Make or Buy?

I’ve gotten thousands of e-mails about open-source in the last few years, but have saved only a handful. Here’s one of them I’d like to share with you.

Suppose it’s getting close to 6PM and you’re hungry. You have two options. Do you make dinner? Or do you buy it?

You face a make-buy decision. Here are two examples:

1. It’s 10PM. You’re on the way from the airport to the motel. The flight in had execrable food, so you’re hungry, but you doubt that room service will still be open by the time you arrive at the motel. [1] You see a Denny’s a few hundred roads ahead on the right. What do you do – make or buy?

My guess is that you will pull into the Denny’s parking lot and buy your dinner.

2. It’s late Saturday. You’ve been to the local Farmers Market earlier. [2] You bought lots of fresh vegetables, and perhaps even some pickles. [3] The weather was nice then but a driving rainstorm has since developed. You had planned to go out, but you hear on the radio that a nearby parkway is flooded. What do you do – make or buy?

My guess is that you’ll stay home and make dinner for yourself.

Here’s another. Suppose you want to enter a car in the Indy 500 race. Do you buy one from your local dealer or do you make one for yourself?

My guess is that you’ll make one for yourself. I visited the Indy 500 museum in mid-October, and almost all the cars were hand-built. Only a few production cars ever had any great success in the race, and they were heavily customized by the manufacturer’s mechanics to make them serious contenders.

Part of my job is to help people answer make-buy questions, but in the context of software, not dinner or racing cars (though both of the latter are of course much more fun).

Though thousands of e-mails on open-source have come my way in the last few years, I have saved only a handful. Here’s one of them, one that speaks directly to the “make-buy” question:

As far as your comment: “Reimplementing existing technology is a terribly inefficient use of our resources and skills. Have you discussed this issue in any meaningful way recently?” rest assured that I, and others, address this matter on a daily basis.

You should understand, however, that open source and other new development paradigms don’t seriously alter traditional legal/business analysis when considering whether or not to use someone elses’ intellectual property or to develop your own. Traditionally, responsible commercial organizations have either reimplemented existing technology or sought a license to the existing technology under terms and conditions that are acceptable to the organization’s business model. Open Source licenses may not have terms that are acceptable or even applicable to the business. In that instance, it may well be more efficient to reimplement the technology then to adopt a commercially unacceptable license. Each case needs to receive individual examination.

We’ll study make-buy issues in more detail in future posts.

Notes.

1. If the flight didn’t have execrable food then please place a collect call to Steve O’Grady. I’m sure he’ll accept the charges.

2. The example is not hypothetical. Pleasantville, NY, has both a great Farmer’s Market every Saturday morning that is open from 8AM until 2PM or so, as well as the part of the Saw Mill River Parkway that floods at even the hint of rain. The diner across the street is a great place for breakfast.

3. One of the great attractions of the Pleasantville market on Saturday is the “pickle lady” from NJ. The pickled mushrooms are delightful.

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2 Comments

  1. cabbey
    Posted November 22, 2006 at 10:17 | Permalink | Reply

    Was that quote your response, or the email you received? The context implies the later, the content the former.

  2. Posted November 22, 2006 at 22:13 | Permalink | Reply

    I was asked by Mr. C about a license issue. I suggested there were problems with the license. Mr. C appealed to be me and I forwarded the exchange to Mr. I. The text in italics is Mr. I’s response to Mr. C.

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