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IBM Businesses

IBM Snags Leading Indian Outsourcing Firm 442

Posted by simoniker from the international-indeed dept.
theodp writes "In one of the biggest foreign acquisitions in India in the past few years, according to ZDNet, IBM will pay an estimated $150-$200 million to acquire Daksh, India's third-largest back-office services company. The deal will give IBM access to privately held Daksh's 6,000 employees, who mainly offer call center services to 13 clients, including Amazon.com."
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IBM Snags Leading Indian Outsourcing Firm More

IBM Snags Leading Indian Outsourcing Firm

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  • IBM First Post (Score:5, Funny)

    by Anonymous Coward on Wednesday April 07, 2004 @02:35PM (#8794910)
    A guy from Microsoft, a guy from Apple, and a guy from Sun are at a conference. During a break they all go to the restroom to take a leak.

    After they finish, the Microsoft guy washes his hands, takes a whole bunch of paper towels and dries his hands REALLY well. He turns to the others and says,

    "At Microsoft, we have to be thorough."

    The Apple guy then goes to wash his hands and takes a single paper towel and dries his hands perfectly with it. He smugly says,

    "At Apple, we have to be thorough AND efficient."

    The Sun guy just walks straight out the door without even washing.

    "At Sun, we don't piss on our hands."

    • Re:IBM First Post (Score:2, Insightful)

      by grub ( 11606 )

      ... but then the Sun guy couldn't use the paper towel to open the door meaning he's handling everyone elses vile germs on the door handle.

    • Re:IBM First Post (Score:5, Informative)

      by MisterFancypants ( 615129 ) on Wednesday April 07, 2004 @03:25PM (#8795517)
      I hate to come off as the party pooper, but this joke is: A) Very Old (predates all of these tech companies and is probably older than than poster -- used to be told about college students, navy/army, various other competing entities). B) Scientifically suspect. Even if you don't piss on your hands, handling your johnson exposes your hands to coliform bacteria that is generally harmless to yourself but could be a problem for others. So even if you don't piss on your hands, you should still wash them before you go around touching everything at work, you dirty hippy.

  • What can I say? (Score:5, Funny)

    by mcg1969 ( 237263 ) on Wednesday April 07, 2004 @02:37PM (#8794930)
    If you can't beat 'em, buy 'em.
    • Why not? It's what the Japanese did to the U.S. ;-)

  • In related news... (Score:5, Funny)

    by tverbeek ( 457094 ) on Wednesday April 07, 2004 @02:37PM (#8794934) Homepage
    In related news, Daksh announced that it would be closing its domestic operations and laying off 5,500 Indian workers, in favor of opening offices overseas, in the developing world. Offices in Kinshasa (Democratic Republic of Congo), Pitcairn Island (South Pacific), Ashgabat (Turkmenistan) and Hickory-Flat (Mississippi, USA) are planned.

  • HAHAHA R0FL (Score:5, Funny)

    by Anonymous Coward on Wednesday April 07, 2004 @02:37PM (#8794935)

    IBM Snags Leading Indian Outsourcing Firm

    Just don't call it Leading INDian OutSourcing" and everything will be fine.

  • Next layoffs? (Score:5, Insightful)

    by DynaSoar ( 714234 ) * on Wednesday April 07, 2004 @02:37PM (#8794938) Journal
    I wonder if this will result in more layoffs from the company that once boasted it would never do so. How times change.

    • Re:Next layoffs? (Score:5, Insightful)

      by stratjakt ( 596332 ) on Wednesday April 07, 2004 @02:41PM (#8794980) Journal
      Layoffs, or never-hires?

      Who do you think is going to be taking calls for IBM's linux initiatives?

      RedHat's outsourced already, noone ever mentions it here because you cant deride the almighty linux vendors.

      I called Red Hat tech support once a couple years ago, and talked to some guy who barely spoke english who told me he was in the Philippines.

      A free-as-in-beer OS needs a cheap-as-in-sweatshop support staff.

