The popularity of such in-house operations has to do with the changing economics of technology. This once required armies of people, so spreading costs among many clients made sense. With falling prices of hardware and software, and more skilled workers around, a captive centre can pay for itself with just 50 employees, says Peter Bendor-Samuel of the Everest Group, a research firm.
Firms in industries from energy to entertainment are discovering the value of developing their own technology. Their pace of spending with the consultants has slowed (see chart 2).
This article appeared in the Business section of the print edition under the headline “In need of a software update”