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PostPosted: Thu Jun 16, 2005 1:14 pm 
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Another Silver Bullet that should make the Pointy Headed Boss happy. I'm always amazed at how little corportate America understands how to develope software and how well others understand how to use that information.

My favorite line, "It's conventional wisdom that in it outsourcing, China is the next India. It's also conventional wisdom that China is not yet ready to be the next India".
I hate to break the news to them but India isn't ready to be the India that everyone thinks they are.

Quote:
China Is Next Offshore Frontier
June 13, 2005
By Stan Gibson

It's conventional wisdom that in it outsourcing, China is the next India. It's also conventional wisdom that China is not yet ready to be the next India. And it may be conventional wisdom that there's always someone who's ready to attack conventional wisdom.

One such attack is coming from Freeborders, an offshore outsourcing company that is placing its bet on China now, before most observers think that country is ready to assume—or usurp—the mantle of India as the world's No. 1 offshoring destination for software development.

"Our goal is to build the Infosys or Wipro of China," said Ramsey Walker, co-CEO of San Francisco-based Freeborders. Walker asserted that a company that has developed sufficient scale and maturity of process will emerge to fill that role within 12 to 24 months. "We believe that only China can rival India because of raw numbers of talent. So we are making our bet on China," Walker said.

Freeborders' gamble is well under way. The company now has 400 workers in Shenzhen, about 40 miles from Hong Kong, and aims to increase that number to 1,000. The company specializes in developing software for three vertical markets: retail and consumer products, software, and financial services. Walker described the privately held company's financial condition as "break-even."

The software development market in India is rapidly reaching saturation, Walker said. He agreed with the conventional wisdom of India critics that the country's tech sector is undergoing rapid wage inflation and that corporate loyalty extends only as far as the biggest signing bonus. "When you have teams that are turning over, and you have wage inflation of 15 to 25 percent, then India is running into issues," he said.

One Freeborders customer, software vendor BroadVision, found the outsourcer on target. Jim Harrington, senior vice president of human resources at BroadVision, said his company's decision to have some product development done by Freeborders in China was not about cost alone, although he acknowledged that BroadVision is spending only about one-fifth of what it might in the United States for the same development services. BroadVision is no newcomer to offshoring, having established a Moscow development center in 1997 and having some development work done by Indian partner Infogain.

Harrington said his company wanted to put down roots in the next offshore destination that's soon to explode with demand. "We view China as the next site of industrial revolution. We want a foothold long term in the enterprise China software market," he said. Harrington said his company's hope is that the group developing BroadVision's software will spread its expertise in China, creating a pool of talent from which BroadVision will later benefit. This will help in the future when BroadVision sells its wares in China; company executives figure the more Chinese people who are familiar with the BroadVision product line, the better the chances of future sales in that country.

One gripe of outsourcing customers is that the team working on their project is subject to change without notice. A customer may think it has signed up with the "A" team, only to have the "B" team swapped in later. But according to Harrington, BroadVision was able to meet and check out the Freeborders team that would be handling its work, with the understanding that the team would stay intact. "We did complete due diligence on the employees, HR, compensation and incentive compensation," said Harrington.

India—old news? China—the happening place? Conventional wisdom is under attack.

Out and about

Alsbridg, that's the new name for the company formed by the recently completed merger of Trowbridge Group and ALS Consulting. Trowbridge was an outsourcing consulting company based in Dallas, and ALS was a European shared services and outsourcing consultancy based in London. The company will continue to advise clients on both outsourcing and insourcing strategy and vendor selection. The combined contract value of all deals negotiated by Alsbridge executives is greater than $50 billion, the company said.

Stan Gibson can be reached at stan_gibson@ziffdavis.com.


To read more Stan Gibson, subscribe to eWEEK magazine.

Check out eWEEK.com's Outsourcing Center for the latest news, views and analysis on outsourcing.
Copyright (c) 2005 Ziff Davis Media Inc. All Rights Reserved.

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PostPosted: Fri Jun 17, 2005 4:24 pm 
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MikeK wrote:
Another Silver Bullet that should make the Pointy Headed Boss happy. I'm always amazed at how little corportate America understands how to develope software and how well others understand how to use that information.


