Everyone seems to be making the assumption that all the work IBM India does is outsourced from US. IBM India is the biggest domestic IT player in India with clients like Airtel, Indian Railways, HDFC etc.; IBM India also services clients from other countries in the world (which wouldn't have happened otherwise because its too expensive in the US). And, IBM India, has a few research labs setup that do independent research.
Considering this, how is the number of employees in India and US even a relevant question. Isn't it similar to say why is there more manufacturing workforce in China when compared to US for company X? We know why, it costs less for the company and the client, and taking advantage of it opened up new markets/demand.
The reason people are comparing US and Indian employees is because the doubling of IBM's India workforce since 2007 seems to be, in many ways, a result of labor arbitrage, as the linked article is arguing. You can slice things any way you want, but the fact is that this is a problem for the average American worker. In other words, it's something that readers of the NYT would care about.
Do you know that Indian GDP has grown significantly from 2007? Could it be that the market in Asia has grown and hence IBM wants a larger presense in India. And that since the labor is relatively cheaper they can afford more people over there than in USA? Why do you think that by staying in US IBM could have competed with other companies in India fighting for the Indian/Asian market?
Americans are not aware of cost of living in places like Bangalore. The India real estate is expensive for the folks living in Silicon Valley. It is cheaper to buy real estate in USA compared to India.
The same is true in china, but that has more to do with real estate bubbles than fundamentals. Rents are still very cheap. Is the same true in Indian cities?
Rents go up high too. Can't say how well they correlate to prices for buying outright (as your other question asks), but they are high, IME. Also, some property owners raise the rent each year. Talking about residential rents here, but I think commercial ones raise it each year too.
In Bangalore, sale price/monthly rent ratio in an ok neighborhood would be around 200. In a pretty good neighborhood this go up to to 300-400. Mumbai is more expensive than this. Nobody buys property in India and makes a killing off the rents -- its mainly the price appreciation (inflation is around 6-7%).
In countries of > 1 billion people who are racing towards development, the real estate bubble just goes on and on. Even in smaller cities, real estate is seen as a very profitable investment as even more people make the rural to urban transition, jacking up demand to stratospheric levels.
Population of Bay area is about ~7 million. Not even 100 million. The real estate bubble is going on for 50+ years here. So, it is nothing to do with population. Today what we call as growth is just a bubble.
Bubbles always last longer than you'd think, but at some point they all end. Absent some kind of crazy government intervention, prices are ultimately supported by rent.
In china, people are banking on urbanization: because poor farmers are really going to be able to afford a small apartment in the city for $1 million. Really.
Even the arbitrage is going to start failing. The housing is insanely expensive in India especially relative to the salaries. At some point most of the people who can leave will leave, because its hard to live there with the salaries they are are getting. You can make more in other countries and the housing difference would not even be that much different.
I'd say worse. IBM employees in India get paid around 500,000 rupees in India. A non-cramped 2 bedroom apartment in a decent area in the big cities (Mumbai, Bangalore, Delhi ) will set you back 10,000,000 rupees easily.
That is 20 times their salary. I'd say that's a higher multiplier per unit salary, than for the US.
Also note that living just outside the city (as people in the US do) isn't always an option, unless you are up for a 2+2 hour commute daily.
The 500,000 you mentioned doesn't seem correct to me for IBM. It is the lowest in the IT sector targeted to freshers from substandard colleges. In most first and second tier college, the average for IT is 15,00,000 to 25,00,000 at the time of joining.
I am studying in college that has is not known by most people in India, and the official average here is around 18 LPA. I have the stats from the placement unit of our college. For IITB and BITS Pilani, I can confirm from friends it's around 27 LPA. This is one public stat I can find: http://www.selaqui.org/iit-jee/placement.php. Average is 24.67 LPA for CS, and it's from 2011-12. I don't know why you reacted with so much disbelief, when every one and every newspaper tells that average for IT placement is very good.
I reacted with such disbelief because I know many people that work for big consultancies such as Capgemini, Cognizant and Infosys, and even in tier 1 and 2 cities with 10+ years' experience they don't make that much. Hell, many consultancies bill their EU and US clients less than those figures!
I also hire directly for our own office in Mumbai from time-to-time, so I know that market rates are.
Just look at any jobs board - even for experienced devs, its rare to find such high paying jobs, e.g.
Companies such as Wipro, TCS, Cognizant and Infosys are considered lowest in this sector. No kidding, they pick up 1000s in a single day from a single college. e.g. see http://www.srmuniv.ac.in/placement/statistics_2015.html
> SRM University sets new placement record of 6064 on Day 1
> The highest offer was from Wipro 1641, followed by TCS 1611, Cognizant 1506 and Infosys 1306.
You can imagine the quality of interview when they have interviewed at least 1500 students on a single day.
That is because you are looking at a cherry picked data to make your point. From the link:
The department-wise average and highest salaries are shown below. The overall average and highest salaries stand at 8.98 LPA and 68.5 LPA respectively.
So the average salary is 8.98 lakh. Unlike what you might like to believe there are many non-IT people working in IT, specially in places like IBM. So their salary will be even lower than 8.98 lakhs.
Of course.. It's not cherry picking. I said IT sector is doing pretty well in India. I never claimed anything other than that. Most majors have hard time finding any job in their sector.
And the point I am trying to make is - It is not the spring you believe it to be. Let's take a look at actual IBM India salary, should we? Here's the data from glassdoor:
https://www.glassdoor.co.in/Salary/IBM-Salaries-E354.htm
Most freshers get near to Associate Systems Engineer. The salary range is between 3.7 lakhs to 8.65 lakhs. This is farcry from what you believe it is. Yes, there are colleges whose salaries are pushed to the limit thanks to the startups but majority are not as well of as you might think.
> And the point I am trying to make is - It is not the spring you believe it to be. Let's take a look at actual IBM India salary, should we? Here's the data from glassdoor: https://www.glassdoor.co.in/Salary/IBM-Salaries-E354.htm
Yeah, I concede. For some reason, I had the belief that IBM is one of the better paying company in India, but it pays on the level of inferior consultancies.
The numbers you mentioned are towards top end of industry. Most people I know with 5-10 yrs of experience make less than 10,00,000 in any of the major IT company.
That is an exaggeration, or your standards are much much higher than mine. I live in a good area that attracts bankers and minor celebrities. Flats of the type you describe are 500-600K. Still expensive...
I've heard a lot of my foreign born collegues do that. After they've reached a certain seniority, they decide to go back to their country of birth while keeping similar compensation, essentially making them very rich in their home country. I've only seen this work for Indian and Chinese born nationals though, where the home country has good relations with the US (as opposed to, say Iraninans, who don't have the option of going back).