    • Re:Next layoffs? (Score:5, Interesting)

      by thracky ( 601756 ) <thracky@NosPAM.gmail.com> on Wednesday April 07, 2004 @02:42PM (#8794998) Journal
      Not only has IBM laid off employees but they have a habit of making bad choices that all but nullify their acquisitions of human resource based takeovers. When IBM purchased PriceWaterhouseCooper's consulting firms, everything was all good, until about a month or two ago when these former PWC employees found out they were not going to recieve any of their yearly bonus (~50% of yearly earnings for many of these consultants) because IBM "didn't make enough money" It'll be interesting to see what happens with this one, whether it becomes another PWC or whether they actually take care of the employees.

      • Re:Next layoffs? (Score:3, Interesting)

        by IANAAC ( 692242 )
        (~50% of yearly earnings for many of these consultants)

        Say what you will about bonuses, but 50 percent of someone's yearly salary is NEVER good business sense. There are other ways to keep the employees happy besides bonueses. Yeah, they're nice to get, but come on. Next thing you know you have a bunch of employees thinking they earn 150% of what they actually earn.

      • Re:Next layoffs? (Score:3, Insightful)

        by akiaki007 ( 148804 )
        Bonus: " Something given or paid in addition to what is usual or expected."

        You're implied that they expected the bonus. I've noticed that it's been the culture recently. Everyone expects a bonus and are disappointed when they don't get it. What gives. It's called a bonus, not a End-Of-Year-Salary. Sorry, too bad, you're a consultant, and if you work expecting a bonus, then you're working in the wrong field. While yes, it is "expected" that consultants get bonuses because their salary can sometimes be low,

    • Re:Next layoffs? (Score:5, Interesting)

      by Kircle ( 564389 ) on Wednesday April 07, 2004 @02:49PM (#8795104)
      Wow, I didn't think too many people remembered that. When I was little I lived in an "IBM town" (there was a local plant that employed abut 25,000). After the first layoffs in the early 90's (?) where at this particular plant two-thirds of the jobs were cut (I think a lot of them were white-collar folks), the entire community changed. In my case, I would say roughly 3/4 of my neighborhood moved out within 3 years. It was interesting afterwards to say the least.

      I think before if you got hired by IBM, it was pretty much assumed that you would work there until you retired. How times have changed indeed.
    • I wonder if this will result in more layoffs from the company that once boasted it would never do so.

      Yeah, those indian givers. [reference.com]

  • Nice (Score:5, Interesting)

    by indros13 ( 531405 ) * on Wednesday April 07, 2004 @02:38PM (#8794948) Homepage Journal
    Out(sourcing) is now in(ternal).

  • Hey, it pays... (Score:4, Insightful)

    by LostCluster ( 625375 ) * on Wednesday April 07, 2004 @02:38PM (#8794949)
    Remember, IBM never gets into a business that others haven't already proven profitable.

  • Outsourcing? (Score:5, Funny)

    by AcquaCow ( 56720 ) * <acquacow@nOspAM.hotmail.com> on Wednesday April 07, 2004 @02:39PM (#8794967) Homepage
    So now that IBM has bought them...is it still considered outsourcing?

    • Re:Outsourcing? (Score:3, Informative)

      by LostCluster ( 625375 ) *
      "Outsourcing" has always been a bad word to describe jobs headed to other countries, since "outsourcing" really just means transfering the work to another company, it doesn't quite imply the location of the other company.

      "Exporting of jobs" would be a better term.
    • Now they'll be able to avoid calling it "outsourcing" or (worse) "offshoring", and at the same time make you move to India and take a 90% pay cut -- "it's just a transfer".

  • Big Indians (Score:4, Interesting)

    by inertia187 ( 156602 ) * on Wednesday April 07, 2004 @02:40PM (#8794974) Homepage Journal
    I've talked to some of these call center operators. I was trying to activate one of my credit cards (the automated activation wasn't working I guess), and when I was done, they asked me a few marketing questions. They wanted me to add payment protection and some other insurance options. I said that I would like to wave those options. He seemed confused by my response, and asked what I meant by waving those options. Clearly, this was not one of the responses they had been trained to deal with.

    So if you're disgusted by the practice of outsourcing, make your dialog with people you suspect as being an outsourced employee as complicated or colloquial as possible.

  • Do You Hear That? (Score:5, Funny)

    by illuminata ( 668963 ) on Wednesday April 07, 2004 @02:41PM (#8794981) Journal
    I hear the voices of 6,000 worried Indians, afraid that their jobs might be sent to the US because they were bought out by an American company.

