In this article from the McKinsley Quarterly about opportunities in offshoring, I came across an interesting tidbit:
Some service providers in India are using cheap local labor to develop their own software instead of purchasing more expensive branded products from the global software giants. American Express, for instance, hired programmers to write software to reconcile accounts, and the software now reconciles over three-quarters of them, or more than half a million every day. The company, which paid only $5,000 to develop this solution, estimates that licensing more sophisticated database software would have cost several million dollars.The lesson? The shortest distance between two function points isn't always through Oracle...
AmEx paid a pittance to build the software they needed vs. buying a rather expensive vendor-backed solution. Many companies do the same today, all over the world. (I once participated on a project to write a native XML full-text database engine; why? no vendor had an adequate solution, and the fundemental techniques -- inverted indexes -- are decades old and quite well understood.)
Just another piece of the puzzle why proprietary software isn't always the best (or only) way to do it.