Collect a U. S. salary while shipping the actual work to a less expensive worker elsewhere. Just like companies do, only on an individual basis. I believe it has actually been done (then the person got caught and fired, IIRC).
> "As it turns out, Bob had simply outsourced his own job to a Chinese consulting firm. Bob spent less than one-fifth of his six-figure salary for a Chinese firm to do his job for him."
You're getting a little defensive here. IBM was one of the crown jewels of American industry. It was an iconic company in its time. The fact that it now employs more people in India than the US is something to ponder. It isn't so much about the merits of outsourcing.
Everything can be done cheaper by getting it done in another part of the world. Should it be? Sometimes the answer is yes, at other times, not.
Imagine for a second that 50 years from today (when say India is in a place where the US is today), many Indian jobs are outsourced to another country. Same thing.
Assuming the relocation of work is only due to arbitrage in wages and not bypassing environmental or human rights causes, then how is it decided what can be arbitraged, and who gets to decide this?
Are people allowed to go to Walmart and choose to buy something for less money than the mom and pop store? Are traders allowed to take advantage of pricing differentials in different markets? Are employers allowed to relocated outside of San Francisco to find less expensive employees?
You can try to stop the market from reaching equilibrium...but I have a feeling you won't win in the end, at least not without some help from the armed forces.
I'm not fully arguing against your point, but would just like to make one observation:
IBM has been laying off people in the US (and maybe elsewhere too) for several years, every now and then. I have been in the software field for many years now, and have been reading the industry news for a long time, that's how I know it. I remember even way back, I used to read the news in Indian and foreign IT magazines, every now and then, that IBM (and other US companies too) were laying off like 10K, 20K, or more workers at a time. And it was not always because of outsourcing jobs to India, in many earlier cases it was before outsourcing even started.
Could be. I check that sort of news less these days - jaded.
But it sort of reinforces my point that companies do layoffs. Sure, some Indian companies have started doing it too, whatever the pros and cons may be.
Founders and CEOs in the US like the ability to hire and fire, and the idea of employment at will. Some employees, less so.
India has historically been a country where paternalistic management practices were common, and firing was seen as something to be avoided as far as possible, considered as a big deal, the news and impact of it to be minimized or played down (I know this last point is so to some extent in the US too), and as a huge social stigma (for the person being fired or laid off). That has been changing some recently, due to Western influences. There can be both pros and cons to the matter. Don't have a final viewpoint on it.
Edited to change "been a company" to "been a country".
Edit: Quoting myself:
>India has historically been a country where paternalistic management practices were common, and firing was seen as something to be avoided as far as possible
This is also the case in government service - as in, in India, for long, and maybe even nowadays, it was almost impossible to fire a government employee, whatever the reason. Job security (along with poverty) was a huge reason why, in earlier years, many, or even the majority of people preferred government jobs - because even though the pay, environment, perks were all mostly shitty - though getting cheap owned or rented housing was seen as a good perk by many - again, a house was seen as a major asset to strive for - you could not be easily fired from your job. In a country with devastating annual floods / droughts (both still the case) / somewhat frequent famines, poverty, etc., those were factors to be considered. I remember even a classmate of mine (this was many years later than the start of the period I am talking about - the start was at Indian Independence or even years before), exulting to a few of us friends that "I 'got' DOTE!" (where DOTE == Department Of Technical Education", meaning that he got a "seat" in a government engineering college, meaning that if he did his stuff even just adequately, a secure lifelong government job was guaranteed - as witnessed by his answer when someone asked him why he went for it - his answer in one word was - "security" (of livelihood, of course, not computer security).
It wasn't merely an accident. The US had a superior context which enabled something like IBM to exist and thrive.
Name another country circa 1911 that could have produced IBM and enabled it to acquire such vast global scale at its peak. There are only a handful of nations that can even be considered as possible.
IBM came out of the US for the exact same reason Fairchild, Intel, Cisco, Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple, Qualcomm, etc. all did.
>IBM came out of the US for the exact same reason Fairchild, Intel, Cisco, Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple, Qualcomm, etc. all did.
By that reasoning, IBM is outsourcing from the US for exactly the same reason virtually all the other companies you listed are.
Sure, something about the US helped them to exist and thrive. And something about the US is helping them to outsource.
> By that reasoning, IBM is outsourcing from the US for exactly the same reason virtually all the other companies you listed are.
Of course. Most of the outsourcing has been about labor costs. The US has among the highest labor costs on the the planet, the nations (Vietnam, China, India, Mexico, etc) that the US has heavily outsourced to - whether manufacturing or IT - are or were far lower net cost nations to do those outsourced things in.
What's cutting against the US is mostly obvious: incomes are very high, infrastructure costs are far too high (impacts almost everything in the cost structure in the US, from transportation to manufacturing), the effective corporate income tax rate in the US is among the highest (while many developed nations are aggressively lowering their rates), vast & rapid growth in economic regulations over the last 30-40 years, large expansion of general burden on business formation over that time (taxes, regulation, red tape, abusive zoning laws, etc.; leading to far lower dynamism in the US economy, weak productivity growth, perpetually falling new business formation, etc).
And yet it’s still the top economy. I don’t buy this narrative — if regulations and taxes were such a problem, the US would have never climbed to the position it’s at.
What you're seeing isn't IBM being unethical, but more like nation-states being outdated concepts.
The IT industry is the first truly global industry. I can do my job from a coffee shop in NYC, a mountain monastery in Tibet, or a beach in Cancun. I just need my trusty laptop and WiFi access.
And yet, even though I'm the same person, doing the same work, I get taxed differently, I pay different prices for the same goods, and the cost of living is vastly different. Why should I be "allowed" to do work for IBM from the NYC coffee-shop but not the from Cancun beach? Would the product of my brain's labor be vastly different? Does me hopping on a plane and committing code from a different longitude and latitude make me a less-deserving person?
And yes, Indian jobs should get outsourced to another country - if it makes sense. Why not? Why do we have "protected" classes of people? And who gets to decide who's protected?
Software is truly unique like that - you can collaborate with people you've never seen face-to-face, different perspectives, different cultures, but all working towards a common goal. I'm not aware of any other industry you can do that.
And you expect IBM to just sit there quietly, while told, "Hire Jim, not Srinivas, because although Srinivas can do the exact same work for 1/10th the cost, Jim, being American, is a more important human being, your competitive advantage be damned" ?
I think its more just an awareness issue of one of the largest, oldest, deepest tech companies in the world, a US based company, has now shifted its employee foot-print out of the US... and yes, it is based on economics for the company, as you say.
