Software as a service industry report

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Custom software development is often considered expensive compared to off-the-shelf solutions or products. This can be true if one is speaking of typical challenges and typical solutions. However, it is not always true. In many cases, COTS software requires customization to correctly support the buyer’s operations. The cost and delay of COTS customization can even add up to the expense of developing custom software. Furthermore, the big software houses that release COTS products revamp their product very frequently. Thus a particular customization may need to be upgraded for compatibility every two to four years.

Given the cost of customization, such upgrades also turn out to be expensive, as a dedicated product release cycle will have to be earmarked for them. Finances – both cost and benefit: The upfront license cost for COTS products mean that a thorough cost-benefit analysis of the business case needs to be done. Supplier – In the case of COTS, is the supplier likely to remain in business long, and will there be adequate support and customisation available? Alternatively, will there be a realistic possibility of getting support and customisation from third parties? In the case of custom software, the software development may be outsourced or done in-house. If it is outsourced, the question is: is the supplier reputable, and do they have a good track record? Size of implementation: COTS comes with standardization of business processes and reporting.

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