“Use the right tool for the job” is a good motto for software sourcing. There are several options for software sourcing these days. In-house development, software packages, domestic outsourcing, offshore outsourcing, and application service providers (ASPs) are all possible sources for software applications. All have their place in a software sourcing strategy. But they are not all equally suited to all tasks. Industry experience shows that in-house development and purchased software packages are the pillars of software sourcing. The rest are niche solutions.
Results from my company’s latest survey, Strategic Trends in Information Technology, show that 50% of existing production applications were delivered by in-house development, 46% by purchased packages, 3% by domestic outsourcing, almost 1% by ASPs, and less than 1% by offshore outsourcing.
These results surprise many people who see them. All of the attention lavished on outsourcing and ASPs has given most people the impression that there has been a stampede to those sources. The reality is that the outsourcing and ASP markets continue to grow but their contribution to the total base of...
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