So I think the real takeaway here is that IBM is no longer a US based company, per se - but now is just a global tech company.
And you might even say they are the first of the giants to just be simply a "lobal tech company" -- while many a startup are already "global" or virtual as it were -- its just an interesting shift in the timeline of IBM as a company.... and thus relevant and of note when looking at the company IBM itself.
I think that this is a good example of how racism, conscious and unconscious is making us worse at predicting the future. Ten years ago, so many Americans were making jokes about poor quality Indian code and Indian accents. The idea of Indians actually working innovative jobs seemed laughable to many Americans. But there wasn't actually strong evidence that Indians were less good at doing cutting edge research.
This racism is again mirrored in the huge salary difference. Are those Indian workers really worth so much less?
One thing is certain to me, that low salary is hurting IBM. By not paying a competitive salary, those IBM offices in India are lacking the deep experience of western programmers. In a way, they have to re-invent the wheel. In the pictures, everyone there is Indian, and that hurts the company as a whole. Diversity is more than just not being all white. Diversity means not being exclusive to any background and ethnicity.
Edit: I have yet to hear of anyone (European or American) from the sectors I work in, being poached to work in India.
>Ten years ago, so many Americans were making jokes about poor quality Indian code and Indian accents. The idea of Indians actually working innovative jobs seemed laughable to many Americans.
As someone who grew up in America during that time, this is the exact opposite that I was told by the media and teachers. We were taught that Indians were just as effective (if not more) than people working in the US and that we shouldn't select jobs that will be outsourced in the future (like programming). In fact computer science enrollment in many colleges were at an all-time low during that time because of outsourcing fear.
So I completely disagree with your generalization that many Americans thought Indians were worse at programming.
Yeah 2002-2005 or so the conventional wisdom is that there wouldn't be software written in America anymore -- that companies were going to beat a path to Asia just like they'd done in textiles and furniture.
Economists explained that software is a highly "tradeable good" and Asia -- especially India -- was filled with millions of highly educated cheap programmers.
Given that the number of people employed in software in America has remained constant since 2000, and that wages are about where they were then too, I think the evidence is that there has been a substantial "pressure release valve" effect going on. So while the most dire predictions of the 2000s haven't come true, it's also true that the confident optimism of the 1990s ill advised.
I would say that software development has been good to me so far as a career, but I still think I would hesitate to encourage a young person in America to pursue it.
> I would say that software development has been good to me so far as a career, but I still think I would hesitate to encourage a young person in America to pursue it.
This is absolutely terrible advice. Please do not ruin some young American's life with this advice. Technology seems to be one are where the demand seems to always outstrip supply, and a person trained in Computer Science would be capable of learning new skills and advancing rapidly in the tech industry.
I think that software is a unique industry in that it is a "self growing" industry. Unlike other industries, in which the more workers there are, the lower the pay, I think with software developers the opposite is true. I believe that the more software developers there are, the more things will be automated, and therefore the demand for software will grow with the supply.
Furthermore, since it the complexity of software grows exponentially rather than linearly, I believe that as the number of software developers grows linearly, the demand will grow exponentially ;).
San Francisco seems to be the only place where that holds true, and I say that not having tried to get a job there. The average length of time for engineers I know of trying to get a new job is 3-4 months. Any one of us could easily be a shit engineer but its in the 10s of people now. While that's better than a lot of industries now, that doesn't mean that demand outstripped supply. Its just at an ok point. If demand was much higher you'd see salaries rising rapidly at least and I know of few companies that are willing to give significant raises to keep someone vs hiring someone new. Why else is there advice to job hop so frequently to increase your salary?
Giving raises to existing employees is not related to demand and supply at all, but to other institutional reasons. Managers have more freedom to give offer higher salaries to attract good talent, than they have to offer super high raises, which can also cause discord among teams unless you offer raises to everyone, which may be more money than the manager can afford.
Of course it depends on the market, but I disagree that is just SF. Seattle, NYC, SoCal (LA, San Diego etc.), Boston, Austin all have a thriving tech sector, although Bay Area still far outstrips them in demand and compensation.
Those other factors due exist for preventing raises to other employees. The claim, however, was that demand was _far_ exceeding supply. When that happens with any good people start hoarding the resource and going out of their way to maintain their existing supply. If there was truly that great a difference between the demand for software devs and the supply of them, we'd see companies doing their best to keep their employees, at least on average. Instead we're in a situation. Where companies are engaging in some sort of brinkmanship with their employees to see if they'll accept the lack of compensation increase, and they dont appear to care if they are loosing employees due to it.
I'm a bit of an oddity in that I took summer / nighttime college courses in 1995, when I was 10, then had a job programming right during the dot com bust. Everyone said that even if tech recovered it would probably all go to India so when I entered full-time university I went so far as to study structural engineering, something I didn't think would be easy to outsource.
When I transitioned back to software I was actually shocked at how big of a skill difference the median Indian and American / Canadian actually had. The top 1% between the two cultures is similar, but the median Indian, circa 2009 when I last interacted with them, was far behind.
Maybe academia was painting a different picture than the corporate side. In my experience (inside the corporate side of things), the Indian-firm's quality was objectively so much worse than the American-firm's quality that it was laughable to even consider them on important projects.
This mirrors my experience. When I enrolled in a CS masters in 2006, I was repeatedly questioned why I would enter the field when all those jobs would be going to India.
Around that time I was one of 6000 or so laid off and the work sent offshore, at a financial services company. Anyone who'd lived and worked in that period will have seen their or their friends or colleague's jobs at risk for the same.
Exactly for the last 20 years it seems (through ignorance) many non-programmers associate a programmer (even in America) with automatically being Indian.
>> By not paying a competitive salary, those IBM offices in India are lacking the deep experience of western programmers.
1. IBM offices and most multinationals do pay competitive salary in India. We have the same problem with retaining talent in India that we have in US. Its hard to retain good programmers.
2.Thanks to US immigration system, you do find a lot of folks with deep experience working for firms in US for years return back to India. They carry with them the best practices that they learnt in US. Some of these people also attend US universities.
3. At least the big fives (I don't know about IBM) have consistent coding and code review standards across geographies and use similar frameworks, deployment and monitoring tool chains. So there is not as big of an impact as you think on coding standards across geographies, be it Dublin, Sydney or Bangalore. It usually tends to be the same.
But those policies derived from American companies. Say Indian Programmers takes those policies and apply them, will they become the next trend setters in the entire IT industry or will smaller engineering companies continue to set the trends and standards in the USA?
I'm still banking on American workers to prove these companies wrong via innovation from within our borders, boycotting software companies who offshore American innovation and unionize or something to that effect to protect American workers here.
