The outsourcing move in software industry is one of the topics that are always addressed in the media but the covering is always done from the point of view of the client that outsources a part of work to 3rd party in other country. I have spent most of my career in software development so far working on outsourcing projects and I feel like that I need to address the pros and cons of it from the point of view of the entity that do the outsourced work. Generally the pros of outsourced versus local projects are:
- The quality and scale of these project is usually considered better that the available type of projects in the local market.
- The profit margin is better given that the hour rate is usually higher than that in the local market.
On the other side the cons of the working on outsourced project are
- The company doing outsourced projects does not have an intellectual property but in many cases the non disclosure agreements between the clients and the company prevents the disclosure of the clients names or projects. I really wonder what could an outsourcing services company list on the product page of its web site (if it has a web site).
- The Communication problem that results from the different time zones and the fact that in most cases especially in small companies the company owner is the one in charge of dealing with clients and doing deals that could put more pressure on the technical people specially in analysis and requirement part.
Outsourced projects could be good alternative from some point of view but in the new world of Web 2.0 where service oriented applications rises I think that any person responsible for a software company in a country like India, China and Egypt should consider shifting some focus on building it own Intellectual Property of Web 2.0 applications.
Please read the following study from eweek about that the outsourcing boom is over
http://www.eweek.com/article2/0,1759,1987497,00.asp?kc=EWRSS03119TX1K0000594
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