IBM's Profit May Rise as Shifting Jobs to India Reduces Costs 1791

Robert Kolker

Neither statement is very likely true. If you'll

The stats provided indicate that, as some suspected, IT outsourcing has *generally* been used to fill the gap caused by increased demand. The other major component is outfits like Microsoft trying to get a beachhead in India for strategic reasons.

No, it's simply been redefined. You may not be aware of it, but TQM is now *deep* in software culture, and that's what given shape to professionalism, good or bad.

If you mean "software is a profession", that's increasingly true, actually - more and more, work is transient and specialized, amenable for a "hanging out a shingle" business model.

Software stopped *being* a commodity about 1999. The Microsoft shrinkwrap model is toast, especially if it's delivered over the net. Software is, and will increasingly be, a service.

You are now describing the first Baboo Bust.

They still do. The guys I know bill out at $75+ an hour, which is pretty close to 1996 $50.

Warm body 1099 jobs are going for $40 an hour.

*They* still do, too. Likewise Peoplesoft guys... just not in the Boston metro area...

Only the most recent. It's cyclical.

Phffft. Wait a couple years - it'll be back. Might be four.

Thank God for that.

Okay. Here is what you are missing: 1) In 199x, Bernie Ebbers predicted infinite, exponential growth in demand for bandwidth. 2) People bought this. Ha! 3) VC people, blunted by the 1998 crash of the bhat, needed somewhere to land all the funding previously going into the First Baboo Bust. 4) The big telco equipment makers plus the big network guys decided they could play, too, on the heels of the stauratioon of the Sprint-MCI long distance buildout. 5) Frenzied M&A-based speculation ( speculating on speculative VC companies speculating on bandwidth demand - yes,m that;s *three* levels of indirection) led to an overheated meltdown mess in 2000.

Nothing *fundamental* has changed - see the curves in the white paper on the ACM site. It's still rising rapidly, just not rapidly enough to emulate the sort of margin a 1980s crack kingpin could expect. But Intel just cored a $900million VC round for Clearwire to resell-deploy WiMax stuff last week...

But this is roughly how the cycles in railroad worked, until about the 1910-1930s timeframe ( when Robber Barons beat the thing into submission ).

-- Les Cargill