HP at the Discover 2011 Conference in Vienna last week announced a wide range of new Cloud Solutions designed to advance deployment of private, public and hybrid clouds for enterprises, service providers, and governments. Based on HP Converged Infrastructure, the new and updated HP Cloud Solutions provide the hardware, software, services and programs rapidly and securely deliver IT as a service. Read more
Advanced and pervasive virtualization and cloud computing trends are driving the need for a better, holistic approach to IT support and remediation. Keeping virtualized servers that support mission-critical applications and databases at top levels of performance 24 x 7 is a much different problem than for maintaining physical servers in traditional configurations. Read more
Recently Forrester Research published a report on offshore vendor innovation. According to the report, close to 41% of companies using offshore outsource providers are not getting any innovative solutions from their providers. Read more
Recent,ly Business Week published an article that predicted that slowly American manufacturing jobs are coming back to US, and that the rate will accelerate in the coming years. The article explained various anecdotal evidences and statistics to prove the point.
Following are some of the evidences for outsourced manufacturing jobs are coming back to US:
The Institute for Supply Management (ISM) reported that manufacturing companies in the US have expanded for the past 24 consecutive months.
The Federal Reserve reported that US manufacturing jobs gained year-over-year 3.8%.
Following are some of the reasons quoted for manufacturing jobs coming back to the US:
The labor cost in China has been growing by 15%-20% on a yearly basis; this is 30% lower than low-cost cities in US. It has been predicted that the manufacturing cost in China will equalize with the American manufacturing cost by 2015.
Similar to manufacturing jobs coming back to the US, ITO and BPO jobs are coming back from India to the US. Several new names are formed to denote this phenomenon, such as onshoring, insourcing, and US rural sourcing. The big question is how it will affect India’s status as the only country for ITO and BPO jobs? At this time no one knows the extent to how much it will affect India. Also, in the US the current unemployment rate in IT is less than 4%. Still, companies are having a tough time finding qualified IT workers in hot technologies like web design, Java, cloud computing, and mobile technology.
McKinsey did a research report on onshoring. In the report they found out that the IT wage in smaller US cities are 30% lower than in bigger US cities. Meanwhile in India both attrition rate and wages are increasing sharply, which puts pressure on big Indian outsource companies like TCS, Wipro, and Infosys to maintain their profit margin. These Indian outsource companies’ business model is to hire more IT workers early and make them work in an outsourced project. So with less quality workers in India, a high attrition rate, and a steep wage rise, it will be difficult to keep the profit-margin without rising their client engagement fee.
American companies are watching the trends in India, and are making wise decisions on their sourcing strategies, choosing from various sourcing strategies like onshoring, ruralsourcing, closeshoring, nearshoring, and offshoring. However, the current demand for IT workers make American companies look to India as their preferred offshore destination for their large-scale IT needs in which cost arbitrage is the main requirement in their projects. This trend will continue until the cost of IT workers India is less than in US. No one knows how long it will take for Indian IT salaries to be comparable to American IT salaries and when cost arbitrage will no longer be possible. Until that day, India can enjoy large scale ITO and BPO projects coming their way.
Most enterprises, service providers and governments have ramped-up their use of virtualization over the past several years, with many impressive results. Those paybacks can only continue, however, if the overall service and support of these complex and dynamic environments keeps pace. Read more
If you are currently in the job market or perhaps you already have a few job offers, you might be wondering what is it like working at Infosys. After all, Infosys is India’s second-largest software exporter as well as a major global software and outsourcing employer. Read more