The Coming Death Of Indian Outsourcing

http://www.forbes.com/home/enterprisetech/2008/02/29/mitra-india-outsourcing-tech-enter-cx_sm_0229outsource.html

by edw519 • 18 years ago

36 19 18 years ago

neilk3• 18 years ago

...and the coming rise of Indian entrepreneurship.

People are often too quick to cry racism, but I really think that's the only explanation for all these "India isn't a problem" stories.

Most Indian engineers are Java drones, but guess what... most American programmers are Java drones. And yeah, there's a new generation that's prosperous on relatively less effort, but have you taken a look at Silicon Valley lately?

Unless you believe that the American innovation engine is also slowing, you don't have a lot of reasons to believe that we won't see more and more innovation coming out of India. In fact, if there's a crash in outsourcing, it might accelerate that process (or simply shift the outsourcing market to target Europe).

asdflkj• 18 years ago

This is a matter of culture, not race. Is culturism bad these days?

michaelneale• 18 years ago

Good question. I don't know - people tend to throw the "racism" term around when really its culture. India is made up of a bazillian races anyway, so clearly it can't technically be racism unless someone intends to slightly a significant percentage of the global gene pool in one hit (which is more comical, then anything).

gruseom2• 18 years ago

People are often too quick to cry racism

You mean like without offering any evidence for their claims?

I thought the article was superb, well reasoned on its key point of cost inflation in the industry, and thoroughly devoid of sordid prejudice.

Your reference to Indian entrepreneurship is a little ironic since the author (whose name is a Sanskrit word) has herself founded and sold two companies [1], and appears to have a particular interest in... Indian entrepreneurs [2].

[1] http://seekingalpha.com/author/sramana-mitra [2] http://www.forbes.com/technology/2008/02/22/mitra-zoho-india...

neilk3• 18 years ago

I'm busted. Okay, I missed that, and I have to retract what I said. I went off half-cocked.

I do have evidence for my view (although, obviously not applicable to Ms. Mitra). I'm half Indian and half Caucasian. Many of my relatives are in the outsourcing biz and I work for the American giants that are their customers. So I see both sides. I tend to think most Americans in this industry underestimate their Indian counterparts, and underestimate how fast things can change.

But, Ms. Mitra's pessimism is obviously borne from experience. Though her other articles show Indians doing more innovative things, perhaps she sees those as the exception.

bobp• 18 years ago

Many very smart people built amazing products in Java (Google, Amazon, Ebay). Calling them drones makes you sound like an amateur.

ptm• 18 years ago

He's not saying everyone who uses Java is a drone. He's saying most Indians (and Americans) are Java drones.

neilk3• 18 years ago

You're right. I didn't mean to imply everyone who uses Java was a drone, but there is a class of Java users who are heavily dependent on frameworks and couldn't code anything from scratch.

I myself have written in Java for one of the companies on your list.

rms2• 18 years ago

And Africa will become the last bastion of cheap outsourcing and manufacturing.

timr2• 18 years ago

That would be difficult. As bad as Indian infrastructure may be, most African countries are far worse.

rms2• 18 years ago

It has to happen eventually as long as African wages stay low.

randomhack2• 18 years ago

I am not so sure. Maybe the wages will stop rising? Once companies start to lose business, they will fire employees, creating an oversupply of workers and thus driving wages down?

aneesh• 18 years ago

Well, is this any surprise?

Not really. Merely a consequence of the Hecksher-Ohlin international trade model. Under relatively free trade (free of tariffs, etc) of software, real wages paid to software engineers should equalize across countries.

iamelgringo• 18 years ago

I am pretty sure that Indian outsourcing is going to be on the decline, but that's just because India is getting to be at parity with the US in certain respects. Salaries in Bangalore are almost at parity with salaries in Silicon Valley, say a couple of my Indian friends who are from Bangalore and are working in the Valley.

But, now that there is an upper-middle class in India, when the ball drops, and people lose their jobs I think they'll find it relatively easy to start a business and code a web app. Why? Because they can now afford a home computer and bandwidth. And, a $20 a month Slicehost account won't break their monthly budget.

I think what people who are born and raised in the States don't really understand, is how much of a luxury item having a computer is in most of the world. It's hard to buy a $400 computer when you're living on $200 a month.

pauljonas• 18 years ago

Eh, matters arn't as simple as portrayed - a good bit of U.S. application support/development has went overseas to India... ...within a short 15 minute drive of my home in Arizona, I can tally thousands of programming jobs (mostly old school COBOL + CICS type work, but not limited to, as tons of Java and web developer slots too were affected) that went overseas. Departments comprised of 200+ employees (plus additional U.S. contracted programmers) now are skeleton crews that manage a blend of offshore and non-immigrant Visa workers that work at company facilities on-site or in special facilities here in U.S..

But in 5+ years time, the Indian programmers become the system subject matter experts as the few remaining U.S. workers mark the days until retirement. There are few young U.S. workers waiting in the wings, and any American who has opted for a career in programming has chosen something more "sexier", like working with Rails or as a web developer, even if the pay is a fraction of what a developer could make 15-20 years ago working with such "old school" mainframe technology...

But those systems are still running, every time you use a credit card, book a flight, use electricity, etc..., the "main nerve center" system that accommodates such transactions is still going to be a COBOL system with a DB2 (or even worse, an ancient hierarchical IBM IMS database)...

The Coming Death Of Indian Outsourcing

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