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.
Gut article! It reminds me of Darwin’s theory of evolution by natural selection. Only the fittest survive.
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