The ten commandments of software procurement

For a medium to large scale organisation with its own IT department, I have found in today's market the following truths for software procurement apply. Yet they are usually poorly understood by staff in organisations outside the software sector. Who often view the world through antique pre1990 glasses, before the significant impact of  web based providers, and the mixed economy of revenue models of  modern software companies ...

1. Software is like any other creative output, it differs radically in quality, modernity and appropriateness - and this is entirely unrelated to its cost. Partly because the majority of today's leading software development companies are internet companies who do not use software charging for revenue. 
2. So whether or not software is charged for directly via a licensing model is unrelated to whether it is mostly open source or closed source / commercial. Some software is no longer purchasable or the paid for solutions are too poor quality to be viable, compared to the free ones. In such cases other non-financial trading decisions must be part of the procurement arsenal. So policies on data release, etc.
3. Whether something is open or closed source is entirely irrelevant to its quality, scalability or any other attribute you care to name. These days any software stack is likely to be a mix of both.
   However given source, tests, community and commit rate can all be checked for the former, it is far easier not to pick a lemon, with open source (not that a non-technical organisation tends to use any of these core indicators for procurement assessment).
4. Software is basically like literature - there are your Barbara Cartland's and your Shakespeare's - unfortunately less people are able to read it to work out what quality it is, so its a book which is generally just judged by its cover - hence the common misconception that software is all roughly the same - or that its quality relates to its cost.
5. However, the more generic a software application is, the more likely it is that you get better quality for a lower cost - standard economy of scale.
   Hence Google GMail / Microsoft Office / open source Apache - are good quality - because they are large scale generic applications.  
   The more specific an application is, the more likely the software (whether open source or commercial) will have been put together by a core group of at most 3 or 4 developers, hence have less quality control methods applied, be more buggy and risk being generally of a lower standard.
6. If the IT Services department of your organisation is not sufficiently powerful enough to tell the users what they are going to get, despite what they want. It is common that many systems it deploys will require significant customisation, the more specific they are, the more the customisation.
   Customisation of out sourced, closed source products is likely to incur significantly greater time and development cost than open source ones. Whether customised in house or out sourced. If customised in house then unless the software has a well designed API, docs etc. - ie is a widely used generic system from a major company. You usually find that you can only do black box integration and wrapper coding or resort to breaking license agreements by decompiling. All of which is difficult to maintain.
   If out sourced, then the code may be open, test suited and documented within the supplying company, but you are likely to be paying around 3 times the wage to the company, than your inhouse cost,  for a junior developers customisation / bug fixing time.
7. Due to historical reasons some types of software have far superior products that are all in one of these camps than the other ... So open source finance software is poor. Closed source web CMS software and repository software is poor, etc.
8. Non-technical companies will go through a 5-10 year cycle of outsourcing as much software as possible, then auditing consultancy costs, then ballooning internal development to cut costs, then deciding too much development is in house back to outsourcing again. This cycle wastes a lot of money due to its lack of understanding of the benefits of a stable highly selective mixed economy for software of outsourced, open source, commercial and in-house as being the ideal balance of functionality vs. cost.
9. Buying mix and match products from integrated product suites is a recipe for high cost, eg. MS Exchange Email and Google Docs, rather than all from one or other supplier.
10. Lastly and most importantly a non-technical organisation always makes its software procurement decisions based on political reasons*. Never on technical ones. This invariably means that it makes decisions that are significantly more costly, difficult to maintain and less well featured than it could achieve using a purely technical assessment process.
    Usually they will also fail to have processes to properly trial run alternative products in a realistic manner, or to audit selections once the initial purchase is made. This may partly be because although auditing may save significant costs in the long run, it does introduce a means by which a wrong choice can be flagged up. Unfortunately it is often less embarrassing to make do with a bad choice, until its end of life, than admit a failure. Even though failing and acceptance of it as part of the process, is essential to delivery of quality (rather than make do) systems. 

Thank you ... rant over :-)

* political reasons - The salesman managed to persuade someone suitably senior that they were technically clueless enough to believe them. This usually goes in tandem with, company software team response ... the salesman promised them it did what?? ... make damn sure that isn't in the contract / licensing agreement.