  • So now IBM can say... (Score:5, Funny)

    by YrWrstNtmr ( 564987 ) on Wednesday April 07, 2004 @02:41PM (#8794984)
    "We're not 'outsourcing', they are an internal company."

    Even though the actual results WRT jobs/people will still be the same.

  • Interesting Combination (Score:5, Interesting)

    by acherrington ( 465776 ) <acherringtonNO@SPAMgmail.com> on Wednesday April 07, 2004 @02:41PM (#8794987)
    I remember seeing an IBM ad during the NCAA Championships touting "IBM will do you HR for you so you can focus on your company" or some jive like that. Combine this with today's activities and you get a company that will do your little dirty deed for you, so your company doesn't look bad.

    Just my $.02

  • Lowest Common Denominator? (Score:5, Interesting)

    by re-Verse ( 121709 ) on Wednesday April 07, 2004 @02:42PM (#8794996) Homepage Journal
    I understand, this is how capitalism works, and this is saving so many businesses - and probably creating a lot of jobs somewhere else. I still get quite scared by it though. Its probably just my instinct as a human to try to preserve what I already have. I mean - yeah it should be a fair world and everyone deserves a piece of the pie, And I have no more right to work than anyone anywhere else - But the idea of going from the income that I barely get by on to a wage one third of what it is now, just to compete with someone who has never experienced indoor plumbing or a room of their own terrifies me.

    I understand that i have no right to the lifestyle I live now (and its not extravagant by any western standard... but I've grown quite used to it). I fear the future if even the higher skilled jobs, like IT, become minimum wage - or worse.
    • And I have no more right to work than anyone anywhere else - But the idea of going from the income that I barely get by on to a wage one third of what it is now, just to compete with someone who has never experienced indoor plumbing or a room of their own terrifies me.

      But you can't bid down. I tried that. I posted my resume with a piddly wage request and nobody cared. It carries too much stigma. It is not a fair market of goods and services. It is based on social impressions.

      Plus, many other profession
      • Other professions include farmers, truck drivers, dock workers, othodontists

        The difference that i see is those are mostly locational services. You can form a union of people who all agree that they shouldn't work under a certain wage - and it Benefits Everyone. But on the other hand - a group of impovershed people overseas have no such benefit from everyone agreeing not to work under a certain wage. Well - actually they sort of do... as long as we don't bid down... they will suck up more and more jobs. A

      • Re:Lowest Common Denominator? (Score:5, Insightful)

        by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Wednesday April 07, 2004 @04:00PM (#8795922) Homepage Journal
        There are basically only two ways to get this kind of protection: Unionization and mandatory licensing/accreditation. For example the proverbial piece of the pie is guaranteed to contractors because non-contractors cannot legally bid a fixed amount on a construction job, they can only work hourly.

        We can't unionize, because there are simply too many people who can do what we (systems administrators, network administrators, programmers, etc) can do. They might not do it as well but if it takes them twice as long at one fourth the wage that will be good enough to most people.

        However getting worried about this is to see the hill and miss the mountain. Outsourcing is just a tiny little worry. What happens as computers continue to get easier to network, and programming continues to move toward open models with users contributing back source for free? We're all gonna be out of work before long. Now admittedly computers don't manage themselves, but that's because very little effort (comparatively) has been spent on systems maintenance automation as compared to everything else. Now that companies are working hard on maximizing uptime and making it a primary priority, I think we're going to see a return to the olden days of receptionist-as-sysop. A consultant will be called in occasionally to fix the hard problems.

        Solution? Realize that Specialization is for Insects [c2.com]. You don't have to take things to Longian proportions where you can fix a computer, pilot a spaceship, knock off one or two fine pieces of ass and still make it home in time to cook dinner and play the bagpipes during supper, all while wearing a tux coat and a kilt, but only being good at one thing is a big mistake. In addition all us non-polyglots are going to be in big trouble in the "global economy" which is only getting more global - as many of us have found as we became rapidly unemployed. Actually, it was the dot-bomb that got me, not outsourcing, but I can only assume that outsourcing has made it harder for me to get work.

