Life of your ‘Off-The-Shelf’ Software investment

Posted by Jana Reddy in

 Technology Trends

Jun 30, 2011 | Total views: 150

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Jana Reddy
Program Director
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What is the life of your ‘Off-The-Shelf (OTS) solutions?’ Is it 3, 5, 10 or 20 years?

As the new use cases emerge in business, Off-The-Shelf products spring up to service the needs. Within few years it becomes nearly impractical for custom development of the commonly found use cases. Organizations looking for automation, in all likelihood will find OTS solutions that either fit or exceed their needs.

For organizations that are not in the business of software development, any change to computing systems is a costly effort, therefore it is important for these organizations to understand how long their investment is going to last. To understand the factors contributing to the burn rate of investment, let me take an example of Web Content Management Systems. Following are the observations made:

• Changing business needs necessitate organizations to revamp their sites/platforms once in every 5 years
• All product vendors in this space have gone through M & A at least once in the last 10 years or they are just about 10 years old.
• Most of the products have been re-architected at least once in 10 years
• On an average major revisions are released at least once in 2 years, each major revision incorporates at least 2 new trends
• Larger vendors have competing solutions in their portfolio, leading to possible end-of-life for some products

The effect of this is product vendors will push you to upgrade if you are two versions below the current version, so, on an average you can hold on till 3-4 years without an upgrade. Product re-architectures will mean painful migration, often requiring rewriting / re-implementing. Based on this, a WCM investment will need to be re-evaluated approximately every 4-6 years for an industry that is about 18-20 years old.

This observation can be applied to all the software solutions. In general, all software solutions have an expiry date on them and the only difference will be in the duration based on the maturity of business function. Following are the factors that contribute to longevity of the investment -

• Vendor stability
• Technologies used for building the solutions(Programming languages, Frame-works, accelerators, Operating System, Protocols)
• Skills availability (COBOL / PowerBuilder)
• Dynamic nature of business (Marketing applications will see more changes than Accounting applications)

Next time you are thinking of ROI, make sure you factor in the shelf life of your solution.