The IT Market: Cyclical Downturn or New World Order? 1119
An anonymous reader wrote: "CNN.com is running an interesting story on the heels of a Forrester
Research report concerning the
shift of high tech jobs from the U.S. to places like China, India, and Russia for cheaper labor and got me thinking about the nature
of the current downtrend in programmer demand in the U.S (as opposed to the "morality" of such a shift). While I'm sure the causes for this downtrend are variable, the more important
question in my mind is this -- Is software guru Bruce Eckel correct in
saying that the current downturn represents a temporary blip in the business cycle as jobs are shifted from large and medium companies to smaller companies,
or are Andy Hunt and Dave Thomas correct in recognizing this as
a new reality. Personally I tend to agree with Hunt and Thomas's view (which is not completely opposed to Bruce's opinion, btw) and
I also agree with their viewpoint that protectionist policies like H1B quotas and tariffs won't work to change anything for the better. So what do you think? Is this
just another business cycle or is this a New World Order in IT?"
Market adjustment (Score:5, Informative)
Globalization is the great leveler (assuming free markets). It takes time, but eventually, everyone gets paid what they're actually worth as opposed to what they think they're worth.
The secret is to make yourself worth more. Probably a meaningless admonition to most slashdotters who think that the world owes them a living so they can spend all their time downloading files from Kazaa.
Re:Call Centers and the Like (Score:2, Informative)
And it's not just level 1 support, either.
Re:Watch out for phonies (Score:1, Informative)
Sweet. (I would've modded you down, but how can I go against a tide of clueless moderators?)
Sad Truth (Score:5, Informative)
Re:Call Centers and the Like (Score:2, Informative)
> other jobs for which no skill is required.
That is just completely misinformed and inaccurate.
Much software development work has already gone overseas to India and Russia. They work at about 50% of the rate you have to pay a programmer in the US.
That work is never coming back to the US economy. New software development and QA jobs are going overseas faster than they are being developed here. The skills you learned in college don't help with this.
It is not unusual to see ads in the Silicon Valley paper (Mercury News) for software management jobs in Bangalore. They are trying to lure home Indian expats.
Things are ugly in the world right now.
TODO: Workflow and Training (Score:4, Informative)
From my consulting experience (large and small companies), I've seen two areas that need major improvement: workflow and training.
They're actually strongly related. Many companies are just now basing a significant part of their business processes on technology. They've been gradually moving this way for some time, but it's at the point now where a tech catastrophy would seriously hurt them. However, they're still only taking advantage of perhaps 10 to 40% of what's technically feasible and also practical. There's still quite a lot of double entry of data and shuffling of papers.
So the workflow side should see a continued increase in technical development for years to come, and this will require services of "experts" of both the problem domain and technology solutions.
Training is the other area that should see continued and hopefully increased rate focus from businesses. Most users (and their bosses) approach computers and software as they approach a rental vehicle. They don't typically get much or any formal training, and they don't spend much time with books or manuals.
They're just scratching the surface of what much of their tools could do for them. Many people need broad and specific training to really make their technology work. An example of this is MS Exchange and Outlook. (I'm no fan of these, but I use them as example since they're ubiquitous.) Most business users can send and receive email, possibly with attachments. But most never touch their calendars, public folders, etc.
So maybe development is moving away, but there exists a big vacuum for other tech-related services, and those are going to stay right here in the US, if only because they often require personal contact.
MOD PARENT DOWN - PLAGIARIZED! (Score:5, Informative)
People are People (Score:2, Informative)
Wired just ran an interesting article last week about Indian IT workers falling apart after long hours. IT Sweatshops Breaking Indians [wired.com]
Everyone has thier breaking point I guess.
Re:Fundamental shift (Score:1, Informative)
Exactly... I have seen this happen first-hand. Offshored projects require the design to be explicitly spelled out in extreme detail, otherwise you get something that is not only broken, but it doesn't even try to do what you wanted in the first place...
Re:"protectionist policies like H1B quotas" (Score:2, Informative)
The EU is a good example - they simply don't allow guest workers in anywhere near the scale that H1B allowed. And just try to immigrate to Germany and see how far you get.
Biting The IT Bullet (Score:3, Informative)
My wife who is a QA tester, had to work for a company that moved all there QA to India and it became increasingly more and more difficult for the developers who were Indian to work with the developers who were American. Aside from that, they didn't understand goals and expectations for the product and ended up giving them something much different that what was asked for.
I think tech support, customer support and other low-tech things like that can be moved but in the long run, if you are willing to commit to a presence in a foreign country, you are better off sticking stateside... or trying Canada. :)
The Reality of it All (Score:2, Informative)
Re:The Economics of Empire (Score:3, Informative)
The Economics of Empire [mindfully.org]
Michael. [michael-forman.com]
reality strikes (Score:5, Informative)
Solution? Use an Indian company to do the job! C++ IS C++, after all. Within a year, they were back at square one. I have another friend that is interviewing and testing Indian developers for a proposed India-based development lab. Result? Very few were able to answer half the questions correctly (mid-level Java developer-type questions).
