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IBM Snags Leading Indian Outsourcing Firm
theodp writes "In one of the biggest foreign acquisitions in India in the past few years, according to ZDNet, IBM will pay an estimated $150-$200 million to acquire Daksh, India's third-largest back-office services company. The deal will give IBM access to privately held Daksh's 6,000 employees, who mainly offer call center services to 13 clients, including Amazon.com."
A guy from Microsoft, a guy from Apple, and a guy from Sun are at a conference. During a break they all go to the restroom to take a leak.
After they finish, the Microsoft guy washes his hands, takes a whole bunch of paper towels and dries his hands REALLY well. He turns to the others and says,
"At Microsoft, we have to be thorough."
The Apple guy then goes to wash his hands and takes a single paper towel and dries his hands perfectly with it. He smugly says,
"At Apple, we have to be thorough AND efficient."
The Sun guy just walks straight out the door without even washing.
"At Sun, we don't piss on our hands."
If you can't beat 'em, buy 'em.
In related news, Daksh announced that it would be closing its domestic operations and laying off 5,500 Indian workers, in favor of opening offices overseas, in the developing world. Offices in Kinshasa (Democratic Republic of Congo), Pitcairn Island (South Pacific), Ashgabat (Turkmenistan) and Hickory-Flat (Mississippi, USA) are planned.
http://alternatives.rzero.com/
IBM Snags Leading Indian Outsourcing Firm
Just don't call it Leading INDian OutSourcing" and everything will be fine.
I wonder if this will result in more layoffs from the company that once boasted it would never do so. How times change.
"I may be synthetic, but I'm not stupid." -- Bishop 341-B
Under capitalism man exploits man. Under communism it's the other way around.
Remember, IBM never gets into a business that others haven't already proven profitable.
So now that IBM has bought them...is it still considered outsourcing?
up 12 days, 22:30, 2 users, load averages: 993.20, 994.21, 994.56
*makes note to limit user processes...
I've talked to some of these call center operators. I was trying to activate one of my credit cards (the automated activation wasn't working I guess), and when I was done, they asked me a few marketing questions. They wanted me to add payment protection and some other insurance options. I said that I would like to wave those options. He seemed confused by my response, and asked what I meant by waving those options. Clearly, this was not one of the responses they had been trained to deal with.
So if you're disgusted by the practice of outsourcing, make your dialog with people you suspect as being an outsourced employee as complicated or colloquial as possible.
A programmer is a machine for converting coffee into code.
I hear the voices of 6,000 worried Indians, afraid that their jobs might be sent to the US because they were bought out by an American company.
Until Slashdot fixes the funny modifier, use insightful or interesting. The poster knows your intentions.
"We're not 'outsourcing', they are an internal company."
Even though the actual results WRT jobs/people will still be the same.
I remember seeing an IBM ad during the NCAA Championships touting "IBM will do you HR for you so you can focus on your company" or some jive like that. Combine this with today's activities and you get a company that will do your little dirty deed for you, so your company doesn't look bad.
Just my $.02
Victory is gained, not in knowing your opponents next move, but in preempting them.
P.S. No hyphen in Hickory Flat.
Secessionistically, Joe Bob Bubba Earl Senior VP for Information Technology
"Obviously, I'm not an IBM computer any more than I'm an ashtray" (Bob Dylan)
I understand, this is how capitalism works, and this is saving so many businesses - and probably creating a lot of jobs somewhere else. I still get quite scared by it though. Its probably just my instinct as a human to try to preserve what I already have. I mean - yeah it should be a fair world and everyone deserves a piece of the pie, And I have no more right to work than anyone anywhere else - But the idea of going from the income that I barely get by on to a wage one third of what it is now, just to compete with someone who has never experienced indoor plumbing or a room of their own terrifies me.
I understand that i have no right to the lifestyle I live now (and its not extravagant by any western standard... but I've grown quite used to it). I fear the future if even the higher skilled jobs, like IT, become minimum wage - or worse.
I cant figure out what any logical person could have against outsourcing.