My thoughts are not about race, creed, religion or anything against India or Indian Programmers, it's about protecting American workers for American families here and in the future.
It's not racism, it's the fact that India's tech sector came up so quickly, there were so many engineers, probably not all with the same level of training, that lots of code probably was crap. Not because Indians can't code, but because the industry wasn't as developed as elsewhere. Obviously that can change over time, and it has.
> This racism is again mirrored in the huge salary difference. Are those Indian workers really worth so much less?
Corporations pay people what they'll accept. Since many Indians are essentially doing salary arbitrage between what they'd make in India and the US, they'll accept less. Also, cost of living in India is much lower.
Literally none of what you've explained here is a result of racism, just economics.
Just a thought about the "huge" salary difference. Are you taking the Purchasing Power Parity(PPP) into account? I know that PPP is too macro for comparing very specific cases but it does steer the discussion in the right direction.
Let's say, an engineer's monthly salary is $10,000 in the US and he can afford X level of arbitrary "comforts in life". To be able to afford the same X level of arbitrary "comforts of life" in India, he'd need just $3000 - $3500.
These numbers are for illustration purposes only. Actuals will vary. of course.
No amount of salary will give you clean air and tidy streets. Some people will just prefer that as part of their package. But I guess few months / years of experience won't hurt westerners.
When you talk about PPP, keep in mind to factor in housing and other modern lifestyle conveniences. These are very very expensive if you price it as a percentage of your salary. Even in the Bay Area, a Home is still 5-6X annual income of a typical software engineer. In India, it is more like 10-15X.
To give some idea of the market - people are starting to count stock options as future income in order to qualify for home purchases. The median home price that sold recently in San Jose is close to a million dollars.
5-6X will not get you a nice house in a nice area. It will just get you a small house. In San Jose, the cheapest ones I'm seeing are in the 500-600K range - smaller than 1000 sq ft.
as a counter to that, in third world countries, rent is often a way better deal all round, so if you're not hung up on home ownership, you can get by pretty well for less.
This is most certainly not true. I don't deny there will be shitty houses for a drop-dead rents, but you can also get a fairly luxurious rentals in Mumbai and Bangalore, at least (I don't have personal experience with other cities).
Companies try to do that in America where they justify your income based on the fact you live in an area where you have high PPP. (Urbana,IL vs Palo ALto,CA)
That doesn't make it right to do or that this behavior will get the high quality talent pool every company says they will hire. So why do you think that it will work in this case?
It's not like the stereotype is entirely fabricated. This was created by how Indian workers were used by corporations -- to cut labor costs without much regard to the quality of work. If they're doing the same thing in their Indian offices, it's not going to do them any good in the long run.
I've actually worked with and managed international teams for a number of major consultancy companies and outside of silicon valley I don't see much difference in skillsets and proficiency between the US, Europe and India.
That surprises me, given you say you've been working with major consultancies.
I've been working with and leading international teams for almost 10 years now, mainly with teams in India.
I see a huge gap between skillset and proficiency between the US, Europe and India. But I must qualify this - I've most been working with some of the large outsourcing companies in India, Capgemini, Infosys and Cognizant, and these companies are where you find unbelievably bad coders. I often literally have to interview 20+ candidates before I find anyone even half decent, and even then, the level is much less than a candidate with similar time-served from Europe or the US.
This shouldn't be surprising if you see how such companies run development projects when left to their own devices; they will staff a project with 5-10x more devs than would be used elsewhere, and everyone works on an unimaginably narrow part of the project - someone might literally do nothing but write maps for the ORM, another person might do nothing but edit config files. It's madness.
I have however had excellent experiences with Indian devs on the rare occasions where I've been permitted to use small, development-focused businesses. Excellent developers absolutely exist in India - but they are as rare as hens' teeth the big body shops.
I like that you're upfront and detailed about your experiences and do not generalize. Much appreciated.
I should tell you that these big body shops have a reputation for hiring really bad programmers, basically because they have "processes" that they use to turn these people into problem solvers in very specific domains. More often than not, that is what their clients want as well: human eyes on a system designed and written by someone else. When in college, these were known as "bus" companies, because they would give job offers to a busload of students, but all the offers were pitiful and the work horrible.
Just like you noticed, if you want to see real talent, look elsewhere.
Thank you. This always bothered me as someone with Indian background. It seems like some programmer make assumptions about my code and I have to do a lot more to gain acceptance in some companies/teams.
But on other hand, I have a theory. Indian firms write a lot more code. Their code quality distribution probably is same as any other group but since there is more code, a large percentage of overall bad code comes from India.
It is kind of like some teams in a large organization write a lot of code but they are the one with the most bugs and they get punished. Another team that rarely has bugs but they don't write as much as code as others and are rewarded for introducing least number of bugs in production.
I will chip in for what I feel about the supposedly bad code quality problem. Most of the US firms which outsources to India is looking for work to be done in an unreasonable amount of time. To make my point clear, if a story takes 8 points, it should be done in India for 3 points and at 1/4 the cost & hence. Both firms (outsourcer & outsourcee) are to be blamed for this (to look good on their Q4 reports). Not the programmer.
I guess that's because we get more Indian referrals from a team with more Indians. At least my current team is dominantly Indian because of this reason.
Also, I personally feel there is fundamental difference is how Indians interview the candidates. Indian interviewers usually try to identify the weakness of a candidate (if there is a fullstack opening and the candidate's strength is more on the backend, the interviewer leans more towards frontend to identify the weaknesses of a candidate). Non-Indian interviewers most try to find the strengths of a candidate. When I attend interviews and see a panel with Indian names, I know that those slots suck.
Of course exceptions apply for everything..just my observation being Indian working in Indian teams..
True, and it's true for other nationalities (Asian specifically) too. It's a shame that we talk about merit and behind the scenes it's all a sham with with cutbacks and shady hiring practices (and I'm saying this as an Indian citizen in the US).
Let's not forget a Western stereotype from 10 years ago: the deprecated specialist. Since the 80s, IBM has had a lot of bloat from poorly managed technologists who owned "the JDBC-based plugin for integrating AIX-based Lotus Notes servers with a COBOL-based mainframe that is only used by JP Morgan and the state government of Ohio".
Despite the risk, it's easier to toss these responsibilities to a junior-level developer overseas than to maintain a 20-year veteran in the New York office.
On the other hand, they've probably had a lot more early exposure to the idea that one is better off changing jobs every few years. After having three jobs in ten years instead of one, they're much less likely to be stuck with a non-transferable skillset.
So, you are saying that maintaining, some shit code written in the 70s and maintained by 10s of enterprise programmers, will result in better experience?