        Lately I've been working on auto body and paint skills, as well as other automotive stuff. A decent body and paint guy can make six figures if he's willing to put in 40-50 hours, is very good at at least one thing and pretty good at a few more things, and lives someplace people have money. It used to be easy to reach/approach six figures in computers, but not any more. If you make that kind of money now it's because you understand the deep voodoo in some complex system, or because you got astronomically lucky.

        Of course, cars aren't going to be a reliable way to make money FOREVER. Raise your hand if you thought computers were the sure money... Now lower your hand if you still have a job working with computers that keeps you above the poverty line. Let's compare counts... Now, lower your hand if you still enjoy your job. Count again, and note how many of the hands are still up... Someday the world will swing away from being car-heavy, simply because it will become uneconomical. You might argue that this is true today but as a form of transportation it is hard to beat cars. If you get a relatively efficient one (read: just about anything japanese that isn't an SUV or a full size truck) then you will get very good mileage, the system requires little maintenance, and almost anywhere you go, public transportation is crappy and expensive. It costs $3 for a day pass in Santa Cruz which has a merely mediocre bus system (A very few buses run until 1am, which is not too bad.) $3 will get you about a gallon and a half of gas right now, which around town in my girlfriend's honda will take you probably a good 30 miles. (It might take you almost as far in my 240SX, which has a stock motor, if I wasn't up on the throttle all the time.) But it's only a matter of time before cars swing around again - They, however, will probably continue to hold their place of prominence longer than I am alive.

    • I understand that i have no right to the lifestyle I live now...
      Dump the politically-correct drivel -- you have a perfect "right" to it (in the sense of "something to which one has a just claim") to the extent that you put forth effort, work hard, save money, pay taxes to contribute to education & other infrastructure (i.e. the "common goods"), and participate in the political process.
      • Yeah but i think the bigger picture is that they are hard-working, money-saving, tax-paying, contributing people who also really care about this "common good" in India as well, so why shouldn't they be given just a big slice of the pie - So its not politically driven drivel, as you so eloquently posted... but more so a consideration that I don't deserve it just because I have it - or moreso - that I don't deserve it more than anyone else does... and that I'm here in the position I am by the luck of birth mo
        • Granted, perhaps drivel is a poor choice of words.

          But I don't feel that people in developed nations need to apologize for the fruits of decades (if not centuries) of economic- and lifestyle-effecting investments, or for the fact that they have access to abundant natural resources (v. Saharan Africa, for instance), or whatever else is blamed for the lots of the impoverished nations.

          This is not to claim that overt actions haven't had an effect on impoverished nations, or that developed nations shouldn't hav

    • just to compete with someone who has never experienced indoor plumbing or a room of their own

      I couldn't decide whether to mod you down for this or reply. I'm not one for anonymous bashing, so I figured I should say something instead. The fact that you were modded + anything is quite surprising, if not a little disturbing.

      You know, it's naive, childish remarks like yours that often times lead to Americans being labled both racist and elitist. I'm strongly opposed to outsourcing, but going so far as to
      • Its fine to get high and mighty with a "how dare you" but i think you need to re-read the post. I think the process is frightening, not the people. I have many friends from many places all over the world. And remember- I said that Everyone has an equal right to the pie.

        So yeah - it is the companies i fear - and the government... but more so - i fear that deep down, on some moral level - its The Right Thing - from an egalitarian sense... but human instinct is based not on what is right but what is best f

  • Does anyone work for an IBM call center in the U.S.? If so, what kind of severance package are you expecting?

  • Why is this a problem ? (Score:4, Insightful)

    by iMaple ( 769378 ) on Wednesday April 07, 2004 @02:43PM (#8795007)
    I cant figure out what any logical person could have against outsourcing.

    Yeah I know abt the diminshing jobs in the IT sector (And I guess I am writing this since I dont work in the It sector).

    After all if IBM can get something done for a fraction of the price in the US why wouldnt or shouldnt they go for it.

    This is not Soviet Russia you know
    • Yeah I know abt the diminshing jobs in the IT sector

      Are we counting call centers in Information Technology now? Call centers aren't exactly things that matter to nerds.

