Platform Engineering ROI: What it costs to build your own platform

The cost of building an internal developer platform can be staggering, with estimates reaching up to $7.5 million annually for a staff of 60 people. This figure rises to $37.5 million over five years, even before accounting for the cost of developing applications on top of the platform. Most companies that claim to be "just building it" are actually underestimating the true expense of their platform, as the full financial burden often falls under various cost centers labeled as "engineering."

Purchasing a commercial platform, on the other hand, typically involves staffing far fewer professionals to maintain the system. For example, a commercial platform might require only 16 operations staff per 6,500 developers, compared to the 60-person platform engineering organization required for a homegrown solution. This difference in staffing costs is crucial when evaluating the Return on Investment (ROI) between building and buying a platform.

Moreover, buying a commercial platform frees up internal resources to focus on developing applications rather than maintaining the underlying infrastructure. Instead of dedicating staff to building and continually updating the platform, organizations that purchase a solution can allocate their resources more efficiently, leading to higher productivity and faster time-to-market for new features.

However, the decision to build or buy a platform is often influenced by more than just financial considerations. Engineers tend to be driven by the allure of showcasing their technical prowess and securing promotions tied to the successful creation of a platform built on cutting-edge technologies, such as Kubernetes. This phenomenon, known as résumé-driven development, can lead to the selection of technologies that may not align with the organization's needs or future requirements.

Ultimately, the ROI comparison between building and buying a platform becomes clearer when accounting for the full financial picture, including hidden costs such as the platform maintenance burden and the velocity gap between the vendor's updates and the organization's own development efforts. In many cases, purchasing a commercial platform proves to be the more cost-effective and strategic choice, allowing companies to focus on innovation and delivering value to their customers.