Well I'm a programmer too, and while I'll agree that quality of software design does vary, the jobs that get outsourced are primarily code-monkey positions that really anybody can do. There is such a thing as architectural elegance, maintainability, extensibility and all that good stuff, but overall I have to say that I think we are a bit overpaid.

There are applications for which you really do want top-quality coders (kernel development or game engines, for example)... but most of the applications, and certainly websites that get devlopped don't really involve anything that takes serious talent or intelligence. Personally, I have yet to seriously apply any of the advanced algorithms or techniques I learned in school. Also, I see no reason to think that programmers in India are less capable than we are. They may or may not have gone to worse schools, but I really don't think that matters very much at all.

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PostPosted: Sat Jun 18, 2005 3:59 am 
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Valkenar wrote:
There is such a thing as architectural elegance, maintainability, extensibility and all that good stuff, but overall I have to say that I think we are a bit overpaid.

There are applications for which you really do want top-quality coders (kernel development or game engines, for example)... but most of the applications, and certainly websites that get devlopped don't really involve anything that takes serious talent or intelligence. Personally, I have yet to seriously apply any of the advanced algorithms or techniques I learned in school. Also, I see no reason to think that programmers in India are less capable than we are. They may or may not have gone to worse schools, but I really don't think that matters very much at all.


I am confident that you know your situation better than anyone else, so I can only agree that you are probably overpaid. However, I know people who are SW engineers who are not. I also know of coding that has been outsourced and even though the "bean counters" looking at the hourly rate think everything is just great, the product has had to be redone numerous times. Had that same product been done with on-hand staff, the communication and close interaction would have insured that it was done correctly much sooner and actually at an equivalent cost.

I had a lunch meeting with some folks the other day who were discussing the fact that both SW and HW was being outsource and that they were getting back shoddy designs/code and having to spend even more money, time and effort to correct it. One discussion was around a new product being outsourced to India. The HW is just wrong and they've had to have it redone 3 times SO FAR. What's really scary is that this is supposed to be a product that folks will be relying on every day. I won't say what it is because the conversation was confidential, but I just know that I'll be pretty cautious when some things get announced as new products in the not-too-distant future!

In my case I have done HW design and consulting for a long time. The last product I worked on required me to design three different chips, help with the various board layouts, integrate and debug each board as well as the entire system, and make sure that it passed all the required FCC and FDA testing. I was the main engineer on the system which is now in 6 countries and is used in medical research. I worked on it at a reduced rate with a "handshake" agreement because I was a "friend" of the owner of the company and was promised payout on the backend. Part of the reason I reduced my rate was because of comments about outsourcing the design to India. Yeah, right... I've had other engineers ask me how we did what we did on this product (couldn't tell them... NDA) and the only answer that I can give is my MSEE (with honors), my knowledge (including patents), my experience (over a decade), and my persistence (including many 60-80+ hr weeks). Unfortunately when that product started shipping and the company was bringing in literally millions off of it, I was dropped. That "friend's" position was that our agreement wasn't in writing so too bad. I happen to know that there was some office politics involved and another business partner, upon seeing the money start to flow in, decided that he didn't want me to get a cut. I learned from that.

Now, I've talked with a number of companies about work... employee, consulting, contracting... I have heard the same lines so many times I'm tired of it. It always starts with a salary or rate offer that is absurdly low, then I get one of two lines... either 1) "If you won't do it that cheap, we'll just outsource the whole thing to India" or 2) "There are plenty of kids right out of college that will do it for cheap because they're hungry". Well that's fine by me. None of the companies want to pay for my knowledge, experience or track record... and they don't seem to care about the list of million dollar products that I've either created or helped to create. Fine. I won't work for third-world wages. It's just not feasible for me. I have other things I can do with my life. Personal projects, personal products, enjoy things instead of spending 60 or more hours a week for someone else who is only paying me for 40 hours anyway... Someday folks in the U.S. are going to wake up and realized that we've outsourced our innovation and mental advantage. Then they can all learn how to flip burgers and greet folks at Wally-world. But that's not for me.