    • Re:Why is this a problem ? (Score:5, Informative)

      by Vancorps ( 746090 ) on Wednesday April 07, 2004 @03:03PM (#8795276)
      Because IBM in particular was founded on taking care of its employees, not just kicking them and ruining entire communities. There is a lot of damage done by these actions and absolutely no attempt to make it easier. Granted there is no law that says what they are doing is wrong, but it does go again James Watt's intention when he founded the company.

      Also, businesses despite what I see in your post are not just about making money, if that were true I wouldn't have Christmas parties and bbqs and an owner I can go out for beers with. Sometimes its about accomplishing a goal and human resources or rather, the people you employing being a better term are your means to reach the goal. If they are successful you are successful, destory any and all vision of their future doesn't exactly help matters either.

      My father works for IBM, has for 30 years, he know his time is coming and he's preparing, but he doesn't know when, will it be this summer? The fall? He has no idea how long he'll be able to stay.
    • "I cant figure out what any logical person could have against outsourcing."

      I, and many people like me, have this whole food/shelter requirement. Thats the problem I have with outsourcing. I know too many smart people who have no job and outsourcing is making the situation worse.

    • Re:Why is this a problem ? (Score:5, Insightful)

      by composer777 ( 175489 ) on Wednesday April 07, 2004 @03:25PM (#8795525)
      One of my favorite catchphrases is to sarcastically say,"Why shouldn't someone be allowed to do X?" It's a lot of fun to do, especially after completely demolishing someone's perspective by shining a blinding light on reality.

      It does no good to ask these questions without taking a serious look at reality. When you do, you will find all the answers that you need. There is no doubt that limiting freedom should not be done in an arbitrary and reckless manner, and that the burden of proof is on those who seek to limit freedom. However, all one has to do is look at the evidence to see that market fundamentalism is a horrible and flawed social policy. No one in their right mind asks questions such as,
      "Why shouldn't people be allowed to trade stocks using insider information? Who are we to limit their freedom of speech?"
      At least, no one that has studied the Great Depression.

      And, if we take a look at what is happening with "Free" trade, we can see that it is being used as a tool to crush the weak. It is placing property rights above all other rights, in fact, it doesn't even recognize such basic things as being able to eat, or have decent healthcare as rights. In the point of view of market fundamentalists, the only things worth protecting are the rights of IBM, and those with property, to enjoy their property, and everyone else can starve and die, since they have no rights. This is all good and well, until one realizes that there is no logical basis for rights at all. Rights are whatever we decide them to be. Therefore, it makes no logical sense to promote IBM's right to their property any more than it does to promote the right of working people to have food, shelter, and decent medical care. We decide what should be a right based on what kind of society we want. If we want a society where IBM can dump a thousand people out on the street on a whim, and those people have no protections, then we can keep going in the direction "free" trade and market fundamentalism. If we want a society that treats each human being with dignity and respect, and gives everyone in it a way of contributing (including the 8-10% that are now unemployed), then we can give more priority to things such as a right to work, right to medical care, etc. There is no logic to it, it's based on what you feel is right. Logic is a tool, and it's application to this kind of problem is severely limited.

      The reason why IBM, in my opinion, shouldn't be allowed to do whatever they want with their property is because property rights should be balanced with other desirable social ends. Honoring property rights should not trump all other social policy. If IBM moves their money to some other country, and as a result, thousands of people lose their jobs, the environment of the world takes a turn for the worse as IBM and others take advantage of India's inferior environmental protections, and the overall standard of living takes a nose dive, as IBM pockets the difference in increases profits, then we need to take a serious look at whether IBM's right over their property should come above other's standards of living, the envrionment, etc. These things do not operate in a vacuum, and if you want to understand the issue, it pays to realize that what IBM does affects not only itself, but a large amount of other people. Therefore, IBM should behave with an appropriate amount of responsibility, that is, if we want a society that behaves in a sane manner. My ownership of a 700 watt stereo does not give me the right to turn the volume up any more than IBM's right to it's property should give it absolute power over that property. The same reason why we outlawed slavery can be used as a basis for arguing against free trade. Slavery was outlawed because it was understood that freedom of contract should not take precedence over things such as a minimal standard of living for all. In a society that places freedom of contract, and property rights, above all else, the logical extension is, of course slavery, as those without po

  • Reasons OTHER than Outsourcing (Score:5, Insightful)

    by Amadaeus ( 526475 ) on Wednesday April 07, 2004 @02:44PM (#8795036) Homepage
    It seems to me that IBM may be doing this not for the sole reason to outsource, but to gain market share outside the US in terms of government contracts. The Indian Government is fiercely isolationist when it comes to contracting out IT and other services, and IBM acquiring Daksh may just get their foot in the door.

