Michael Schrage has an interesting article claiming that recent productivity gains might make outsourcing obsolete. Of particular interest is this quote showing the productivity gain in producing software after the open source revolution:

“So when Brondmo told me his software, called Plum, was the first time he’d done serious coding in over a decade, I was taken aback. “I couldn’t believe how much things have changed,” he confided. “When my development teams wrote code 10 years ago, it took us three days to find and kill a bug. Today, it takes us only three hours.”

What’s more, he continued, whenever his (geographically distributed) development team runs into trouble, they can usually instant message their way into a just-in-time partnership that simultaneously solves the problem while alerting everyone to potential conflicts. “We do better real-time collaborative development and review now remotely then we did back at MIT when we were all in the same building,” he notes.

Brondmo’s favorite development discovery occurred when he was stuck for a few lines of code. He realized that by Googling he could see if anyone anywhere had posted something he could use. He and his team found quite a few virtual solutions this way. “But what about context?” I asked. After all, not everyone documents their C++ in English. He dismissively waved his hand: “Code is code. I found something that looked like what I needed in the middle of what looked like a bunch of Chinese. You paste it in and see what happens. It worked.”

The ultimate result? He’s never done a startup where the software development has been better, faster or cheaper. “In the past, I’ve had to raise lots of money to support the burn rate and the licenses necessary to develop real software over a couple of years; the costs are huge,” he said. “You had to deal with the venture capitalists. They had the money.

“Development cost is still significant, but it’s now focused on value creation, not infrastructure development,” he added. “Open source and the availability of tools reduce our infrastructure cost. We don’t have to pay for expensive software licenses and engineers to implement ‘commodity’ functions. So more money can be focused on innovation, not plumbing. We do more features faster. Development isn’t really an obstacle.”

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