Are some folks overpaid? Absolutely! Is outsourcing our high-tech infrastructure the answer? No!

Certainly there are products that are non-critical and inexpensive enough that outsourcing for a lower development cost is reasonable. But there are enough engineers in this country and enough high-end, mission-critical, life-on-the-line products that need to be designed to keep engineers busy here. What I'm seeing is that companies have saved money on those non-critical, inexpensive products and think that they can do the same thing on the critical, expensive products. Unfortunately, what is happening is more than just top engineers losing jobs to outsourcing, it is the reduction in quality, experience, innovation, and knowledge that is required to make those critical, high-end products safe and trustworthy. Sooner or later, that's going to cost everyone. When people realize that, it will be too late to change it.


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PostPosted: Mon Jun 20, 2005 2:22 pm 
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Panther wrote:
Are some folks overpaid? Absolutely! Is outsourcing our high-tech infrastructure the answer? No!


I certainly agree that there are jobs we shouldn't be outsourcing. I listed a couple, and if you want to add hardware design, well that's fine by me. Mission-critical apps and so forth need to be done well. And certainly it's possible to spend more money on cheaply repeating failures than doing it right the first time, but at a premium. My point is that outsourcing such jobs is not always a bad decision for the company doing it. There are cases (and plenty of them, I think) where the coding is very simple and can be done competantly by just about anyone.


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PostPosted: Mon Jun 20, 2005 3:34 pm 
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I can agree to that. But instead of outsourcing these jobs to other countries, perhaps they could be done just as cheaply by folks here who are entry-level, coop or work-study, or who have learned about programming but don't have a degree. I don't think there is any real disadvantage to doing that, but the advantage is that the person is here and can be interacted with on a regular basis about the product in order to make sure it is going to fulfill the requirements.

One of the problems with this "globalization" of everything is that it isn't really helping others and it is hurting us. According to some recent news stories I've watched, the income of some in other countries has increased somewhat, the income for workers here has diminished, and the real increase has gone to the corporations who are taking advantage of the fact that people here don't want to take such a huge hit to their standard of living and people over there are willing to work for a very modest increase in their standard of living.

Fundamentally, that is a large part of living in a free, Capitalist society. The advances in technology have allowed corporations to take advantage of that on a scale that has never before happened and never before been seen. I'm not quite sure I have a "problem" with that. It effects me right now and that bothers me in the short term, but I'm not even sure that's a bad thing. It has caused me to rethink my personal, professional career and actually broadened my thoughts on what I want to pursue. Perhaps that will be bad for me, perhaps it will be good for me, but it will certainly be an adventure... and it's an adventure that I'm already taking the path towards. ;)


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PostPosted: Mon Jun 20, 2005 4:44 pm 
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Panther wrote:
But instead of outsourcing these jobs to other countries, perhaps they could be done just as cheaply by folks here who are entry-level, coop or work-study, or who have learned about programming but don't have a degree.


I think this would be a better situation as well. The fact is that anyone who can think about how something is done can learn to program with Delphi or Visuabl Basic in a couple months. I personally despise those languages, but for the sort of random in-house apps that people can end up paying tens of thousands for they're good enough and effecient in terms of development cycles.

Quote:
Fundamentally, that is a large part of living in a free, Capitalist society. The advances in technology have allowed corporations to take advantage of that on a scale that has never before happened and never before been seen.


I don't really know how to (legitimately) give such companies an incentive to provide high wages here rather than take jobs overseas. People often draw the comparison to textiles, and I do think that is fair for the most part. To some extent the answer may simply be that we're not going to export our high technology. In 92 web development was cutting edge, but now it's like sewing shoes. Anyone can do it with minimal training. As technology continues to advance, the list of things that are within reach of untrained persons increases (to a certain point, anyway).

Part of my reason for speaking in favor of outsourcing as a valid choice is that I think it's a mistake to be complacent and think of "code monkey" jobs as high technology that we should be focusing on. The kind of things Google is doing, or AMD, nVidia, Blizzard and the like are more in line with what I consider high-technology in the information-processing fields. I don't know what you design, but from the sound of it you're also doing things that are innovative and thus not really doable by just anyone.