    • Re:Reasons OTHER than Outsourcing (Score:4, Insightful)

      by Tablizer ( 95088 ) on Wednesday April 07, 2004 @02:59PM (#8795226) Journal
      It seems to me that IBM may be doing this not for the sole reason to outsource, but to gain market share outside the US in terms of government contracts. The Indian Government is fiercely isolationist when it comes to contracting out IT and other services

      We should pressure India to open up its markets and provide the SAME AMOUNT of trade from the US. Why do so many contries try to become producers instead of consumers?

      Why should we keep running trade deficits with every country? That just makes us the dumping ground for cheap trinkets and services of all the newbie economies.

      If they want to take advantage of our consummerism, then they should also form equal consumption on their part. No more free lunches for those guys.
      • You seem to be missing the whole point of trading. We do not trade to give people jobs. We trade to get stuff. If other countries are willing to send us stuff without us sending them stuff (which is what a trade deficit is), that is *good* for us. It means that we are getting free stuff.

        The problem is that we have many unemployed people in industries where we are in surplus. Increasing exports to India won't fix that. They won't buy IT services; they'll buy things they need, like grain or pharmaceuti

  • Investment... (Score:4, Informative)

    by ParadoxicalPostulate ( 729766 ) <saapadNO@SPAMgmail.com> on Wednesday April 07, 2004 @02:45PM (#8795046) Journal

    Daksh is an early mover in a sector that is thriving by tapping India's English-speaking workers to provide services such as accounting and insurance claims processing to foreign customers looking for low-cost outsourcing.

    So correct me if I'm wrong, but this seems to be an investment rather than a direct acquisition.
    In other words, these 6,000 employees wouldn't be taking tech jobs from the U.S.

    • Re:Investment... (Score:2, Insightful)

      by RetroGeek ( 206522 )
      these 6,000 employees wouldn't be taking tech jobs from the U.S.

      No, that part has already been done.
      • Well at least the profits from their hard, underpaid work will be coming right back to IBM's stockholders. I hear that Nike and Reebok have been extremely successful with this business model.

  • Look at those numbers (Score:4, Interesting)

    by g-san ( 93038 ) on Wednesday April 07, 2004 @02:45PM (#8795056)
    Go find me an American company that has 6000 people and you can pay $150Mil for.

    They're getting people for $25k a pop.

    (ok, $33k if they get $200Mil, still a BARGAIN)

    • Re:Look at those numbers (Score:3, Interesting)

      by Fjord ( 99230 )
      Some people have said that that is cheap, but you can get 6000 people companies for $150Mil. A company I worked for bought a home nursing company with 9000 employees for $90 million. These aren't slaves you're buying, you have to pay their salaries and whatnot. The fact is that it's profit, not body count, that tends to determine company price.

  • Savings... (Score:2, Insightful)

    by ackthpt ( 218170 ) *
    IBM will pay an estimated $150-$200 million to acquire Daksh,

    Of course if IBM had bought a similarly staffed US or European company, it would have cost 5 times more.

    *rimshot*

  • If Darksh doesn't already run Linux, they will soon.

  • So... (Score:4, Funny)

    by Anita Coney ( 648748 ) on Wednesday April 07, 2004 @02:48PM (#8795097) Homepage
    Is IBM going to lay off those 6000 employees and outsource the work to Guatemala?!

  • A big deal indeed (Score:5, Informative)

    by Pranjal ( 624521 ) on Wednesday April 07, 2004 @02:50PM (#8795124)
    Daksh is one of the biggest call center operations company in India. It was an early mover and has built up a significant repository of top clients in US. Infact there is an army of employees working for them and you can see many of their ads in the local newspapers every week for hiring new people. Interesting fact is that Citigroup and General Atlantic Partners and Actis hold 2/3rd of the equity in the company. This deal is going to make the Chief Executive and some employees in Daksh and the equity companies millionaire's overnight. Infact they recently opened a center in Philippines so it gives IBM the foot print in India as well as Philippines. IBM snatched a big one here!

