There's some light at the end of the tunnel. I deal with technicians from India, and let me tell you this...They screw up many times more than American workers. Very slow and inaccurate service.
www.postchronicle.com/news/technology/article_21223577.shtmlAnalysis: Offshoring Getting More Costly In IndiaAnalysis: Offshoring Getting More Costly In India
by Indrajit Basu
Jun 16, 2006
CALCUTTA, India - June 16, 2006 (UPI) Not many global IT majors have started recoiling yet, but the recent decision of Apple Computers to shut down its new Bangalore center and local news about Intel planning to lay off a number of people from its Indian operations have sparked fears that rising cost may have started threatening India's attraction as an IT offshoring destination.
And although the Indian IT sector has shrugged off these two developments as just "internal corporate decisions," many are worried that rising cost pressures which are showing signs of lasting for a while may end up in some lost opportunities and may even blunt the competitive edge of offshoring IT in India.
"As the Apple story points out, India's first-mover advantage is gone at least in established city centers like Bangalore," said Michael Corbett, executive director of The International Association of Outsourcing Professionals, the global organization for the outsourcing profession. "The marketplace dynamic of supply and demand is resulting in rapid salary inflation, high turnover, and other forms of cost escalation, which may end up in some lost opportunities for the Indian IT."
He added that other competing countries like Philippines, China, Russia and Eastern Europe "will exploit India's growing pains to improve their competitive posture," and could even give India a run for the money.
In a startling announcement last week, Apple, which opened its software division in Bangalore with much fanfare in April, announced without citing reasons that it is closing down its Indian operations and "has decided to put its support center growth in other countries." Consequently it served layoff notices to about 600 newly appointed employees, who, according to reports, said "India isn't as inexpensive as it used to be," and that was impacting the financial feasibility of the Indian operations.
"Apple hired professionals at salary levels much higher than the industry standards and soon realized that the business generated from the additional expenditure did not justify the costs," said an industry insider requesting anonymity.
But if the Apple decision perplexed the Indian IT offshoring industry, what came as a jolt were local reports that said that Intel, as a part of the company's global cost-cutting and layoff exercise designed to cut $1 billion out of its forecasted expenses, is seeking to downsize its Indian operations as well.
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www.macworld.com/news/2006/06/23/pervasive/index.phpPervasive follows Apple out of IndiaBy John Ribeiro, IDG News Service
Pervasive Software, a U.S. vendor of data infrastructure software, this week announced it closed down its software development subsidiary in Bangalore, India, citing complexity of management of the operation, and increasing employee cost and turnover.
Industry analysts expect a number of other small software development or services operations in India of multinationals to either close down or get transferred to an Indian supplier.
A number of foreign companies have set up operations in India which do not have the optimum size required to realize the savings of doing work offshore in India, said Siddharth Pai, a partner at sourcing consultancy firm, Technology Partners International (TPI) in Houston, Texas.
Unless a company is doing work that is highly skilled or highly differentiated in India, it needs to have at least a 1000-person operation in India as the fixed costs for such an operation are high, he added.
Companies setting up offshore software development or services operations in India also miscalculate the amount of management bandwidth and effort required to make it work to their expectations, according to Pai. There are currently about 385 development and services subsidiaries of multinational companies in India, and while there are some that are very large, there are many that are too small to be viable, he added.
The move by Pervasive came in the wake of a similar decision by Apple which shut down recently its month-old support center in Bangalore, which had 30 staff. “We have re-evaluated our plans and have decided to put our planned support center growth in other countries,” said Steve Dowling, a spokesman for Apple in Cupertino, Calif. earlier this month.
In a statement this week, Pervasive quoted its president and chief executive officer John Farr as saying that while the potential cost savings of an offshore development operation can be mathematically compelling, the company found that the complexity of managing such an operation, and the increasing costs of labor, employee turnover, training, and facilities in a hot market such as Bangalore make it challenging to ultimately realize those savings. Pervasive had about 50 staff in India.
Pervasive announced earlier this week hiring plans in its software development and technical support groups at the company headquarters in Austin, Texas. The company will however continue to outsource to Indian company Aztec Software & Technology Services in Bangalore.
The moves by Apple and Pervasive to opt out of their offshore operations in India do not however reflect an overall trend. Other foreign companies are expanding at a fast pace in the country. French IT services company Capgemini S.A. said earlier this month that India would be the hub for its offshore delivery of services, while IBM announced US$6 billion in new investments in India over the next three years, mainly to expand its offshore services operations in the country.
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www.macworld.com/news/2006/06/05/appleindia/index.phpApple shuts down Indian support center[/i]
By John Ribeiro, IDG News Service
Apple has decided to shut down its fledgling technical support center in India after only one month, according to a report Saturday in a local newspaper.
Apple informed its employees May 29 of the decision to lay off all 30 staff, according to the Times of India newspaper. The center, intended as offshore technical support for worldwide customers, began operations in April.
Officials at Apple India were not immediately available for comment. The company’s sales and marketing operations in the country will continue, the report said.
Apple’s decision to pull out its technical support center from India comes at a time when some of its competitors like Dell are expanding rapidly in India. Dell announced earlier this year that it would double the number of staff in India to 20,000 over the next three years. Most of the new jobs at Dell India are in customer support.