Recently, I wrote an article advising companies not to host their own video. There was some pushback on it from some techies that understood the ins and outs of video hosting. They had some good points, but video requires an audience, and many of the hosted platforms provide just that. So the combination of the cost of bandwidth, complexity of screen size and connectivity, in addition to the audience availability were my primary reasons.
That doesn’t mean I don’t believe companies shouldn’t take a longer look at building their solution. In the case of video, for example, many large companies have integrated their video strategy with digital asset management systems. Makes perfect sense!
A decade ago when computing power was extremely expensive, bandwidth was costly, and development had to be done from scratch, it would have been nothing short of suicide for a company to attempt to build its marketing solution. The Software as a Service providers spent billions in the industry to develop platforms that could be utilized by most of us – so why would you make that investment? There was no return on it and you’d be lucky if you ever got it off the ground.
Fast forward to today, though, and computing power and bandwidth are plentiful. And development need not be done from scratch. There are powerful rapid development platforms, big data database platforms, and reporting engines that make getting a product up inexpensive and quick. Not to mention the vast number of inexpensive API (application programming interface) providers out on the market. A single developer can wire up a platform with a canned administrative interface and connect to an API in a matter of minutes.
For these reasons, we’ve reversed our stance in many cases. A couple of examples that I’d love to share:
- SEO Data Miner – we have a very large publisher who is tracking upwards of half a million keywords that need to be tracked geographically, by brand, and by topic. All of the providers out there that would deal with this are in the high five digits for licensing – and none of them can handle the volume of the data that they have. As well, they have a unique site structure and business model that doesn’t fit into the canned platform. So, for the price of the license in the other software, we’ve been able to produce a platform that’s specific to their business model. Every investment they make isn’t an investment in a license they’ll walk away from – it’s enhancing their platform and making it much more efficient internal. They’re saving valuable analysis and processing time by us building the platform for them.
- Agent Sauce – developed over the last decade by my friend, Adam, the Agent Sauce platform is a complete collection of modules – from web, print, email, mobile, search, social and even video. Adam used to utilize email services and had a difficult time working around their system constraints, so he built his own instead! He also powers his platform with many APIs, providing a very affordable solution that would be hundreds or thousands of dollars in any other industry. Agent Sauce now sends millions of emails and tens of thousands of text messages for pennies on the dollar. Adam has been able to pass those savings directly to his clients.
These are just a couple examples where, instead of licensing a standard platform with extreme limitations, these two solutions were built in the cloud, around very robust APIs. The user interfaces were customized specific to the application and the user, and the processes were developed to ensure the users could do everything without a ton of time spent massaging data or working around platform issues.
Those efficiencies are where the savings are for companies. You may want to look into this as you analyze your budget for 2015. Where are your largest licensing costs? How much money does it cost you to work around the limitations of those platforms? What kind of cost savings and efficiencies would your company realize if the platform was built to suit your needs rather than an entire market segment? If you spent the cost of licensing in development each year, how quickly could you have a platform that was custom and better than the market solutions?
This is the time to start deciding whether or not you’re going to continue buying someone else’s solution, or build the masterpiece you know you could step on the gas with!