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China outsourcing

Published December 5th, 2007 in Outsourcing. 1 Comment

AP reports on Dalian’s ambitions as a new outsourcing capital:

Along with SAP, Hewlett-Packard Co., IBM Corp., Britain’s BT Group PLC, Japan’s Yokogawa Electric Corp. and some 230 other foreign companies have flocked to Dalian in the last decade. Now, a critical mass of development is coming. Ground broke this year for both a $2.5 billion Intel Corp. factory and a $6.5 billion nuclear power plant for the city…

The revenue of $1.9 billion generated last year in Dalian by operations such as writing and testing software, operating computer systems and accounting and finance is still dwarfed by outsourcing in Bangalore. The Indian city, Asia’s leader in the industry, brought in $11.3 billion from such operations in 2006.

Tags: China, India, offshore, outsourcing, SAP, software, sourcing

Real estate investor disappears

Published October 26th, 2007 in Outsourcing. 0 Comments

This just in from the Sofia Echo:

The website of Kendar Holdings, the investment company owned by solicitor Michael Lynn, has been suspended, the Irish Independent reported on October 22 2007.

Lynn, who has over 105 properties in Slovakia, Bulgaria, China, Spain, England, Dubai and Ireland, was alleged to have taken out multiple mortgages on several properties with major Irish banks, with alleged loan liabilities of more than 26 million euro…

The website was suspended on October 21 after a week in which several banks moved to protect their loans and recover some 26.3 million euro owed to them by Lynn.

The court case against Lynn would continue on October 22, the Independent reported.

This might explain why no one returned my emails when I was selling Kendar.com a few months ago!

Tags: boom, bubble, investor, Real estate

VMware bullish IPO

Published August 14th, 2007 in Outsourcing. 0 Comments

VMware raised close to a billion USD in an IPO second only to Google in recent IT history. Here’s a bit more details on the stock offering and VMware’s solutions.

Analysts say VMware’s shares should soar to a significantly higher value than the opening price. “This could be in the $34-to-$35 range at the end of the trading day,” said Brian Babineau, a Silicon Valley-based analyst with Enterprise Strategy Group. “Their business model and their growth due to their technological competitiveness is extremely well received by customers and the marketplace as a whole.

“This has more of a Google feel than a traditional enterprise software company,” he said. “They’re one of the only tech companies that have shown upward of 80 percent annual growth consistently in the last few years.”

Matrix Partners venture capitalist David Skok said VMware is prospering from “a white-hot market” in the virtualization software that it helped pioneer. “This is the hottest thing going right now in the computing world,” said Skok, a director of VMware rival Virtual Iron.

Virtualization represents a software solution to a hardware problem, enhancing the computing power and flexibility of information-technology systems, while reducing energy costs.

Tags: Bulgaria, developers, IT, outsourcing, software, VMware

Bulgarian nurses pardoned

Published July 24th, 2007 in Outsourcing. 2 Comments

This is a piece of news that’s not outsourcing-related. Since it made CNN’s frontpage, however, it’s impossible to ignore.

Five Bulgarian nurses and a Palestinian doctor were pardoned by President Georgi Parvanov upon their arrival in Sofia on Tuesday after spending eight-and-a-half years in prison in Libya.

The six medics, who were sentenced to life in prison for allegedly contaminating children with the AIDS virus, arrived on board a French presidential plane with French first lady Cecilia Sarkozy and the EU’s commissioner for foreign affairs, Benita Ferrero-Waldner.

The group was immediately greeted by a delegation of government officials and family members.

“I waited so long for this moment,” nurse Snezhana Dimitrova said before falling into the arms of her loved ones, The Associated Press reported.

“This is the result of very tough and long negotiations … between the European Union and Libyan authorities,” Bulgarian Foreign Minister Ivailo Kalfin said. “It has been a long discussion and debate with Libya until we reached this agreement.”

Tags: Bulgaria, crisis, lybia, nurses, resolution

Indian outsourcers

Published June 26th, 2007 in Outsourcing. 2 Comments

Bill Burnham has a post that discusses Indian outsourcers and their impact on the free software movement.

Let’s post the two examples he’s giving:

For example, one Open Source company mentioned to me that several Indian outsourcers were aggressively using their distributions as way to cheaply prototype solutions for clients without having to actually buy a license. If the clients bought the prototype, the outsourcer could deliver the solution with the “free” open source software embedded in it and stick the client with the maintenance. The pricing headroom created by the lack of up front license fees in the project allowed the outsourcer to lower prices and/or improve margins on their upfront work, while the Open Source software firms got the back-end revenue stream. A real win/win.

Now, the part where Indian outsourcers actually hurt open-source companies, who rely on their support fees to break even.

For his CRM system, his outsourcer recommended a well known Open Source CRM platform and even offered to customize it for his needs. This would seem to prove the above point in spades expect for the fact that in addition to the customization work the outsourcer offered to do all regular maintenance and support for $10/hour. This meant that my friend had no need to buy a support contract from the Open Source CRM company which means, being a cash poor entrepreneur, he didn’t.

If there’s one thing for certain, it’s that you can’t argue with $10/hour. Any organization faced with the option to choose between their “trusted” outsourcer at $10/hour, and for example, Red Hat’s $100+ support, will choose the cheaper option.

In a flat world (as Thomas Friedman would have it), considering that the quality of the support is the same, it’s not economically efficient to hire resources in the US and ask them to support a global clientele. Red Hat certainly has the option to go India or China and get the best support resources there.

