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this post was submitted on 11 May 2024
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If you are a small company then yes. But i would argue that for larger companies this doesn't hold true. If you have 200 employees you'll need an IT department either way. You need IT expertise either way. So having some people who know how to plan, implement and maintain physical hardware makes sense too.
There is a breaking point between economics of scale and the added efforts to coordinate between your company and the service provider plus paying that service providers overhead and profits.
If coordinating with service providers is hard for a firm, I would argue the cost effective answer isn't "let's do all this in house". Many big finance firms fall in this trap of thinking it's cheaper to build v buy, and that's how you get everyone building their own worse versions of everything. Whether your firm is good at the markets or kitchens or travel bookings, thinking you can efficiently in-source tech is a huge fallacy.
it is not about it being hard. It simply creates effort to coordinate. And this effort needs to be considered. If you do things externally that means there is two PMs to pay, you need QMs on both sides, you need two legal/contract teams, you need to pay someone in procurement and someone in sales...
I agree with you that doing software inhouse when there is good options on the market is usually not a good idea. But for infrastructure i don't see there to be as much of an efficiency loss. Especially as you very much need experts on how to set things up in a cloud environment and you better look carefully at how many resources you need to not overpay huge amounts.