Hidden Software Development Costs that Crush Your Bottom Line

| February 6, 2018 | 0 Comments

Would you commit 19 developers to building software that was already available off the shelf? Especially if it would cost millions of dollars more to do it yourself?

Recently, I met with a company—a large healthcare organization—that did this. Following a demo of our XL Release and XL Deploy products, the Development Manager turned to me and said: “That’s good, but we’ve already built-it.” That struck me as a bit ambitious given all the work they have to do just to develop products for their own customers.

Software Development CostsSo after peeling back the onion a bit, we uncovered that they were using 19 developers to create builds and deployment scripts using Jenkins. Not only that, they also needed every single one of those 19 people for management and maintenance.

I did a rough calculation of about how much it cost them to do the job in-house:

19@ 100,000 (USD) FTE + 1@ 150,000 (USD) FTE = 2,050,000!

This is pretty simple math, but the grand total is over 2 million dollars—just to build the solutions. That’s serious money being spent to develop software that’s already available out of the box.

Software Development CostsIt’s also unnecessary. As I discussed with the Development Manager, our products automate deployment and pipeline orchestration so you don’t have to worry about building any of that. We also give you visibility so that, with your time freed up, you can focus on figuring out what’s not working and address real problems that are inhibiting your success. I explained that, if they were using our software, they could auto generate workflows.

They could plug in the tools they’re already using, which would let them continue to use the right tool for the right job. For example, they could continue to leverage Jenkins for what it’s great at—continuous integration. They could expend their energy on revenue-generating products for their customers. And they could scale the whole thing to meet growing customer demand without the blood sweat and tears that scripting entails.

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Unfortunately, like a page out of the Phoenix Project, the manager had lost focus on the company’s higher objectives, which is, of course, understandable when you’re busy overseeing a staff of 19 people. For managers, it may help to occasionally remind themselves of this fundamental rule:

DevOps = people + processes + tools for the purpose of serving customers

Software Development CostsIn fairness, this manager wanted the development team to be happy, but developers are happy when they’re building software. They are not happy maintaining it.

Lots of people think that using Jenkins, Puppet, Chef, and open source tools to build orchestration and deploy solutions makes it free, but really, it’s not. And this company, with the 2 million worth of software development they’re putting into it, is a perfect example of that. That figure, by the way, does not include the additional hundreds of thousands per year for ongoing maintenance. It also doesn’t include reporting, which the manager of the team told me was planned for phase II.

If I were a CIO, VP of Operations, or VP of Development, I would want to know how I can build my bottom line not crush it. If just 15 of those developers were freed up to develop more software that customers will pay for, I would make sure they didn’t get tied up doing unnecessary internal projects that flush hard-earned revenues down the drain. Wouldn’t you?

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Editors note: This post was first published by Xebialabs on November 17, 2016. It has been updated. 


Patrick Bishop

About the Author ()

As VP of Sales for XebiaLabs, Patrick offers a distinctive blend of sales savvy and technical know-how. His experience includes over 15 years driving enterprise software sales, plus a background in software engineering for the financial services and military sectors. He has worked extensively in DevOps and in the areas of SecurityOps, compliance, and privacy for Fortune 100 insurance and banking organizations. Patrick has long history of developing and launching start-ups and a track record of dramatically growing revenues from the ground up.