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Modern tech leaders are building apps, not buying them

Mike Pehl, Managing Partner, Guidepost Growth Equity
Mike Pehl, Managing Partner, Guidepost Growth Equity

Mike Pehl, Managing Partner, Guidepost Growth Equity

The SaaS revolution has changed many things for CIOs and CTOs, but as the number of tools and platforms that are essential to daily business operations increases, one key consideration should be front and center: your interests and your vendors’ interests aren’t inherently aligned. The SaaS vendors you count on are ironically focused on getting you to parity with your competitors, rather than getting you ahead of them.

How is this possible? SaaS vendors are striving for increased market share and revenue, so they have to do what works for the greatest number of customers. For an individual enterprise, that means that the only reliable way a SaaS vendor will be able to tailor their solution to fit its precise needs is when everyone agrees that the very same feature is a priority. One top tier vendor only adds a new feature after 1,000 customers have asked for it by name.

So while SaaS vendors are trying to serve the largest addressable market, they aren’t optimizing for your company – they’re working towards the lowest common denominator, which leaves CIOs wanting. The biggest cost is the lost opportunity to differentiate.

This is why forward-looking companies are re-opening the “build vs. buy” question, and are looking to build custom software in areas where they have traditionally purchased packaged apps.

Building software in traditional ways can be very challenging – and the people, process and technology issues that many software teams have faced have been showstoppers. Can you find enough talented people, and make sure that their skills keep pace with the latest technologies? Are you able to embrace and implement the latest operating models of software teams, from devops to devsecops, and the evolving combination of tools that drive them? Are you ready to build and adapt a scalable and secure environment that matches up to the changing needs of your customer base?

We think addressing these questions is critical, and we’re investing in technologies that make it possible for the average enterprise with a lean IT team to build software with the real customization, control and quality that they need to compete.

Indeed, the most disruptive idea in software development today is that it doesn't require a long lead time or a huge team of highly experienced developers in order to build software that’s mission-critical. This idea is becoming more mainstream thanks to technologies that make building software easier – and these platforms are going to be a huge area of focus for tech leaders in the years to come.

Building apps in-house solves the customization issue CIOs face when buying SaaS, but traditional application development platforms often require an army of software developers CIOs can only dream of.

By automating security, scalability, and architecture, these platforms aren’t necessarily redesigning the development process, but rather making a complex problem manageable for any development team, regardless of their size. Without them, the “build versus buy” argument wouldn’t be worth having.

Application platforms, like OutSystems, enable the rapid development of enterprise-class systems in-house without huge engineering teams, but rather just a few savvy folks in IT working together with line-of-business teammates. This heightened collaboration between IT and line of business leaders dramatically reduces friction in the iterative process that results in so many in-house IT projects failing to finalize on time and at budget.

Why so many CIOs opt to buy instead of build is because so much of the “building” process would be slower, more expensive and less reliable, compliant and effective compared to out-the-box SaaS. Even when considering traditional app development vendors, those technologies require companies to collect a parts-bin of technologies, and then collect a wide range of developer skills to assemble them into a working architecture before anything can even be built.

Modern application development platforms though, take a different tack. These platforms arm companies with the ability to build the applications they need at the speed at which they need them - from the starting line, all the way through the journey, enabling the enterprise to evolve its software as needs change. That ability to adapt software is when software transforms from a solution into a differentiator.

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