[runako]

They won’t, because specialization is a key aspect of capitalism.

This is why companies outsource anything. Google, Inc. is big enough to own farms and ranches to grow the food eaten in its cafeterias. They could make trucks to transport that food. They could operate factories to make cutlery, etc. Why do they instead choose to pay layers of margins to layers of middlemen?

Absurd example? How about Apple? They outsource production of their chips, instead of capturing the margin they are currently gifting to their partners. Why?

Delta Airlines doesn’t operate oil fields or even refineries even though a major cost of their operations is jet fuel. Why?

Once you can reason through these very simple examples, you will understand why enterprises are unlikely to walk away from SaaS.

[codytruscott]

Delta owns and operates a refinery.

https://en.wikipedia.org/wiki/Trainer_Refinery

https://www.reuters.com/business/energy/delta-air-lines-refi...

[runako]

Sigh.

s/Delta/United/ or s/Delta/Southwest/ or s/Delta/Lufthansa/. Or if you prefer, s/refinery/oilfield, or s/refinery/pipeline. Or even s/refinery/farm/ because Delta also buys food in vast quantities (I would not be surprised to find they have interests in ag producers that offset a small % of their food purchases, which does not diminish the argument).

Delta also does not make airplanes, jet engines, seats, radios, GPS, glass, or even wires. They don't distill the spirits they serve on their flights. They don't own and operate a satellite Internet capability. They don't even make movies for in-flight entertainment.

The point is that Delta, like most successful firms, outsources key aspects of core service delivery.

The second article you linked says plainly that the refinery is an offset/hedge. QED Delta still outsources the vast majority of its fuel costs. (They could, for example, own large swathes of the Permian and do E&P as well. They choose to leave that to others.)

[Gormo]

Vertical integration has been a common practice in industry for 150 years. Yes, very few firms fully control their upstream supply chains, but very few conversely produce nothing but their core market offering in-house. Most companies are somewhere in between, doing some things in-house, and obtaining other things from vendors.

Most large firms have in-house software dev teams responsible for at least some portion of their development work. I know software engineers locally working, variously, at banks, pet supply distributors, power companies, soft drink bottlers, and many other non-tech industries. And AI can and will extend these teams' capacity to internally manager larger segments of their companies' tech stacks.

[duncangh]

Lmao I love this flavor of the ‘tism that always surfaces in hn comment threads exactly like this. Like moths to a flame