I'm curious what you have patents on though. I tend to take a somewhat dim view of software patents since there are an awful lot of patents that I think are truly bogus (Amazon's one-click for example is a ridiculous patent).


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PostPosted: Mon Jun 20, 2005 5:22 pm 
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Quote:
The fact is that anyone who can think about how something is done can learn to program with Delphi or Visuabl Basic in a couple months. I personally despise those languages, but for the sort of random in-house apps that people can end up paying tens of thousands for they're good enough and effecient in terms of development cycles.


1) Why would you teach someone dead languages?
2) The major problem with random in-house apps is that they tend to be a) permanent (ad hoc never is), b) poorly done, c) inaccurate, d) not source controlled, e) disconnected from the rest of the systems, f) rigid. All bad things.
3) I've been a C, C++ and Java developer for years and I loved working with Delphi and VB. Don't look down at things that help productivity.
4) Having non-developers develop just creates more bad applications.

I've got the t-shirt for all of those things. :wink:

BTW, I find the attitude toward "code monkeys" funny. Those CM jobs are the starting place for many inexperienced programmers (aka FNGROC) to pay their dues and learn how to really develop software.

FNGROC = F$%^ing New Guy Right Out of College. :lol:

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PostPosted: Mon Jun 20, 2005 6:30 pm 
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It's been interesting reading about this.

Several karate students or parents of karate students tell me the horror stories of a local, well-known bank and credit card company (What's in your wallet?) laying off programmers and outsourcing it to India. This was all the smart idea of a bunch of smart MBAs who had no friggin idea what they were doing. They bought into the whole hype about work being transplantable. They saw the opportunity to make a bonus by "saving some money," and were on to a promotion and their next assignment before the reams of work came in to repair the bad code that didn't work. Instead of saving money, it cost them BIG time.

And now that their local programming talent has left - along with knowledge of their industry - the folks producing the bad code from India want a raise.

This same crap happens even WITHIN industries. Some MBA thinks he can make things operate more efficiently by putting programmers into teams, and assign them out to tasks as various departments need them. Problem is, it takes them too long to learn the peculiarities of the internal customers they are supposed to serve. So "inefficiencies" are converted into defective software that doesn't meet the needs of the internal customer.

No worrks for the MBAs though. They have their promotions and are too far gone from their jobs to catch the blame. And they have gravitated from the BMW 3 to the 5 or 7 series cars.

What a country! 8)

I recently had the "pleasure" of having a software project thrown in my lap inbetween development and testing. The coder left for another company after having "completed" her work.

To make a long story short, what should have been a "code monkey" task was a complete abortion because the statistician and the "code monkey" were too lazy to realize what it took to build an addition to a product that affected a couple hundred million lives. They took someone's old, warmed-over code, plugged it in here and there, got it to where it appeared to work, and then called it a day. And then it was up to me to tell the production guy how to turn this SAS code into C++ code. Problem was, the statistician and "code monkey" had no friggin idea what the code was doing that they "borrowed." The entire project derailed, and I had to start it from scratch and do it the way it should have been done in the first place. I am neither a professional programmer nor a professional biostatistician, but I had to teach myself to be both to make this thing work.

So much for "code monkeys."

It's amazing how half a brain can get you a good job these days. Many make a lot of money with less than that.

- Bill


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PostPosted: Tue Jun 21, 2005 9:03 pm 
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Valkenar,

I agree that there have been plenty of patents granted for things that are questionable.

My patents were granted in the area of hardware design. Specifically relating to high-speed data movement techniques within the processing chips. They came about because I worked for a long time at networking companies or networking divisions of companies and there was the desire to increase data transfer speeds and also because there was a need to be able to transfer data between systems with different sized data-paths running at different speeds while maintaining throughput in the faster system without data lose.