Yeah I know abt the diminshing jobs in the IT sector (And I guess I am writing this since I dont work in the It sector).
After all if IBM can get something done for a fraction of the price in the US why wouldnt or shouldnt they go for it.
This is not Soviet Russia you know
It seems to me that IBM may be doing this not for the sole reason to outsource, but to gain market share outside the US in terms of government contracts. The Indian Government is fiercely isolationist when it comes to contracting out IT and other services, and IBM acquiring Daksh may just get their foot in the door.
------
Amadaeus
The last bastion of Mathie-ism
Daksh is an early mover in a sector that is thriving by tapping India's English-speaking workers to provide services such as accounting and insurance claims processing to foreign customers looking for low-cost outsourcing.
So correct me if I'm wrong, but this seems to be an investment rather than a direct acquisition.
In other words, these 6,000 employees wouldn't be taking tech jobs from the U.S.
Go find me an American company that has 6000 people and you can pay $150Mil for.
They're getting people for $25k a pop.
(ok, $33k if they get $200Mil, still a BARGAIN)
You insensitive clod !!! you dont care about non-Americans do you ( By the way do they really exist or is it all SCO propoganda)
Of course if IBM had bought a similarly staffed US or European company, it would have cost 5 times more.
*rimshot*
A feeling of having made the same mistake before: Deja Foobar
Is IBM going to lay off those 6000 employees and outsource the work to Guatemala?!
If someone says he and his monkey have nothing to hide, they almost certainly do.
Daksh is one of the biggest call center operations company in India. It was an early mover and has built up a significant repository of top clients in US. Infact there is an army of employees working for them and you can see many of their ads in the local newspapers every week for hiring new people. Interesting fact is that Citigroup and General Atlantic Partners and Actis hold 2/3rd of the equity in the company. This deal is going to make the Chief Executive and some employees in Daksh and the equity companies millionaire's overnight. Infact they recently opened a center in Philippines so it gives IBM the foot print in India as well as Philippines. IBM snatched a big one here!
I have a -very- smart friend who works in the bowels of IBM: The top management may be back slapping each other about how they're doing financially right now but, they're bleeding talent badly and they don't realize how badly they're actually harming the company's long term prospects (some would say, "don't care"). The capable tech folks left at IBM are as bummed as any of us about outsourcing in general but they're also pretty unhappy with the low quality of the "results" that they're getting from "teams" in India -and- China (not to mention the viruses). We have yet to see what the actual IBM customers will think of all of this but it doesn't yet look like it's going to make for better products.
RedHat's outsourced already, noone ever mentions it here because you cant deride the almighty linux vendors.
You need to pay more attention! Open season has been declared on Redhat since they killed their desktop distro. Deride away!
I used to work at an American call center awhile back. We were in combination with an Indian call center. I'd get irate customers almost in tears because they just spent an hour on the phone with someone they could barely understand and I'm the first American they could speak to all night. Nothing against Indians, but you can not have people with thick accents working phones. It's bad enough when a southern company's customers have to call the mid-west to try and communicate, it's 10x worse when the person isn't a native english speaker. I've had my share of frustrations lately too. It takes twice as long to get information out of someone you can't understand.
They might as well change their name
IBM has over 300K employees. 20K in India is less than 1%. IBM has employees in almost every contry.
So which part of International Business Machines is confusing?
- - - - - - - - - - -
I am a programmer. I am paid to produce syntax not grammar. Deal with it.
*Puts down his book on introductory Chinese and sighs...*
Back to the drawing board.
Will someone please explain to me why, if we're running a trade deficit and have been for next to forever, the dollar is still so strong compared to other currencies?
___
It's the end of my comment as I know it and I feel fine.
"No one ever got fired for being bought by IBM."
taken! (by Davidleeroth) Thanks Bingo Foo!
But on the other hand, IBM is outsourcing your job to India.
But maybe there is consistency here. Linux = free software. India = cheap labor. They both help IBM keep their costs down.
When they finally meet, one is skinny and the other overweight.