In the tech sector at least, the relative salaries of employees located in India is still significantly lower than those in most America metropolitan locations.
This overall reduced cost to a company is significant enough to invest in the market. As India is still considered a developing country, the quality of life, while debatable, would be considered a downgrade for many who could potentially be poached from other regions.
"the quality of life, while debatable, would be considered a downgrade for many who could potentially be poached from other regions". Why would it be a downgrade. If they paid an American $120k a year to live in Bangalore, that would buy the American a nice villa, pay for several servants, and allow for frequent travel. In SF, that same money gets you a shoe-box apartment.
I guess you could also use that money to buy a diesel generator so you don't suffer from the daily power outages and you can buy a great water filtration system so you don't have to worry about ever drinking unclean water either.
Much of Bangalore and modern Indian cities are almost at par with San Francisco as far as Infrastructure goes. How do I know this? I travel to India 3 times a year for work.
Sorry you are so wrong. What do you consider infrastructure? I have lived in the bay area and in Bangalore, I have no idea how you can even compare them in terms of roads, city planning, utilities agencies, Civic agencies etc. I think the exchange rate of your country's currency allows you to stay at top tier places when you visit India, that's why you'd experience India differently than Indians.
Living in Prague, I visited the Bay Area recently. I've never felt more like I was in a 3rd world country. Not even when I was in the norther Czech Republic which is in REALLY bad shape. I mean, have you been to oakland? The place looks like a war zone.
I would agree with you if you would have compared Austin to Bangalore. But the fact is : San Francisco is in as terrible shape as Bangalore is. So moving from San Francisco to Bangalore would not lower your quality of life at all.
>I think the exchange rate of your country's currency allows you to stay at top tier places when you visit India, that's why you'd experience India differently than Indians.
I live in Bangalore and I'd say he's correct. Bangalore might be better compared to other Indian cities, but nowhere near the level of a American city. There are issues with power outages, water quality/shortage, absurd traffic jams where you'll be stranded for hours, costly real estate and even rent.
My point was, that they should pay westerners that kind of money to move there, in order to pull experience in. India has plenty of talent, but they don't have so much experience.
> This overall reduced cost to a company is significant enough to invest in the market.
Tech companies are especially inclined or incentivized to offshore work because their highest cost/liability sinks are their employees. Other sectors, a significant portion of their costs/liabilities are equipment, supplies, etc. Tech industry is unique in that their employees are their biggest liabilities.
I know that tech companies have been struggling the past decade+ on trying to rein in their employee costs. HR departments have trying hard to lower employee costs.
The move to bring in more women and minorities into tech is a commendable goal by FB, GOOGL and the tech industry, but it's also driven by rising employee costs. It's not spoken about widely and openly but these companies are desperate to get control over rising salaries/costs in the industry.
Diversity is a great way to maintain and lower employee costs that have political/social benefits. Another way to lower costs is offshoring, but that has a lot of political/social costs.
But profits are profits and costs are costs. The industry isn't going to stop offshoring because of bad publicity given how much they stand to gain.
Taking the commentary in this direction is unneccessary. In the 90s, the rise of outsourcing originating from the US and the rise of US-based H-1B-farms raised valid questions about the difference in production quality (in the historic, 'what-kind'-ness sense of the word); the wages paid in foreign countries with lower prevailing wages were predictably lower, as otherwise offshoring would have made little financial sense, and importing exceptional talent from overseas was always an option for those willing to pay for exceptional talent.
IBM and other US firms do in fact pay locally competitive and generous (but not outrageous) salaries in India, as well as other foreign talent hotspots like Romania and Estonia.
> Ten years ago, so many Americans were making jokes about poor quality Indian code and Indian accents. The idea of Indians actually working innovative jobs seemed laughable to many Americans. But there wasn't actually strong evidence that Indians were less good at doing cutting edge research.
Where are you getting this info from? I have grown up in America and never heard of this.
I don't think IBM is a good example, because they've been exactly the kind of low-quality Infosys style body shop that people make jokes about. The only difference is that IBM is mining out their reputation (built up all through the 20th century up until the 1990s) in order to charge inflated prices to clueless enterprise customers. Remember, they were the ones that charged the TSA $1.4 million for a left/right randomizer app. If you've ever used a piece of 21st century IBM software, you probably don't remember the experience fondly.
There are companies doing great work in India (Zoho comes to mind). Why would anyone want to use IBM as the representative of Indian innovation?
> I think that this is a good example of how racism, conscious and unconscious is making us worse at predicting the future. Ten years ago, so many Americans were making jokes about poor quality Indian code
They were once... They invented entire industries single-handed once. Now they are just trading on their old reputation, which they haven't deserved for over a decade now.
Racism isn't based on facts. BUT, Indians and [insert third world country citizens] do great--in a country like USA.
Question: Now IBM charges probably $300/hour per programmer. Even if it is $100 and I understand that not every hour is billed, but why isn't IBM making way more money given Indian wages?
Every Indian I have worked with in the US has been reasonably competent or better. Every Indian I have worked with remotely from India has been worse than useless. This suggests the hypothesis that the problem is with the work culture, rather than intrinsic to the workers.
And that suggests that IBM is not making more money because IBM's work culture has not adapted well to changes in the global economy. It may be that they have shifted to India workers because they are no longer capable of monetizing their workers to an extent great enough to pay competitive salaries in the US, rather than some factor resulting from their reliance on India. It could also be both, creating a vicious feedback cycle.
In short, problem is that IBM is IBM, not that IBM is full of Indians.
the problem is brain drain. asia does "send their best" because the US only accepts the best from asia. having oceans between you allows you to be picky.
> Ten years ago, so many Americans were making jokes about poor quality Indian code
did they? either way, i think you're equivocating. it's not a "racial" or "ethnic" connotated "indian code" that some people sometimes discuss. it's more in the domain of economics, geopolitics and "IT body shops". everyone has seen brilliant indians accomplishing great things.
> The idea of Indians actually working innovative jobs seemed laughable to many Americans.
this seems like a strawman. ten years ago, people thought IT in america would cease to exist in any meaningful capacity because of outsourcing.
> This racism is again mirrored in the huge salary difference. Are those Indian workers really worth so much less?
this doesn't make much sense to me, so some clarification would help. you cannot directly compare an absolute number in two economies. you can't even meaningfully do it between (say) san fransciso and knoxville.
> One thing is certain to me, that low salary is hurting IBM. By not paying a competitive salary, those IBM offices in India are lacking the deep experience of western programmers.
again, you cannot pay a salary that is absurdly huge and completely incongruent with the local economy - be it within india, the us or any other place. at least, not on a large scale. if you payed a wage translated directly from san francisco to india, your purchasing power would be massively inflated over the vast majority of people with "normal" salaries.
it also means that the burdens and inefficiencies of international work would not be offset, and so IBM and others probably wouldn't even be there in the first place.
