Hosted Web services tweak the classic "buy or build" question for small and midsize businesses in need of software apps
You know the old application development dilemma: buy or build?
For small and midsize businesses, of course, the dominant modus operandi has long been to buy business applications -- especially CRM, ERP, productivity, and HR software --and then, as much as possible, avoid customizations.
Ryan Martens, founder and
CTO of Rally Software
Indeed, according to one study, small and midsize businesses now devote only 22 percent of their software budget to developing new software, and only one in five companies state a preference for undertaking any major application development at all. The survey of 711 North American and European small and midsize business executives, conducted by Cambridge, Mass.-based analyst firm Forrester Research, found that these companies spend more of their budget on buying new software licenses (33 percent), maintaining code or paying for existing licenses (27 percent), as well as paying software subscription fees (18 percent).
"Most SMBs look high and low for prepackaged offerings and develop custom solutions only when commercial solutions fail to meet their needs," says Carey Schwaber, the Forrester analyst who conducted the study. "The result is that less than half of all SMBs have any custom-developed applications."
Today, however, some small and midsize businesses aren't taking a buy or build approach at all, but rather choosing to stitch together Web Services modules to create new business applications. They're drawn by the potential for lower maintenance fees, the reduced potential of development failure, and simply getting required business applications up and running more quickly, often without the need for expensive developers. Indeed, with many Web Services tools, even business users who don't know their JavaScript from Perl can produce a working application, sporting a spiffy Ajax-esque front end, without ever writing a single line of code.
Call this approach subscribing and cobbling? "Some people call it Web 2.0, some call it mashups, some call it composite applications," notes Ryan Martens, founder and chief technology officer of Rally Software Development Corp., based in Boulder, Colo.
Regardless of nomenclature, the bottom line, he says, is that "you don't have to build so much of the application anymore." Rather, other companies (as examples, he mentions "Intuit, Google, Yahoo, Amazon, Salesforce, [and] Fedex") supply components to handle application logic, user interfaces, database integration, and so on, and maintain the online environment needed to run it all -- the so-called "platform in the sky." Users, then, can select desired modules, add data, and have themselves an application.
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