Open APIs are just as important as open source when customizing off-the-shelf applications Forrester’s Jeffrey Hammond recently posted interesting data on custom software spending based on a survey of 1,138 IT professionals in North America and Europe in Q4 2009.According to Forrester, companies will spend, on average, 27 percent of their software budget on custom software development. An additional 35 percent will go to packaged applications, while the remaining 37 percent will be spent on platform and infrastructure software.[ Stay up to speed with the open source community with InfoWorld’s Technology: Open Source newsletter. ] Keep in mind that this data is specifically focused on software budgets, not personnel costs or hardware. The 27 percent mentioned above covers such purchases as application servers, IDEs, design and modeling tools, or testing tools. In essence, companies will spend, on average, 27 percent of their software budget to purchase programs that will enable their developers to build custom applications or customize packaged applications.Predictably, industry-specific applications tops the list for customization, but information and knowledge management, CRM, finance and accounting, order management, and ERP applications follow closely behind. Hammond explains the findings:It may seem a bit surprising that CRM is the third place category when it comes to custom development – after all CRM is a solved problem with packaged app options like SalesForce and Siebel – right? Well, not necessarily – as firms double down on keeping their existing customers and finding new ones they are investing in a larger concept of customer relationship management, including enhanced self service, improved user experiences, and customer-centric integration of the systems that run their businesses – that’s pretty hard to buy out of the box.I agree that packaged software often has its limitations versus custom software. However, there is no reason that capabilities delivering, for instance, enhanced self-service or customer-centric integration could not be layered onto a packaged application. The build-vs.-buy discussion suggests a binary choice. The reality is customers do both: They buy packaged applications and build extensions, as well as tailor the packaged application to their needs. This points to the importance of tailorable and extensible software building blocks.It could be suggested that source code availability delivers a more tailorable and extensible application starting point than closed source products can provide. However, open and extensible APIs have a significant role to play in allowing developers to take a piece of software, open source or not, and use it as the basis for an application that their business or customer requires.Follow me on Twitter: SavioRodrigues. p.s.: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”This story, “Packaged vs. custom software: Having it both ways,” was originally published at InfoWorld.com. Follow the latest news in open source and software development at InfoWorld.com. Technology Industry