> In the pictures, everyone there is Indian, and that hurts the company as a whole. Diversity is more than just not being all white. Diversity means not being exclusive to any background and ethnicity.
it's india. talking about "diversity" and "white" as you are doing is just... well, it seems rather ignorant, parochial and prescriptive.
> Edit: I have yet to hear of anyone (European or American) from the sectors I work in, being poached to work in India.
unless you're planning on staying permanently, it's not an economically advantageous thing to do. not necessarily because of the salary relative to local norms, but rather when you return to a the US or Europe or wherever, your savings accrued will be less than if you had stayed.
>Ten years ago, so many Americans were making jokes about poor quality Indian code and Indian accents
It's hard to not fall into this trap in certain fields of IT. To the point it's almost not regarded as racist
Though as a Systems Admin, outsourcing is considered more of a joke than anything. The lowest bidding contractor wins, and the people they hire are absolutely abysmal.
If contracting companies did the same thing, but hiring a 100% "American workforce" (or British/Australia/etc), and they did an equally mediocre job, I'd suspect the derision would shift accordingly
There's a lot of smart Indian people. They're no "better" or "worse" than the rest of us. They're just a larger sample size that get tarred with that brush
>This racism is again mirrored in the huge salary difference. Are those Indian workers really worth so much less?
Nobody anywhere in the world is paid what they are "worth". They are paid whatever is necessary to keep them at the company. In other words, as an employee the competition is other employees in the same market.
It has nothing to do with racism, that's just intellectually lazy.
>By not paying a competitive salary, those IBM offices in India are lacking the deep experience of western programmers.
Paying a higher salary doesn't suddenly make the Indian workers smarter. It just makes the job more attractive to where the stronger experience is (currently the US).
I am a foreigner who works for an American customer and I freely admit that I am not as productive as one of their in-house developers. This is because of things like communication delays, lack of documentation (of both their code and their business logic and practices) and generally the overhead of being in a separate team.
Now that IBM has more people in India than in the US, maybe they will find that they face the opposite problem: US workers will have to adapt to their Indian counterparts instead of the other way around, so it will be more productive to hire an additional Indian than an additional American.
I did not even want to comment but I have to.
You are very xenophobic towards americans. Every developed rich nation has this attitude when it comes to outsourcing and offshoring.
But all of it is just anecdotal evidence (it goes both ways).You are not only forgetting about how economics work but also evidently omitting how that happened that US is so rich and can afford paying such salaries.
I really do not want to elaborate more but todays tech companies create such huge social disparities in India that literally everyone wants to work in IT just to uplift himself from "3rd world poor" to EE standards.
I am "xenophobic"? I was born in America and lived there the first 18 years of my life. I'm trying to not merely generalize, and therefore I went out of my way to cite an actual example of the attitude in question.
Honestly I'm surprised this is just now the case. Last time I was in Bengaluru(Bangalore). There were ads on billboards for programming jobs. Everyone walking down the street had backpacks from major tech companies. The sheer number of tech work there has to be massive
When I worked with IBM through Lockheed as we were doing the RFID system Lockheed was selling to DOD and DOD-subs...
It was a freaking nightmare of a process just to provision a single firewall rule... Sure thats a famous old saying about IBM -- but my personal new one is that I would never hire their professional services for anything after that experience.
As lots of people know that IBM gets 21 consecutive revenue decline and it's forced to cut down cost. But cutting down cost doesn't mean you should shift your development work to under qualified developers or programmers. This will further affect IBM's software quality and hurt its revenue. Why not putting the money hiring less but good developers. If you are a developer, you would find what that feels like to work with under qualified developers.
To be honest, have you heard about any impressive software product or solution from IBM in recent years? I would blame this to a short-visioned management team. Maybe its management team is thinking they could hire more below averaged developers with the same money of hiring one good developer in hoping that quantity can cover quality. In fact that's totally wrong in technology field.
Moreover, those talented technical people are escaping because they are not getting what they deserved. The management team is investing far less in technical talents than in so-called business. The end result is that the product quality will become worse and worse and customers would finally give them up.
While other companies are attracting talented IT people by all means, IBM is lost and it's driving them away.
A lot of assumptions and bias in the comment above. You are implying that more expensive means higher quality. Less expensive means lower quality. Both are not true.
The truth is, "opensource software and cloud" disrupted IBM's business model of selling proprietary software that runs on IBM hardware and selling services to maintain these.
Sorry, you misunderstood my point. My implication is that we should spent the money on the right people. For example, if we have budget of $10000, we can spend them hiring one/two good developers instead of hiring 4/5 below average developers.
Why? The company has reported declining revenues for 21 quarters -- more than five years -- is shedding tens of thousands of staff, doesn't generally pay high wages, has no market-leading products, and has a less sexy image than Apple, Amazon, Google, Facebook, Microsoft and practically every other significant IT company.
(I did say American developers, not Indian developers....)
Because talented engineers don't want to work on the typical things that get outsourced, such as maintenance of legacy applications, helpdesks, implementation of dull ERP projects and so on. Therefore on average the quality of programmer at an outsourcing company is lower than at a real product company, and this would be the same at any outsourcing company in any country. It just so happens that some locations are cheap enough to make hiring large numbers of low quality engineers seem more attractive than fewer, high quality engineers payed sufficient salaries to attract them.
I have been a close observer of code coming from India. I think the majority of the problems are because of vague, incomplete, and wrong requirements coming from the company that hired them. One company sent over someone. The guy spent a month talking to management, employees, probably the janitor and figured out what we actually wanted and the resulting code was decent.
This is part of the problem, and, in fact, part of the work of a software developer: given ambiguous and stupid requirements, you work with the customer to 1) make them clearer and 2) get rid of the unnecessary, complex requirements that do not bring any bussiness value. (My experience here shows though that it's not a standard thing in Indian culture to question the status quo).
There's a lot of implicit requirements that need to be taken into account when writing code: maintainability, security, performance, user experience, accessibility etc. It's better if everything is explicitly stated, but we don't live in a perfect world unfortunately. (My experience here shows that those implicit requirements are often not well executed, particularly when it comes to front-end code, due to a mix of: lacking experience, time pressure, different UX sensibilities).
Maybe it was just the firm I worked with, but they got the same requirements doc that the software was eventually written against using an American outsource firm.
The Indian firm wanted requirements so detailed that I had to tell them where to put the for loops and while loops. It was faster to just write the code myself than explain such easy details.
