Open Source OR Outsource

Rajesh Jain quotes InfoWorld CTO Chad Dickerson who says "commercial software has its place, but open source and hosted solutions now dominate." :

I'm finding the "open source or outsource" question at the center of my IT decision-making process these days. My team is still implementing scalable and flexible systems that I'm confident will serve the needs of our business for the foreseeable future, but I'm buying very little software these days. Custom-developed software built on reliable open source frameworks wins the day when the benefits of slick commercial software can't outweigh the licensing costs.

On the other hand, when done for the right reasons, outsourcing can save money and reduce unnecessary distractions for in-house IT teams. I have never been a fan of outsourcing as a dumping ground for IT problems, but outsourcing is becoming increasingly attractive in two particular scenarios. The first instance deals with outsourcing relatively generic functions that rely on widely used commercial software packages that require specific expertise and near-perfect uptime -- think hosted Microsoft Exchange or Lotus Notes. In these scenarios, it's difficult to run these systems noticeably better than an outsourcer.

The second, more interesting emerging scenario is the Web-based hosted service with a well-documented Web services API, an offering pioneered by Salesforce.com with their sforce platform. In this type of outsourcing arrangement, you get all the benefits of a core service without having to own software or hardware, but you retain the option to extend the system to address specific needs of your business. I think of this phenomenon as "open outsourcing" -- a service that sits outside of my datacenter with secure access to a rich API. Platforms such as sforce dispel the notion that outsourcing is about cramming a variety of square-pegged businesses into a single hosted round hole.