  • Morale in the trences (Score:5, Interesting)

    by sfriedrich ( 25487 ) on Wednesday April 07, 2004 @02:52PM (#8795139)
    I have a -very- smart friend who works in the bowels of IBM: The top management may be back slapping each other about how they're doing financially right now but, they're bleeding talent badly and they don't realize how badly they're actually harming the company's long term prospects (some would say, "don't care"). The capable tech folks left at IBM are as bummed as any of us about outsourcing in general but they're also pretty unhappy with the low quality of the "results" that they're getting from "teams" in India -and- China (not to mention the viruses). We have yet to see what the actual IBM customers will think of all of this but it doesn't yet look like it's going to make for better products.

    • The Outsourcing Disaster was to be expected (Score:4, Interesting)

      by 0x0d0a ( 568518 ) on Wednesday April 07, 2004 @03:33PM (#8795602) Journal
      We have yet to see what the actual IBM customers will think of all of this but it doesn't yet look like it's going to make for better products.

      It's all par for the course. Every time some new business buzz-concept comes along, every business writer drizzles saliva all over it and writes about how amazingly wonderful it is, and about getting "left behind". Every MBA reads the series of articles, and somewhere over the year of getting this stuff hammering at them, decides that they need to take advantage of the latest and greatest. Inevitably everyone moves at once, which happens too far and too fast, and as a result most of the people moving with the herd come out bloodied and worse off than they started.

      Let me start in the late eighties going into the nineties. IT spending was a big thing. Huge amounts of money were directed into IT, lots of people (an unsustainable number, which now screws over all the people having to deal with an oversaturated job market) were hired, incredible amounts of money were blown on completely unnecessary products. Oracle installations and high-end hardware cost *stupid* amounts of money, but people paid it. "Computers" was a buzzword, and to "computers" MBAs flocked. Microsoft got really, really rich.

      Then, in the late nineties, "Internet" hit the radar. The government was pushing it as a big commercial deal, economists were enthralled, everyone was convinced that *now* was the time to get in on the ground floor. Business rags raved about the "Internet". Sure enough, stupid amounts of money (unsustainable amounts) were committed. The dot-com boom happened...and then crashed.

      Now, in the naughties, "outsourcing" has become insanely popular. If an MBA hasn't considered "outsourcing", he should have a good reason why. So we're going to shove a whole lot of people to various countries, go overboard in doing so, and burn ourselves again.

      Whenever the business press catches on to something and starts to get excited, it's a really good time to run in the opposite direction.
  • Well in looking at the numbers in the various articles IBM has 9K currently in India, now another 6K and a couple months ago annouced they will be outsourcing 4.6K current U.S. jobs to India. They might as well change their name. Also note their latest ad's on TV for IBM HR services. Guess they have the most experience at dumping US citizens and moving the jobs overseas.

    Guess Bush and his CEO cronnies are to short sighted to realize in the long run they are gutting middle America. Whose going to buy

  • Hmmm... (Score:3, Interesting)

    by PsiPsiStar ( 95676 ) on Wednesday April 07, 2004 @03:12PM (#8795375)
    *Puts down his book on introductory Chinese and sighs...*

    Back to the drawing board.

    Will someone please explain to me why, if we're running a trade deficit and have been for next to forever, the dollar is still so strong compared to other currencies?

    • Re:Hmmm... (Score:3, Interesting)

      by the eric conspiracy ( 20178 )
      if we're running a trade deficit and have been for next to forever, the dollar is still so strong compared to other currencies?

      The trade deficits that everyone quotes don't include all international financial transactions by a long shot. For example, they do not include corporate profits repatriated into the US, nor do they include investments made back into the US by people who recieve dollars in payment for goods. These other flows of money do a lot to balance the trade deficit's effects on the dollar.

  • You know that old adage: (Score:3, Funny)

    by Bingo Foo ( 179380 ) on Wednesday April 07, 2004 @03:18PM (#8795451)
    "No one ever got fired for being bought by IBM."

  • Slashdot quandary: IBM good or bad? (Score:5, Interesting)

    by Retired Replicant ( 668463 ) on Wednesday April 07, 2004 @03:23PM (#8795504)
    IBM supports Linux, and is the company who wishes wholeheartedly to squash SCO like a bug.