(yeah, everyone always says to just make a massive FIFO to handle the burst... problem was, it wasn't a burst it was continuous high-speed data and simply creating a FIFO wouldn't handle the situation because a FIFO would eventually overflow and lose data... It's not important how I solved the issue - actually, I'm not supposed to discuss it - because one of the big networking companies now owns and uses that patent in it's equipment. Me... For that one, I got a nice patent certificate to hang on my wall and a significant one-time payout a number of years ago. :mrgreen: )

Anyway, I think Bill and I are on the same page with this stuff.


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PostPosted: Wed Jun 22, 2005 12:16 am 
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Same this is happing to pakistan from what i hear from relatives.


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PostPosted: Thu Sep 22, 2005 1:05 pm 
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My company in in the process of doing this, yet again, this morning. What they like to call FMRs (Force Management Reductions) and what we at the bottom of the food chain like to call "layoffs".

I'm really just typing here to blow off some steam. This will make the 6th or 7th round of layoffs I've sat through in the last 3 years. They never get easier. Yesterday the "pointy haird boss" asked us to all be into work by 9am today (we know that this is "boss speak" for "we are sending some of you packing"). Now we play this game where we all sit quietly at our desks, bulls**tting with one another, until the ominous ring of someone's phone with a voice on the other end saying "can I see you in my office".

Everyone tenses up.

Who's phone is that?1? WHEW! It was "so and sos". Better him than me. Wait! That's terrible of me to even think that!


Contact information is exchanged. "Feel free to use me as a reference." "I hear ACME Technology is hiring." "Is your significant other still out of work? That's tough. What are you going to do?"

And more guilt/relief when the "all clear is sounded." Pointy haired boss calls everyone else into a conference room and says the bleeding is done... for today. And then 20 minutes of painful b**lsh*t about "The company needed to improve its bottom line." "We need to be a more agile company."

Enough ranting for now. I think I hear another phone ringing nearby. I've gotta say another goodbye.


l8er,

chewy


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PostPosted: Thu Sep 22, 2005 6:06 pm 
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We are seeing the same thing happen in the industrial market. I am in the pump business and most of the large American manufacturers are sending their foundry operations and small assembly products off to China. The return is a less than desirable product that you have to wait forever to get. Because of many of the EPA regulations its cheaper and easier to go overseas and polute someone elses backyard. Also because of this trend the price of metal, concrete and other building products keep rising just to support the building of infrastructure in these countries.


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PostPosted: Fri Sep 23, 2005 10:04 am 
Nowadays, the thing to do is get on with a company that does government contracts (if you can get a security clearence, all the better). I worked for JDS Uniphase for 4 years before I found out my job was going to Thailand. What really ***** is I had to TRAIN them, hah hah... I jumped ship shortly thereafter.


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PostPosted: Fri Sep 23, 2005 12:26 pm 
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Five of the electrical engineers in my group did not. Two had volunteered and two more seem to have jobs lined up. That's a good sign, given that those laid off 2-3 years back couldn't find jobs for over a year, if at all.

My company isn't really "outsourcing" hardware engineers yet, just sending them packing. Out software group, however, is in tatters. We once had a couple hundred "softies" in the building, now we are down to 5 and the rest are in Bangalor, India. Now, (surprise surprise 8O ), our SW is shipping later and later and getting more and more buggy. Customers are complaining more about our software reliability and our attrition rate at the India facility is over 25% a year! Why, may you ask? Because the softies over there change jobs twice a year so that they can keep getting raises. Many are quickly approaching the salaries we paid here in the US in the late 90's.

Even better, for just hardware guys/gals, is whenever the softies have a question/concern with our electronics it takes 12 hours for us to answer their question and another 12 to see if we addressed their concerns! What a way to do business!

The funny part of the story is that I've heard a couple softies complain that some of thier jobs are going away... to Thailand and Mexico :lol: .


cheers,

chewy


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PostPosted: Fri Sep 23, 2005 1:12 pm 
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I just found out that the guy who a few years back layed off me and many fellow coders just got axed from his new cushy job. So what goes around comes around. I don't usually do a jig over anybody elses misfortune but this company screwed me out of 2 hours of pay in my final paycheck. It didn't matter to me much financially but just that they did it, knew they did and didn't toss me a bone pissed me off.

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