So, quality does kick in at some point. India is NOT the IT panacea some have hoped for. I still think we'll see some more outsourcing, but it isn't the end of IT as we know it. Not every company can do this kind of thing.
On the executive point, yes and no. There are a LOT of execs who are part of the good-ol-boy system. Those who are good, do a great deal more. But the squids...
Anywho, my opinion...
Very little loyalty in buisness to our nation,also (Score:2, Informative)
Big buisness uses H1-B and L-1 visas to hire employees that they can pay well under the going rate for U.S. citizens. Small buisness doesn't have the overseas connections to hire folks with this so it only serves to give big buisness even more power over the start-ups.
Additional information on H1-B and L-1 visas:
Washtech.org [washtech.org]
L1s Slip Past H-1B Curbs [eweek.com]
Re: H1B and L1 visa influence US unemployment [swanh.org]
After H1-B visa, L1 now bytes IT [mid-day.com]
Outsourcing Trend (Score:1, Informative)
As for credibility, I cite personal interaction with a representative sample of people making these decisions. Several of my customers who are Director and EVP level types at large companies that employ technology workers. The discussion happening here has happened with them over many dinners and lunches for the last couple of years.
All my customers are outsourcing or plan to outsource 90%+ of their IT workforce to foreign companies over the near term. Each is a Fortune 1000 company. There will always be those critical projects that require home grown talent, but they are few and far between.
The arguments that "americans are innovative" seems to imply that the majority of IT work has a need for innovation. Instead, the vast majority of IT work involves applying existing technologies to new or not so new challenges. Can you really argue otherwise?
I have strongly advised family members not to follow the IT career path I followed in my life for exactly this reason. To date the majority of wealth transfer involving IT was to Americans. In the future it will be to non-Americans. As there are more non-Americans receiving the wealth than there were Americans, the individual recepient will not receive an equal amount. (Incidentally, many believe that India is going to become a relatively expensive place to outsource to because, just like anywhere there is a booming industry, Indian companies are showing signs of wanting to raise prices.)
Free trade only works when participant plays by the same rulebook. In the world marketplace this is clearly not true. The rational decision for the American government, if they were really concerned for the common good of their populace, would be to move further towards protectionism in order to protect the common good of their own population. You can get a fairly decent summary of this idea from reading the end of Lee Iacocca's autobiography.
I realize this pre-supposes the greed of the American people who are unwilling to drop their standard of living in order that the standards of others will rise. We can agree that this is exactly how Americans feel, can't we? I would even state that that is just how anyone would feel if they were in the same shoes as Americans.
Most likely companies in the United States will slit their throats long term by engaging in globalization. There will be a primarily one direction flow of wealth out of the United States to other countries. The standard of living will drop in the United States and rise in other parts of the world. The United States will give away its position as an economic superpower before the EU and China even have a chance to try and take it away. Ironically the executives outsourcing American jobs today will see the opportunities for their children dry up.
I am just jotting this down quickly (busy at the moment) but I think that IT is just feeling an overall trend that continues to work itself throughout the entire American economy. When it is over it will be a different world. America will be alot poorer, and countless other countries will be a bit richer.
- AC
p.s.: This does come from a scarcity mentality, which is a short term view of things. Over generations I think this situation will be corrected as technological innovation continues to raise the standards of living for the world as a whole. But unlike the decline the recovery will happen after I, and many of you, are dead.
Re:"protectionist policies like H1B quotas" (Score:2, Informative)
The reason not everybody uses it is that you have to have a fairly large HR department in order to handle the paperwork; or outsource to somebody who does.
Re:again? (Score:3, Informative)
Yes, you can outsource integration and consultation and they are doing just that. i2 has all its internal and external tech support in India. The call centers are there. The sysadmins are there. The programmers are there. Soon all the servers will be moved there. The local tech people were laid-off and more in Bangalore were hired. Companies are offering relocation packages at 1/4 the pay to move to Bangalore. Some Indians who have immigrated to the US are taking them and moving back gome.
Its exactly what you are saying WON'T happen that IS happening and that is why many are upset and think it is a bad idea. Read the articles and look at the data out there.
Re:The Economics of Empire (Score:3, Informative)
You'll note that globalism only seems to work one way. Why can't I buy shoes directly from Indonesia for $5? Why can't I get a PC from China for $100? If American companies really want to compete globally then let's open the door both ways and see how they fare when I can buy a DVD player online for a fiver + shipping.
actually, why cant you? not a flame, I just don't see why you cant. Are there any regulations that prevent you? If it's not that way, then it's not free trade.