Bespoke software outgunning off-the-shelf software
Sunday, March 27, 2016
Once upon a time, all software was made to order. Programmers were hired by organisations to code their applications line by line. Gradually, third parties entered the picture and a whole new industry evolved. Software vendors offered all manner of packaged software products that the world has been eagerly gobbling up.
According to Forrester Research, the enterprise software market grew 43% from $431 billion at the end of 2011 to $615 billion by the end of 2015. While that number is impressive, and is outpacing the general growth rate of 37% for the overall tech products and services market, there are clear indications that the long dominance of off-the-shelf software may be coming to an end.
Forrester called custom-built software by contractors the ‘breakout software category’ within its IT spending report, and with good reason. At the end of 2010, bespoke software spending amounted to $43 billion globally. At that time, that meant it was less than 10% of the software market as a whole. Over the following five years, however, custom development surged to $136 billion. In other words, it has gone from less than 10% to almost one third of the total software development field. The growth rate of 216% over five years is unmatched anywhere in IT spending.
Forrester analysts surmised why this turnaround is taking place. One obvious reason is that bespoke software is a much better fit for business needs. The days appear to be coming to an end when one point of sale system was supposed to fit every single retailer or one database was good enough for all local government agencies. Each organisation is unique. More and more have realised that instead of trying to adjust their processes and practices to fit off-the-shelf software, it’s best to tailor the application to the precise requirements of the business.
Another reason offered up by Forrester as to why bespoke software is outgunning off-the-shelf is that it provides a better opportunity for innovation. The success of the likes of Amazon, Google, Uber and eBay have served to popularise the notion that developing your own apps is an excellent way to grab market share, and differentiate your products and services. These giants may grab all the glory, but there are examples of bespoke success in just about every market segment.
One such example is Ballard Chalmers’ development of Capital Tracker, a custom-made business process management system for Ipes, a leading provider of outsourced services and fund administration to Private Equity in Europe. A case study for this project is available in full on our website here, but in summary Capital Tracker enables Ipes to automate the administration of Private Equity funds in a way that was not possible using the standard off-the-shelf products previously utilised. The standard packages were unable to provide all the required features, including major ones such as direct integration with all the major banks using SWIFT. Since its launch, new modules have been added to Capital Tracker including those for managing the Depository required by AIFMD (Alternative Investment Fund Managers Directive) and FATCA (Foreign Tax Compliance Act), both opening up completely new business opportunities.
And how about the fact that custom software is now a lot easier, faster and cheaper to produce than it has ever been? Not only are there far more developers around than there have ever been, but those developers have at their fingertips tools that enable them to roll out customised apps at a lightning pace. Whereas in the past, the wheel had to be reinvented during each bespoke software project, there are so many standardised building blocks today that risk of failure has shrunk.
These building blocks take many forms, including Microsoft’s recently acquired Xamarin Platform. Xamarin allows for the quick development of a single application for deployment to Windows, Android, and Apple devices; or client libraries such as AngularJS, ReactJS and Bootstrap. These allow for fast development of rich, powerful client-centric web applications that dynamically work on smart phones, tablets and PCs. Cloud-based hosting offers many standard services on tap, with no setup required including database servers and tools such as Microsoft Power BI for the easy creation of dashboards and charts.
If the current trajectory for custom development continues, the category will account for half of the total software market within a year or two. That seems certain due to the advent of agile development methodologies. Ballard Chalmers has helped many organisations by blending agile with the waterfall approach to tailor applications to any business need.
Currently, Ballard Chalmers is developing a survey and audit tool for a client that specialises in risk management fraud prevention and risk management products for global organisations. The client oversees in excess of $50bn of daily lending and the custom software will enable auditors to efficiently manage audits for new and existing invoice factoring customers. The tool supplements existing risk management software for the invoice factoring sector and as a result will expand the services the company offers.
When it comes to software, one size does not fit all: each business is different. Ballard Chalmers custom development builds with the business and its employees in mind. So whether it’s custom software development for cloud or on-premises, application modernisation or integrating online and offline systems, Ballard Chalmers has the deep expertise and experience to support your application development requirements. Contact us today for a free initial informal technical review with one of our experts.
By Drew Robb, Contributor
Drew Robb is a freelance editor and writer, specialising in the Information Technology sector.