Tags: Bill Burnham, developers, India, IT, outsourcing, software, Thomas Friedman

Bush visits Bulgaria

Published June 11th, 2007 in Outsourcing. 0 Comments

Bush visits Bulgaria US President Bush arrived in Sofia yesterday. The scoop from the International Herald Tribune (AP):

In Sofia, thousands of Bulgarians — many waving small American flags — lined the cobblestone main street through Nevsky Square as an honor guard played both countries’ national anthems. Bush greeted Bulgarian soldiers who have served in Iraq and Afghanistan, and then worked the crowd, reaching in to shake hands as the locals beamed and cheered.

A bit of recent history in the next paragraph:

Bulgaria shed communism in 1989, and it became a member of NATO in 2004 and the European Union in January. Its parliament recently extended the Iraq mission until March 2008, and last year, Bulgaria signed an agreement with Washington allowing U.S. troops to use Bulgarian military facilities.

In a purely outsourcing context, it makes me think about the price of stability but this begs a separate post.

Tags: Bulgaria, Bush, Europe, IT, outsourcing, President, software

Vietnam elections and outsourcing

Published May 18th, 2007 in Outsourcing, Offshoring and Software. 1 Comment

Vietnam outsourcing Vietnam is holding general elections on Sunday.

The ruling Communist party (I mean Workers party!) is the undisputed leader. Less than 20% of the candidates are NOT members of the Communist Party, so the result cannot be that surprising.

In the mean time, courts have put on trial and jailed a number of political activists and journalists. Two of them were occused of attempts to sabotage the elections.

It’s not cleat what these elections will mean for the thousands of businesses who have invested in Vietnam on the promise of a liberlized market. Intel has already committed to build a billion-dollar chip factory.

One thing is certain - whatever the Communists decide to do, they better not scare these investors. China is a good example of a roaring economy with waving red flags.

Tags: China, communism, elections, IT, outsourcing, software, Vietnam

Outsourcing local journalism

Published May 11th, 2007 in Outsourcing, Offshoring and Humor. 0 Comments

Outsourcing certain IT functions is one thing, outsourcing local journalism seems quite another. This ad has been generating a media storm:

We seek a newspaper journalist based in India to report on the city government and political scene of Pasadena, California, USA.

Here’s the gist of the story from Yahoo News:

Outsourcing first claimed manufacturing jobs, then hit services such as technical support, airline reservations and tax preparation. Now comes the next frontier: local journalism.

James Macpherson, editor and publisher of the two-year-old Web site pasadenanow.com, acknowledged it sounds strange to have journalists in India cover news in this wealthy city just outside Los Angeles.

Admittedly, this story sounds like it’s Dilbert on outsourcing. I heard the interview he did for BBC and frankly he made his point clear: he feels someone in India will do a better job at watching the local counsel meetings (they’re streamed online) and then summarizing them.

The journalist at BBC who was doing the interview didn’t feel too comfortable with the concept though … I bet he was seeing headlines: BBC outsources news gathering to India!

Tags: BBC, humor, India, journalism, outsourcing

BBC on WoW outsourcing

Published May 1st, 2007 in Outsourcing, Offshoring and Software. 0 Comments

World of Warcraft has been a million-dollar business for Blizzard but it’s a million-dollar business for companies who sell WoW gold, accounts, and more.

Game outsourcing has been here ever since Ultima Online came out more than a decade ago. Diablo 2 item trading was quite a big business but recently eBay banned the auctions of virtual goods.

BBC has an article on the implications of game outsourcing, here’s a few quotes:

Qin Shen, who works for a company called Ucdao.com, says: “Many white collar workers want to improve their character on their own, but they do not have much time. They need to go to work in the day and they don’t have the energy to improve at night, so they need someone else to play for them.”

But to say this is hugely controversial among the game’s community is putting it mildly. I posted a message on one website asking for people who buy gold to get in touch - and got a number of quite hostile responses.

Eventually, I did find someone who had bought gold.

“I have a life outside of the game that’s certainly much more important, so the few precious hours I do get to play on my game I don’t want to spend doing the same thing over and over again to get in-game money, when I could just buy that and do the stuff in-game that I actually enjoy,” he said.

Tags: Bulgaria, China, Europe, global, gold, IT, outsourcing, software, wow

Game outsourcing

Published April 26th, 2007 in Outsourcing, Offshoring and Software. 1 Comment

Ubisoft might be expanding their Bulgarian operations but this isn’t the game outsourcing I’m talking about.

Buy WoW Gold A new wave of game outsourcing has sprung - mainly on the back of MMOs and has risen to prominence with Blizzard’s blockbuster MMO - World of Warcraft.

The game has claimed seven million lives so far and a whole cottage industry has emerged that delivers simple services and virtual items to the players.

The bulk of the people who procure the items are based in China. In fact, this is the way many people in China are able to pay for the game - by acquiring items and gold and then selling them for real money.

The phenomenon has become so wide spread that Chinese “farmers” are subject of abuse on many servers. The main reason for the special attitude towards “farmers” comes from the fact that they would indiscriminantly collect any rare resources they can lay their hands on - leaving other players empty handed waiting for a re-spawn.

While this isn’t traditional outsourcing, it follows the same model. Looking at it, there might be a niche for an European player in this hot virtual items market.

I haven’t heard of Bulgarian farmers though… maybe it’s just a matter of time before some of us return to our agrarian roots!