Learning Objectives
By the end of this chapter, you will be able to:
- Describe the different methods of acquiring software.
- Explain the advantages and disadvantages of buying commercial off-the-shelf (COTS) software.
- Explain the advantages and disadvantages of developing custom software.
- Define open-source software.
How to Acquire Software
When an individual or an organization needs a new piece of software, they have several options for how to acquire it. The main choice is often referred to as the “build versus buy” decision.
1. Buy It: Commercial Off-the-Shelf (COTS)
This involves purchasing a pre-existing software product from a commercial vendor.
- Advantages:
- Lower Upfront Cost: Generally cheaper than building software from scratch.
- Faster to Implement: The software is already built and can be deployed quickly.
- Reliability: COTS software is used by many customers and has typically been well-tested.
- Disadvantages:
- May Not Fit Needs Perfectly: The software is designed for a general audience and may not have all the specific features an organization needs.
- Lack of Control: The organization is dependent on the vendor for updates, support, and future development.
- Examples: Microsoft Office, Adobe Photoshop, SAP ERP system.
2. Build It: Custom Development
This involves hiring a team of developers (either in-house or outsourced) to create a new software application from scratch, tailored to the organization’s exact specifications.
- Advantages:
- Perfect Fit: The software is designed to meet the precise needs of the organization.
- Control and Flexibility: The organization has complete control over the development process and can easily make changes in the future.
- Disadvantages:
- High Cost: Custom development is very expensive.
- Time-Consuming: It can take months or even years to develop a new application.
- High Risk: Custom software projects are complex and have a significant risk of failure.
3. Other Acquisition Methods
- Open-Source Software: This is software whose source code is made available for free, and anyone can use, modify, and distribute it. While the software itself is free, there may be costs associated with implementation, customization, and support.
- Examples: The Linux operating system, the Apache web server, the Firefox web browser.
- Software as a Service (SaaS): This is a subscription-based model where software is hosted by a vendor and accessed by users over the internet via a web browser. Instead of buying the software, you rent it.
- Examples: Salesforce, Google Workspace, Dropbox.
Summary
There are several ways to acquire software. The most common choice is the “build vs. buy” decision. Buying commercial off-the-shelf (COTS) software is faster and cheaper but may not be a perfect fit. Building custom software provides a perfect fit but is expensive and risky. Other popular models include using free open-source software and renting software through a subscription-based SaaS model.
Key Takeaways
- The “build vs. buy” decision is a key choice in software acquisition.
- COTS software is cheaper and faster but less flexible.
- Custom software is a perfect fit but expensive and risky.
- Open-source software is free to use, while SaaS is a subscription-based rental model.
Discussion Questions
- If you were a small business owner with a limited budget, which software acquisition method would you most likely choose? Why?
- What are the benefits of using open-source software?
- What is the difference between buying a copy of Microsoft Office and subscribing to Microsoft 365 (a SaaS product)?
