Offshoring benefit for Startups

ACM has released a report on Globalization and Offshoring of Software. Here is snippet of what the report says about the startups getting benefitted due to Offshoring to India.

It is tempting to view offshoring by startups (whether to an Indian firm, say, or to their own overseas subsidiary) as an unmitigated loss of jobs for US workers. Nevertheless, the real situation is more complicated. Lowering the cost of undertaking a startup could mean that the barriers to entry are lowered, thus encouraging greater entrepreneurship. The jobs created by this entrepreneurship should be counted against those lost by offshoring. So, correctly estimating employment net effect of offshoring in the case of startups is very


7 Responses to “Offshoring benefit for Startups”

  1. Eric Wroolie Says:

    I really liked this article. You have a very cool blog.

  2. Roger Kondrat Says:

    Santosh, please delete Eric’s comment, he didn’t have anything to add and is just using your post to link to his blog. Not even a relavant link.

    Sheesh. I am certain that as he runs an offshoring blog and business he could if he chose have more to say than just
    ‘I really liked this article. You have a very cool blog.’


  3. Eric Wroolie Says:

    You’re right, Roger. That was a lousy comment. My comment on how much I like the site should have gone into an email (it is not relevent to the post), I suppose. By all means, delete the comment.

    I should have said that I enjoyed the document you attached, Santosh. It is an excellent resource I hadn’t come accross before. We see several different takes on offshoring and small businesses. In this arena, we see a lot of oposing views of offshoring, most of them politically motivated. Offshoring companies tend to make everything rosier than they are and some publications and websites (like seem to search out stories of offshoring failures to report on.

    With Web 2.0 on the rise and so many developers mired in ancient legacy projects, small business will look more towards outsourcing. The software market will expand because of 2.0 and upcoming vista projects. The report mentions the growing market and more projects due to entrepreneurship that may not have gotten off the ground due to high IT costs.

    I’ll leave my link off this post so as not to offend anyone.

  4. Santosh Says:

    Eric, Roger,
    I sincerely apprciate your comments. I believe we can’t grow a community around us unless we allow people to write how they want, be it a link or a detailed view of that they think about the topic. Many a times when we are in hurry, we just don’t get the stuff to write as we want and leaving a link helps.

  5. Exciting Adventures Says:

    Here I am visiting your website…please visit mine too if you have a minute.

  6. richmumpoormum Says:

    Good info, a well thought out site. Cheers

  7. sambennett Says:

    Nice article.

    Creating value quickly is what it’s all about for a startup.

    I think the key benefit that will be realized before long is not the cost savings of outsourcing & offshoring, but the ability to add scale. A startup’s scale is limited to the talent of the founders X the number of founders. (It’s not that simple, of course, there are always mitigating factors and points of diminishing returns.)

    Scale from abroad can add value, but it’s tricky. Those who will benefit will have to be both technical and diligent. And willing to live outside of the box.

    Historically the best hackers build products faster and better, thereby creating value more quickly.

    Intelligent offshoring is an model that provides an opportunity for startups to beat the best hackers in the world at their own game by changing the rules.

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