That is the problem with outsourcing in general: much of the work a development team do is figure out what the problem really is and how to solve it. The actual coding part is easy in comparison. But the business people didn't really see this, and....well...the results were predictable.
If a spec isn't vague, incomplete and wrong then you could just make a compiler that compiled the spec into working code and skip the programmer.
The job of a programmer is to map the vague notion of what the software should do, which is reflected in the spec, into a concrete, internally consistent set of instructions to the computer.
Not the OP but I can likely offer some insight as someone who has had to deal with teams in India: The biggest problem was the employee turnaround rate. Getting a developer, even an experienced one to become fully productive in your organization if you have several or complex products is a process that can take over a year but the turnaround rate was high enough that there we needed to use a very significant amount of resources dedicated to training and keeping communication and quality flowing smoothly because having people who weren't veteran enough to be able to handle themselves and figure out the business case behind the task and user story was a constant state.
I haven't dealt with IBM, but I have been in charge of outsourcing before. Early on we used Indians, but it became expensive so we moved on to the Philippines. Both had the issue you're describing. If you found someone good they would be gone in a few months for more money. I remember arguing with management above me because I wanted to pay a person 40k instead of 35k (I think those were the numbers, it's been awhile) because he was good, and communicated well (another issue). I was overruled and as soon as this person became proficient, and presumably found a better paying job he never showed up again.
Eventually I convinced management that even if we had to pay 2-3x for a competent developer stateside, it was worth the money because of the hidden costs of trying to outsource. The work we were doing required someone to be invested in learning the business and the problems we were trying to solve.
Of course. The point was that outsourcing was 'supposed to be cheap'. The reality is that for many situations it is not cheap, and is less expensive in the long run to pay a dev 100k or whatever the local market rate is instead.
The outsourced guy would eventually figure out that he is been paid way less for more or less same work. so they would move to better paying job. You would need to find a amount which is cheaper then US but way more then local market.
IBM has been arguably lost in the woods since the mid 90s, it got worse when they took over a consulting company who then convinced them to optimize for short term profits. Then it just gets worse from there.
I am just curious.. I havent purchased a single IBM roduct for maybe more than a decade (professionally and personally) -- the last major professional purchase was an AS/400 upgrade... 1998?
I have never bought an IBM-->lenovo laptop, although I have been provisioned some in various jobs...
What other main product(s) does IBM have that I would want?
they have great eng resources, scientists, etc... but I just dont see any of my money headed their way any time soon...
IBM is a massive consulting agency and they sell people's time and expertise to other companies. Customer projects, resource augmentation. Similar to Accenture and others.
The problem is that you will fall behind if you cannot transform your research into real products. Just like the smart planet idea, this idea is very brilliant and it was proposed around a decade ago, however the business around is a failure because of execution failure. Nowadays we are seeing other companies working on smart planet while IBM is changing to cognitive. What can we expect from cognitive?
Some personal thought, execution is key for business success now.
IBM SPSS is a product maybe not sure for you but IBM pushes a lot among Data Analytics Practitioners. They had their legacy in Market research companies. But democratisation of R and Python ate up a lot of market share from Sas and SPSS. Nevertheless still a lot of companies who used SPSS are still using it. It's an irony that IBM failed to capitalise the hype of Data science.
Those irons are only a small portion of IBM revenue now due to cloud. But they haven't put the correct resource on cloud and software. It was working in the past even though its software is very difficult to use. But now it's the other way around.
Liberty profile isn't exactly painful, but everything else Websphere is.
Regarding DB/2, I don't think that the installation process is the most interesting property of a database. The database is about as good as you can get, but there are certainly other options.
I tried installing WebSphere portal ten years ago for some reason and that killed my laptop. I'd say that that's probably the best possible outcome...
Oh, and I think TAM/TFIM/ISAM might be ok for companies over a certain size.
Not sure about their cloud offerings. Probably not promising.
Badly. They've lost many clients because of it. Disney was one of their biggest; they jumped ship a few years ago due to constant missed deadlines and poor work.
I used to work for IBM. We had a few workers in India who were decent to good, but most of them are just seat warmers. Their work was abysmal and required frequent re-doing.
really? I distinctly remember Disney doing the exact same thing, to the point where they paid their current employees to train their own offshore replacements [0]
20 straight quarters (from Arpil this year) of revenue decline would tell me IBM has problems, though they may have nothing to do with where they source the labor from.
The discussion seems to be diverted to outsourcing; whether it is good or bad. If I were an IBM shareholder, I want to know who is holding the IBM execs accountable? For years they have underperformed, whatever metric you care to use to reach that conclusion; they seem to be unaffected by outsourcing and have golden parachutes.
To hide their technical/execution incompetency they outsource jobs and cook the books. It is moot to discuss outsourcing, the real problems are:
1. The widening wage gap between a regular employee and an executive
2. Complete lack of accountability of executives
3. Despite their pathetic performance are getting richer and richer
It's a multinational corporation, I don't see a problem with it on a surface level since they have no real obligation to maintain some arbitrary percentage of American workers. The current climate of companies needing to continually push down cost to compete is the new normal and there will be various ramifications as further globalization opens up more cost saving opportunities. Maybe it will hit a turning point where we reevaluate how the health of firms are gauged but I doubt it.
The thing that bothers me is not so much that technical and implementation work goes straight to India and manufacturing goes to China, Mexico, etc.
The thing that bothers me is that there's so many goddamn "project management professionals" state-side. It's like now students are coming out of college and going straight into project management doing bullshit work. American industry is in a downward spiral, we're training our competitors. These "low-cost-centers" are going to eat our lunch at some point in the future. They will be lean, efficient, creative, business savvy, and ready for anything. In the United states we'll all just be a bunch of useless PM's and supply chain specialists who can barely do more than work a phone. It will be like taking candy from a baby. Of course the execs that forced all this will be retired and living filthy rich by then.
Ha, I have a MIS BA actually. Most of my former classmates took the PM/BA route post graduation and generally all are successful according to Linkedin including a guy who runs his own investment bank and another pretty high up at Amazon apparently. I think so many people go that route because people who can "speak tech" and "speak business" are incredibly valuable now days. At least that's the reasoning that sold me on it, despite me now being almost completely technical. I have personally seen individuals on the same team with similar skills have careers diverge dramatically because one person could present in front of a room and another couldn't. The PM types are on the front lines and get all the credit because they are "selling" the product or business. I get why it's attractive to some.
> The current climate of companies needing to continually push down cost to compete is the new normal
In which reality is that a "new normal"? Companies have always been about profit maximization. The only thing that's changed is that we let them get away with more than we used to.
