Part 3: What’s the differentiator? Understanding how to balance build vs. buy
The DevOps movement has spurred a lot of organizations to reevaluate their IT outsourcing strategies. But the reality is that there will be no cataclysmic shift of insourcing. Sure, there will be plenty stand-out case studies and successes among rapid first adopters in the swing away from massive outsourcing. But like all of the biggest sea changes in IT, things will happen gradually when we look across the industry.
“At the moment, it isn’t necessarily that enterprises are bringing development back in-house – instead what we’ve seen is that larger organizations attempt to adopt DevOps and stand up new teams for new applications in-house, rather than contracting those functions out as they might have done in the past,” says Dan Cornell, CTO of Denim Group. “So, over time the center of gravity will be shifting back toward in-house development. But that will take time.”
And that won’t even mean that over time DevOps will completely sound the death knell over outsourcing. Most experts believe it’ll always play a part in the IT ecosystem.
As Alex Henthorn-Iwane of QualiSystems says, he’s observed among customers that even when they bring a lot of functions back in house in order to support DevOps, these companies are still keeping major development processes outsourced. They’re just finding a way to fold them into new processes.
“So far, it would seem that the pieces of the puzzle that are insourced are the strategic glue pieces,” he says. “There is still a lot of dependence on outsourced, contracted or vendor-delivered services and technology in our customer base.”
In order to better fit outsourcing engagements into a DevOps-enabled enterprise, organizations will have to get smarter about how they construct their relationships with outside support. It’ll need to be done with flexibility top of mind, says Jeff Gallimore, founding partner at Excella Consulting.
“They’ll contemplate how that support will integrate with the rest of their staff and work with those who can and do collaborate with their staff. Contracts will be more flexible and accommodating of change,” he says. “That could mean smaller, lightweight, short-term contracts or contracts that provide simple, trust-based change mechanisms.”
It’ll also require organizations to think carefully about the balance between building, buying and outsourcing the technology that they’re delivering.
“A rule of thumb in IT is to insource the most valuable core competencies of the company,” says Andrew Storms, vice president of services for New Context, who explains that’s easier said than done.
The problem is that as the pendulum shifts to insourcing many people are “poorly assessing which software is the differentiator,” says Theo Schlossnagle, founder of Circonus. There’s a point at which it doesn’t make sense to build something, otherwise everyone would be building it all themselves instead of using off-the-shelf software. In his mind, the majority of IT effort today is spent integrating, not innovating.
“When you conflate integration with innovation you lose,” he says. “The goal should be to buy over build when possible, but innovate in-house precisely those things that are core to your business that can change how you compete in your market.”