    But on the other hand, IBM is outsourcing your job to India.

    But maybe there is consistency here. Linux = free software. India = cheap labor. They both help IBM keep their costs down.

  • At the panel yersterday... (Score:4, Interesting)

    by agslashdot ( 574098 ) <sundararaman,krishnan&gmail,com> on Wednesday April 07, 2004 @03:25PM (#8795521)
    At the outsourcing panel [saja.org] yesterday, there were concerns expressed, by one of the panelists Ray Vickery( Asst. Secretary of Commerce, Trade Development in the Clinton Administration) that you will see much more of this in the future ie. American MNCs (Multi-national companies) will end up owning a big, big chunk of the Indian infrastructure.

    Its a sea change from the 80s when IBM was kicked out of India [seacoastonline.com] during Prime Minister Indira Gandhi's administration.

    To really look beyond the short-term glitter and understand what this might lead up to, you must watch Life & Debt [imdb.com], which chronicles the Jamaican tragedy. Once Jamaica agreed to freetrade & opened up its trade zones, in a short span of few months, its entire native diary industry & banana trade was totally destroyed ( Milkpowder was dumped at dirt-cheap prices, and MNCs like Dole undercut the banana trade by bringing in bananas from Mexico ). There are a lot of pluses to free trade, but unless developing nations like India wield their bargaining power carefully, they will sell out to corporations & lose their autonomy.

    But a lot of Indians in the panel felt the American ownership of Indian firms was a good thing, and it could erase some of the anti-outsourcing sentiment prevailing here in the US. Towards the end, the panel discussion got particularly heated up with sharply polarized arguments from both sides. A host of people agreed to talk to us [projectoutsourced.com] about the "sale of India", as one of them put it.No easy answers to be found on this one.

  • Reminds me of a quote from a calendar... (Score:3, Funny)

    by tracer818 ( 765903 ) * on Wednesday April 07, 2004 @03:36PM (#8795646)
    The despair calendar [thinkgeek.com] has a quote:

    "A company that will go to the ends of the earth for its people will find that it can hire them for about 10% of the cost of Americans."

    Calendar photo at: www.despair.com/discovery.html [despair.com]

  • Age Discrimination (Score:3, Insightful)

    by CrazyTalk ( 662055 ) on Wednesday April 07, 2004 @03:57PM (#8795888)
    Maybe working in India isn't all its cracked up to be after all - according to their web site, to work in customer care for Daksh, you have to be between 21-25, and to be a team lead you have to be between 23-27 years old. No age discrimination protection! What happens if you are a customer rep and turn 26? (prolly a moot point, since most of those folks quit after a short tenure). Do they fire you?

  • Nobody got it yet. (Score:4, Insightful)

    by BCW2 ( 168187 ) on Wednesday April 07, 2004 @04:02PM (#8795944) Journal
    If your Amazon or several others, your board is looking at each other saying, IBM owns our help desk? Of course IBM would never use that leverage to make anyone change their practices or attitude, now would they.

  • The Brain Drain Blame Game (Score:3, Interesting)

    by Mulletproof ( 513805 ) on Wednesday April 07, 2004 @04:39PM (#8796454) Homepage Journal
    Ok, you just lost 5,000 local jobs to a call center in India. Yep, it sucks. But half of the people that complain about the outsourcing phenomenom don't realize one very important fact that has been happening for a long time now-- These 3rd world countries have been outsourcing their best and brightest to first world countries for years. It goes both ways. the opportunities in the US, Britain and other countries are so attractive and lucritive that they are quite literally losing their most important resource- Their FUTURE -to other countries. In fact, it's so prevelant that pop culture recognizes it in shows like The Simpsons. You know, the Indian 7-11 owner?

    Ok, so we just lost 5,000 $7.00/hour jobs (hello, $7.00 an hour???). In exchange we are getting hard working citizens dying for a success they can only dream of in their country. Business men. Store owners. Free enterprise.

    Yes, I know some of the jobs lost are worth more than $7.00, but frankly, it's still a fair trade. Go find another one. If you can't, you're not trying hard enough... After all, they are, on less, and succeeding, in your back yard.

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