This one. It used to be that you would boost profits by innnovating and launching a new product line, not liquidating business segments. Instead of focusing on growth, corporate America is now preoccupied with trying to squeeze water from a stone. IBM has sold off countless viable profit centers in the interest of "streamlining" to the point at which there isn't much left of the company's former product line.
Innovative Bangaloreans and Madrasis (Madras is the old name of Chennai and Madrasis refers to people who live there). IBM has huge presence (8-10 Offices) in Chennai.
What regulations have gotten strict? From last I read, the changes that Trump proposed seems to have gotten nowhere. Yet IBM has been shifting the worker base to India for decades.
> the changes that Trump proposed seems to have gotten nowhere
Revisions to H1B are "under review". It may all be just smoke and mirrors but it would be an easy, and legal, way for Trump to meet one of his campaign initiatives.
EO 13788:
(b) In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.
I have researched H-1B heavily (because I was transitioning into it myself). I don't think the regulations have changed whatsoever in the last couple of decades. If they have, I'd love to hear in what ways.
For those working at IBM, how do you feel about your job in general? I have a couple friends working for IBM now or before, from what I gathered, unless you work in the research division or in the smart city project, the rest felt unimportant. These negative sentiments perhaps just edge cases...
IBM is best understood as a collection of disparate companies that have very little to do with each other in the day-to-day. There are generalizations to be made about the company as a whole, but the experience of working for IBM in division ABC is going to be vastly different from the experience of working in division DEF.
Sadly it seems IBM is mostly a sales & marketing operation for high-markup low-quality IT labor. MBA management of tech as a cost center has reached its next milestone. Of course, in the long-run, a company can't succeed by gutting its core competency.
H1B lottery-based system is crap. There should be deterministic, points-based, uncapped immigration scheme tailored for highly skilled and paid talent, similar to Canada and Australia I believe.
I am an Indian and i will tell you how it is. Most indians in india and the valley where i live and work suck in programming. I can't say how i do because we can never judge ourselves objectively. Indians in India write bad code because they will they are being cheated and being paid less money. The other issue is the education system is to memorize stuff and get a job so they can make money. There is no passion to do great or decent work. The end goal is to keep a job and make money. The same is true for people who work for google or amazon. They memorize the damn interview questions and get the job. Now all this is my experience with majority. So don't ask me for a study. I am sure there are exceptional programmers, founders that are Indian but majority aren't.
Majority of programmers are bad. It is nothing to do with race or nationality. People are taking to programming because it pays well and there is demand. Most companies hire a person with good attitude than a great programmer with bad attitude.
"People are taking to programming because it pays well and there is demand." This statement is wrong. Not everyone takes to programming only for that sole reason. In america people tend to follow their passion first.
Passion doesn't guarantee quality. I have seen "passionate" engineers, failing to understand the problem. "Passionate" engineers tend to find a problem for the solution they have at hand. It is very hard to work with such people.
Why is IBM outsourcing then? It's not just about money. They can't find an American to do that job. Americans get paid more and can find more interesting work. Plus, Indians are really good at delivering code fast of inferior quality. Americans like most people here delve too deep in stuff and are slow at churning code.
I find it disturbing as an American software developer that Americans (mostly) created companies like IBM and all their products, but since IBM has basically missed the boat on every major technological breakthrough over the last 30 years it's no wonder they are doing anything they can to stop the death spiral. I hope IBM goes out of business as quickly as possible and before that happens they should move their HQ to India.
Is it time to start talking about unionizing software developers? To protect their jobs, creative freedoms and the rampant ageism that exists in Silicon Valley?
At a high enough level a company's customers and employees are one and the same. Exploiting labor can lead directly to a tragedy of the commons. If all companies were able to pursue the cheapest labor possible on a worldwide scale, then the overall disposable income in this nation would proportionally decrease. That income is precisely what ends up being used to purchase a company's products and fund their ventures. In the big picture - when all companies pay less, they end up earning less.
This is also ignoring local effects. As domestic workers are displaced by the cheapest workers across the world, unemployment would increase. As wages decrease and revenues fall you have the ideal scenario to start an economic depression. Rising unemployment and an economy in depression is something that is extremely difficult to stop once it starts. Fear of even the hint of this happening is part of the reason we're already flirting with ostensibly insane economic measures ranging from quantitative easing to negative interest rates.
Cost of living is still higher in the US, so you have to pay them more in the US than in India.
The actual question is if these increased salary costs are offset by productivity improvements from not having to communicate across timezones etc. There's probably no single answer to that.
I've heard some B-school grads refer to this as some "inflection point". They were talking about more overseas workers for IBM in 2006 or so. The more important question is in which direction does the money flow?
It has to be net positive for the US albeit not to US upper middle class programmers. My simple rule of thumb is if the move is not filling up CxO level coffers, it won't happen.
If $100 million flows from AT&T to IBM. And IBM pockets $10 million and sends $90 million to India, that would be a net -$90 million for the US economy.
That's assuming the $100 million flow in question can happen at all without the India piece of the puzzle. Another way to think about it might be "$100 million wealth flowed (and taxes paid on it, and salaries paid, &c), $90 million of which goes to India, vs. $0 wealth flowed (and so no taxes, no paychecks, etc.)" A lot depends on the accounting of where AT&T got the $100 million at the start of this story, and what spending that $100 million enables AT&T to do, whether this flow turns out to benefit both the US and India, mostly the US, mostly India, or neither.
One would hope that AT&T gets and IBM get something for their money. If the flow is $100 million to IBM, and AT&T nets a $200 million value from workers in India, maybe it is still a net flow to the US. If the US can trade a simple change in a computer record (a US dollar transfer) for stuff it wants, seems like a net positive. Economics is a complicated system with lots of feedback where the actors in the system can change the system itself.
What's missing from the discussion here is the business that IBM receives from the United States government-- Billions of dollars in contracts. If you are unhappy with IBM's practices, let your elected House officials know why. They may be able to do something about that.
I wonder if this might have a reason why the Phoenix Payroll system was such a disaster. Originally the estimate was for $5.7 mil but somehow it is now costing 32x more (~185 mil)[1], mind you, this is Canadians tax-payers money :(. Not to mention the ball they dropped with Queensland (beyond any software horror story I've read to date).
It must be difficult having two hugely different cultures & work ethics trying to work in synchronicity to complete this type of project. (I'm only speculating that the project was done by their India teams and not the US/Canadian teams)
Considering this, how is the number of employees in India and US even a relevant question. Isn't it similar to say why is there more manufacturing workforce in China when compared to US for company X? We know why, it costs less for the company and the client, and taking advantage of it opened up new markets/demand.