In the recent months, it is hardly a day passed without an announcement from a major international corporation that the outsourcing software development to India or investing in the building its own software development center there. The major Indian outsourcing announcements have come fast and furious recently, the IBM will open a Linux research lab employing 500 Nortel Networks which already has 1,300 developers in India that will spend $350 million in the next three years an employ 500 additional research and the development scientist. The Cisco Systems will spend $200 million on a development center and Deutsche Bank is dropping $4.3 million to build a 50,000 square foot development center that will eventually house 550 software professionals.
The India is clearly on a roll, with the National Association of the Software and Services companies predicting $6 billion in the software exporting this year and $50 billion by 2008 some are starting to question whether India can maintain its competitive edge. The low-cost technology centers and competing for outsourcing projects, making it increasingly unlikely that India will reach that lofty goal. The Information Technology Association of America is an industry trade group that estimates that some 840,000 Information Technology jobs in the US will go unfilled. For a first year graduate, it start out with the typical salaries of $45,000 to $50,000 and rapidly escalate. The offshore software outsourcing industry will no doubt continue its hyper-expansion in the next few years as Western firms look for the cheap offshore talent to fill gap, but it is clear that India could stumble and lose its crown.
The India will likely face troubles ramping up to the projected 2008 level. It is estimated that India would need to have 1 million currently graduates around 110,000 computer science students a year, this is with the dearth of experienced project leaders that is already on the horizon that the problem will reach a crisis points as outsourcing continues to expand at a rate of more than 50 percent a year. Most of the India’s best and brightest will continue migrating to the US in search of the higher wages. India does slip, there are plenty of the low-wage countries that would be only too happy to pick up the slack.
China would seem to be the biggest threat with the 400,000 software professionals, this is only 35,000 of them are qualified to do the kind of the high level systems integration projects that are so coveted in India. Most of the China’s high tech laborers are well qualified to work on the software applications maintenance and the migration projects and these workers come at a significantly lower salary than do their Indian counterparts doing the same work. The Chinese environment has traditionally been in the manufacturing and hardware, but it appears to be changing and the Chinese governments has recently placed great emphasis on teaching
REFERENCE:
http://hyd-news.blogspot.com/2005/07/can-india-retain-its-reign-as.html
