Can India Retain The Reign Of Offshore Outsourcing King

Hardly one week, without an announcement from MNCs or other global big organizations has passed in recent times that they are Offshore Outsourcing Software development from India and investing for building their own Software Development center in India.

For instance just Yesterday, company based at France, Cap Gemini Ernst & Young, fifth largest IT services firm thought out world, had open a new Software Development center in Mumbai suburban area and that will accommodate 250 IT-professionals. The organizations chief said that “We are really looking forward for stepping stone and building a much bigger presence in nation like India".

With that main Offshore Outsourcing announcements by India have come furious and fast recently like this; International Business Machine is going to open a Linux research laboratory and give way to employment to 510 professionals; With 1350 IT-developers, Nortel Networks in India, will spend 350 million dollar in the next four years and increase employment by 500 additional R&D scientists; Cisco Systems spend 200 million dollar in future for Software Development center.

So one can see that India is currently on a roll but question is that how long can it hold this crown? With the prediction by NASSCOM, that 6 billion dollar for software exports by this year and it will go 50 billion dollar by year 2008, but some have started questioning that whether India can maintain competitive edge or not. Cheaper cost IT Outsourcing in China, with that Philippines, Russia and Pakistan are also sprouting up and competing for Outsourcing projects, so it indicates that unlikely India will reach the lofty goal.

The U.S. IT Association estimated that around 845,000 Information Technology jobs in America will go to be un-fill this year. For a 1st year graduate student, it will start out with salaries of 45,000-50,000 dollar and it will rapidly escalate. So with that no doubt the Offshore Software Outsourcing industry will continue its hyper expansion in the next six to seven years with Western companies look for cheaper and cheaper overseas talent to fill those gaps, but it is doubtful that India could hold its crown or not.

If India will slip from the Offshore Outsourcing leader, there are so many low wage nations that might be happy to pick up the show. Like Pakistan, has also soughed to emulate neighbor’s success with offer of similar tax benefits for MNC-s. At the same time China is look like the biggest threat to India, with more than 400,100 Software Development engineer, but only 35,100 out of it is qualified to do high level kind of work, that systems integration software projects coveted in India. For the work of software applications maintenance and migration projects, the Chinese employees are well qualified with high technical skills and can come at a significantly cheaper salary as compared to Indian counterparts.

It appears to be changing of the Chinese environment that traditionally had been grounded for manufacturing and hardware, but now it is appearing to be change, and the government has recently placed great emphasis on education with English for the gradates of IT profession., that is considering as extremely important skill by American companies while selecting the Offshore Outsourcing vendors.

India already educated in the critical skill of English, as a former British colony, but as compared to Philippines, a former American colony, they are not efficient, where U.S. language and culture is widely known. For U.S. Organizations the cultural and communications skills might prove to be appealing that they would give importance higher than other nations.

As far as concerning of Russia, with fall of the Soviet Union, there were almost one million registered engineers, but many of them have retired since, it’s been out of job for long-long periods or they do not posses the necessary skill sets. Nevertheless, Russia's university programs in physics and mathematics praised that the nations has tremendous Offshore Outsourcing potential as compared to India.

Software Projects previously that went to Bangalore, India's hi technology center might go to China, Manila or Guangzhou next year. Those nations, along with other host like Thailand, Indonesia, Vietnam and even Malaysia will collectively challenge India's IT Outsourcing in future years.