When I founded Dealtree.com back in 1999, it was not long before I faced a critical decision: do I build a software platform from scratch or, continue using the same off-the-shelf software my competitors used.

Off-the-shelf software is downloadable or pre-packaged and ready to use, but often requires the business to adapt their operational needs to fit the software’s capabilities. Open source software is similar to off the shelf, created and maintained by a community of developers, and is often free or cheaper option than custom software.  Open-source can be just like custom software, except you might not be able to own your customizations depending on the licensing rules. Custom software is built specifically for a business’s needs and can be tailored to fit their unique operations, but if you do not have in house expertise, it could be very expensive. By by early 2000, I had learned that using an off-the-shelf solution meant our team would have to design the business to fit the software rather than the other way around. If you can run your company with an off the shelf system, then your competitors can use the same system and compete with you. What’s the value in that? While open source software may seem like an attractive option due to its low cost, businesses should consider the long-term drawbacks of choosing this option. These include a lack of dedicated support, limited customization options, potential security vulnerabilities, and potential usability issues. Ultimately, businesses should weigh the pros and cons of each option before making a decision that best suits their needs and goals. In recent years, there has been a surge in the popularity of open source software systems. This is largely due to the fact that open source software is often free or much cheaper than proprietary software. However, many businesses fail to consider the long-term pitfalls of choosing open source software over off-the-shelf or custom systems. One of the biggest long-term pitfalls of open source software is the lack of support. While open source software has a large community of developers, it doesn’t have a dedicated support team to assist with any issues that may arise. This means that if something goes wrong with the software, businesses may struggle to find a solution on their own. This can result in significant downtime and lost productivity. Another long-term pitfall of open source software is the lack of customization options. While open source software is often customizable, it requires a significant amount of technical expertise to do so. This means that businesses may be limited in their ability to tailor the software to their specific needs. This can result in inefficiencies and reduced productivity, as employees may need to work around the limitations of the software. Additionally, open source software is often not be as secure as proprietary software. This is because open source software is developed by a community of developers, rather than a dedicated team of security experts. While the community of developers may identify and patch security vulnerabilities, they may not do so as quickly or effectively as a dedicated security team.

Open Source is made for technical experts not users.

Finally, open source software is most often not be as user-friendly as custom, proprietary software. This is because open source software is often developed by technical experts, rather than user experience designers. This can result in a steep learning curve for employees who are unfamiliar with the software, which can lead to reduced productivity and frustration. Open source is never free. It is simply the “pay me later” option. While open source software may seem like an attractive option due to its low cost, businesses need to carefully consider the long-term pitfalls of choosing open source software over off-the-shelf or custom systems. These include a lack of support, limited customization options, security concerns, and potential usability issues. Ultimately, businesses need to weigh the pros and cons of each option and choose the one that best fits their specific needs and goals.

If you can run your company with an off-the-shelf system, then your competitors can use the same system and compete with you. What’s the value in that?

At Dealtree, we ended up developing a completely from scratch enterprise system using Adobe Coldfusion to build the application and MS-SQL Server for the databases, and we use no open source or 3rd-party add-ons. The system grew with the company. This choice ultimately proved to be much more effective allowing us to develop new services and functionality within weeksn rather than year. That nimbleness of our systems added massive enterprise value and contributed to the company’s valuation when Dealtree was acquired by Best Buy back in 2008. While developing your own systems has its challenges and costs, I’m glad we chose to build a custom system instead of using open source or off-the-shelf solitions available at the time.