The Mystery of Offshore Outsourcing

Enterprise is moving IT services offshore, especially it seems storage resources. But where's the kickback from IT staff and admins, wonders Storage Center Editor David Morgenstern.

North American enterprise is busy outsourcing its IT services offshore. Now theres even a trade show for the practice. So why is it so hard to find an expression of outrage from high-tech IT managers and storage admins?

In an poll last week, 17 percent of respondents said that most of their companies IT was now offshore. Another 16 percent had sent some of it offshore, although less than half.

Now those readers with an optimistic bent will point to the 67 percent of companies with no offshore outsourcing. But by my view, a third is now heading offshore. On the subject of outsourcing, optimism is a fools bet; the rate is climbing.

In further evidence of this trend, theres last months OutsourceWorld Expo, a branch of the TechXNY show. It featured panel discussions on a variety of ways to handle the outsourced relationship and how to avoid regulatory problems. According to the show management, more than 3 million jobs will move offshore, or about $136 billion in wages.

Everyone seemed to think this offshore outsourcing conference was a perfectly reasonable addition to the long-standing show, formerly known as PC Expo. As far as Im aware, there was no outcry over the issue as seen in the San Francisco Bay Area at similar conferences. Am I the only one who sees the irony in a technology expo that has a key conference focused on moving the jobs of its attendees out of the country?

Meanwhile, the actual loss in the IT sector will be higher, since any technology job is bolstered by a long list of ancillary functions provided by consultants, integrators and all the rest of the technology distribution food chain. And then there are the usual service and support jobs in the greater economy that are supported by any white collar job. Their employment will also dwindle as this IT meltdown progresses.

CIOs seem to know all this, but still we see them move IT (and other) jobs offshore. Perhaps they want to leave the social responsibility to the other guy.

Following up on a recent column on the need for education for storage managers, reader David Porowski said that the most extensive class offerings will be in found in India, the current destination for much IT offshore outsourcing. "The only sector where offshore outsourcing might be an issue will be in government: the Department of Defense, the Department of Justice and the Homeland Security Administration."

/zimages/6/28571.gifClick here to find out what three IT professors think about the state of storage education.

As companies move their IT operations abroad, of course storage for disaster recovery and business continuity applications will be one of the "winners." For example, local IT publications report that IDC last year projected a 63 percent annual growth rate for storage in the Indian market through 2007.

However, the argument has a simple appeal. I quizzed a buddy on the issue, who has a long list of technical degrees and now markets a high-performance clustered computing solution. He was quick to impart the customary line about such offshore outsourcing as a byproduct of the "global capitalist system." This was a natural process in the economy. He said we must simply wait for the next wave of technology or invention to replace the jobs lost in the current round of offshore outsourcing.

Funny, as far as I understood, our IT jobs are still the proverbial "good jobs" of the information economy that were supposed to take the place of the lost manufacturing jobs.

What I dont understand is the lack of movement on this outsourcing issue by IT professionals. Are we so used to being the enduring, accommodating presence in the storage closet that were just going to let this slide?

/zimages/6/28571.gifWill offshore outsourcing drain U.S. tech? Get eWeeks detailed labor outsourcing report here. Storage Center Editor David Morgenstern is a longtime reporter of the storage industry as well as a veteran of the dot-com boom in the storage-rich fields of professional content creation and digital video.

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