so companies don’t have to feel locked in with any one particular vendor.  

Cloud computing has the added benefit of scalability — companies can adjust their spend as their needs change, a clear advantage over buying. That being said, the ease and accuracy with which a company can adjust their cloud spend largely depends on the IT department’s staff and resources. 

There are other downsides to the cloud that may make some companies think twice before choosing to rent. First among these is that utilizing cloud-based software makes a company reliant on the vendor’s speed of updates. Building their own software means that companies can update or alter their software whenever they wish, so that companies with adequate resources can always stay one step ahead of the competition. On the other hand, renting forces the company into a more passive role — companies can’t implement new technology unless their software vendor does so. In the age of DevOps, these delays may dissuade some IT leaders from renting.

Choosing the Right Option

At the end of the day, building, buying, and renting all have their benefits and their downsides, and there is nothing forcing companies to choose only one path forward. IT leaders should evaluate their department’s staff, resources, and goals before making a decision as to which route is best.

For the time being, cloud computing hasn’t ended the build vs. buy debate — it has complicated it. Companies still need to research their individual needs before investing in new software. That being said, cloud-based software may be a perfect match for companies that have been less than impressed with traditional software offerings.

Whether you buy, build, or rent, learn to optimize your cloud capacity