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Offshore IT: bowing to the inevitable?

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Internet Security Threat Report 2014

Offshoring, which has been popular in the financial services industry for years, is arguably the biggest threat to indigenous IT careers in North America and Europe. IT workers will want to try to prevent the mass exodus of jobs to cheaper labor markets, but such protests are likely to have minimal effect in the end.

Hardly a week goes by without one of the big IT players like Microsoft, Intel, IBM, Dell, Sun Microsystems, or Hewlett-Packard announcing plans to set up a hardware or software engineering center in a popular offshoring region. Tech support and call center functions have also been moved offshore in an effort to cut costs.

The Washington Alliance of Technology Workers, an IT union, has posted a presentation purportedly made by Brian Valentine, senior vice president of the Microsoft Windows division. He explained that offshoring means a company can extend its workday across several time zones to work virtually around the clock in all parts of the globe. This can shorten time to market, particularly if offshored programmers are checking code that is written in the home market. Code is written one day and validated before the start of the next day.

But the real issue with offshoring is the cost savings it can bring to all types and sizes of companies. IT organizations can tap into the vast engineering resources in India - Mr Valentine said that there are 450,000 software engineers in India, with another 70,000 added every year. He also said that Indian programmers can deliver quality work for 50% to 60% of the cost of a programmer back in the US. Because of the lack of indigenous jobs in their own countries, those working in offshoring operations in India, China, and so forth are happy to take short-term jobs. What choice do they have?

And what choice will IT organizations have to fight the temptation to offshore? The availability of cheap, deep IT talent is something that they will all want to take advantage of. Workers in the IT industry will want to organize to try to stop this, but the pursuit of the almighty profit will probably prevail in the end.

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