Make or buy decisions are sometimes overruled for "strategic reasons".

In the 80's, IBM outsourced the OS and the microprocessor of the PC and lost control of this industry to the Wintel alliance. In the 90's, Dell grew to dominate as a PC manufacturer with a strategy defining outsourcing as a competitive advantage. The "make or buy" decision is a corollary of market failure when customer's economic benefit is positive against the purchase price but turns negative when transaction cost is added. It is usually …

…with web hosting. There may be a case here for co-equity ownership or similar strategic considerations. Finally, competitive knowledge, critical to current and future performance, is built in the helpdesk operations, the user applications and the distribution channels. YPSYS being a start-up company is poised to rely on outsourcing to maximize flexibility and leverage reputations. However, YPSYS is advised to make sure it keeps striving for leadership in helpdesk operations, user applications and actuarial expertise.