Software Offshoring Has Become the Norm


    Consulting firm Sand Hill Group has just released a $350 report on software offshoring, of which I read through a brief and freely available excerpt.

    According to the report, which surveyed people from 50 different firms (and who wouldn’t answer survey questions when it’s a venture capital company calling?!), only 12% of software companies say they’re not offshoring or aren’t planning to do so. Two thirds said offshoring is "accepted as a normal business practice today."

    What are they sending outside the borders? Primarily functions such as support and testing. But a "significant portion… are also sending core product development offshore — a move once thought to be too risky."

    In this CNET interview, Sand Hill co-founder M.R. Rangaswami said many companies expected far greater savings in offshoring that they actually experienced. But they were still "satisfied" with the 40% reduction in costs they experienced.

    Many companies are continuing to hammer on costs by seeking alternatives to "well-established" offshore centers such as Bangalore. Among the options he cites: Hyderabad, Pune and Chennai.