Know when to buy versus build with public cloud
Updated: May 22
Ever heard the phrase "Build what differentiates you from the competition, and buy what doesn't"? This generally rings true, but identifying competitive differentiators isn't always easy.
Just look at McDonalds. who focus on serving fast-food to their customers. They need a point-of-sale system (POS) to take payments, an industry-standard capability, so surely they should purchase an off-the-shelf solution.
But McDonalds came to realize that even their POS system can be a business differentiator, which could bring them operational and service benefits to set them apart from other fast-food chains. If they had relied on an off-the-shelf POS solution, they wouldn't have been able to deliver revolutionary omnichannel experiences ahead of the competition.
First you need to figure out what you should be building versus buying. But how does that apply to public cloud computing models?
Focusing on Value
As a technology leader, your job is to enable the business to deliver value quickly, at reasonable cost and with minimal risk, through technology.
To do this, we have to look at where the business value is, as it relates to the technology stack. That's where cloud computing comes in. The business value is in the applications and data that your teams use to get work done, or that your customers use to interact with your services.
To spend more time focusing on business value, you need to spend less time lower in the stack. And to do that, you need to be taking advantage of cloud computing. More layers managed by the vendor means more time to focus on the layers that matter - the data and applications that provide business value.
The further to the right you go, the less time and resources you spend managing the supporting components, resulting in more time available to focus on what really matters - adding business value.
For supporting technologies that won't give your organization a competitive edge, buying SaaS is likely a good decision - especially when internal resources are tight. SaaS offers less operational overhead than an on-premises deployment, as hardware procurement, management, and patching are taken care of by the vendor. It's also quicker to hire and train employees on industry-standard software such as HR Management systems, than on one you've developed from scratch.
But be careful - you may need to integrate SaaS technologies with other technologies to streamline business processes, share data across applications, or integrate with modern technology like Artificial Intelligence. Ensuring that you have access to your applications and data in a universally accepted format, for example through APIs, is a good practice. This way you get the benefits of focusing on value, while still making the data available to enrich other areas of your business.
What if you've identified a scenario where building something from the ground up can offer you a competitive edge? Then you have to turn to other models such as On-Premises, IaaS, or PaaS. Using the same principles as above, look to PaaS first. With less layers to manage, you can spend more time on delivering business value faster.
However, not all workloads are well-suited for PaaS. Take a close look at your requirements. Can a PaaS solution meet your requirements? If not, gradually move left in the cloud computing model, until you find a solution that can meet them.
This approach will offer the least management overhead that meets your non-functional requirements, getting you closer to focusing on delivering business value.
Buy V Build Overview
Deciding whether to buy or build comes down to a strategic decision for your business. Is the additional time and effort to build, manage and train people on a customized solution going to provide a good return on investment?
Once you have that decision, it probably makes the most sense to buy software in a SaaS model and look to PaaS first to build custom software.
This article was Part 7 of our “9 things C-Suite executives need to know about Public Cloud” series. Follow us for more Public Cloud strategic insights!
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