The thin one says: "How did you manage? I ate a human just once and they turned out a small army to chase me -- guns, nets, it was terrible. Since then I've been reduced to eating mice, insects, even grass."
The fat one replies: "Well, *I* hid near an IBM office and ate a manager a day. And nobody even noticed!"
See, IBM has had a long tradition of too many chiefs, not enough err... Indians.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Its a sea change from the 80s when IBM was kicked out of India during Prime Minister Indira Gandhi's administration.
To really look beyond the short-term glitter and understand what this might lead up to, you must watch Life & Debt, which chronicles the Jamaican tragedy. Once Jamaica agreed to freetrade & opened up its trade zones, in a short span of few months, its entire native diary industry & banana trade was totally destroyed ( Milkpowder was dumped at dirt-cheap prices, and MNCs like Dole undercut the banana trade by bringing in bananas from Mexico ). There are a lot of pluses to free trade, but unless developing nations like India wield their bargaining power carefully, they will sell out to corporations & lose their autonomy.
But a lot of Indians in the panel felt the American ownership of Indian firms was a good thing, and it could erase some of the anti-outsourcing sentiment prevailing here in the US. Towards the end, the panel discussion got particularly heated up with sharply polarized arguments from both sides. A host of people agreed to talk to us about the "sale of India", as one of them put it.No easy answers to be found on this one.
liar...
Ok what if i start an american computer manufacturing company. all parts are made here in the us.
That $1000.00 Dell, my equilivant will be $6500.00
there is no way in hell you would buy it because it has a Made in the USA sticker on it. Americans are cheap bastards that love their dirt cheap computers and electronics. They WILL NOT pay a premium for domestic products, that was proven without a doubt in the 80's when textiles went to hell as you could buy what you wanted at 1/3rd the price from overseas even AFTER the government protection fees were paid.
I so love to shoot down patriotic jerks that wave the flag and talk like they would do what it takes to save american jobs and support america.. but I'll bet that over 80% of what you own was made, manufacturered and or assembled outside the USA... espically clothing and electronics.. hell your carpet in your house is more than likely a south american product.
Yes even most american cars are Assembled in either Canada or Mexico, or had major portions assembled outside the country.. Many FORD midsize cars are completely made by the KIA corperation in korea or other forign car companies... My family was big in the automakers, a 3 generation UAW family decimated by ford and GM whoring out assembly and manufacturing to mexico and other countries.. no love for those companies that destroyed towns os they can chase the almightly dollar... go visit Flint or Pontiac michigan and see what those great american companies did to the american worker.
so until you are willing to pay a significant premium for the MADE IN USA mantra... drop the act.
Do not look at laser with remaining good eye.
We have yet to see what the actual IBM customers will think of all of this but it doesn't yet look like it's going to make for better products.
It's all par for the course. Every time some new business buzz-concept comes along, every business writer drizzles saliva all over it and writes about how amazingly wonderful it is, and about getting "left behind". Every MBA reads the series of articles, and somewhere over the year of getting this stuff hammering at them, decides that they need to take advantage of the latest and greatest. Inevitably everyone moves at once, which happens too far and too fast, and as a result most of the people moving with the herd come out bloodied and worse off than they started.
Let me start in the late eighties going into the nineties. IT spending was a big thing. Huge amounts of money were directed into IT, lots of people (an unsustainable number, which now screws over all the people having to deal with an oversaturated job market) were hired, incredible amounts of money were blown on completely unnecessary products. Oracle installations and high-end hardware cost *stupid* amounts of money, but people paid it. "Computers" was a buzzword, and to "computers" MBAs flocked. Microsoft got really, really rich.
Then, in the late nineties, "Internet" hit the radar. The government was pushing it as a big commercial deal, economists were enthralled, everyone was convinced that *now* was the time to get in on the ground floor. Business rags raved about the "Internet". Sure enough, stupid amounts of money (unsustainable amounts) were committed. The dot-com boom happened...and then crashed.
Now, in the naughties, "outsourcing" has become insanely popular. If an MBA hasn't considered "outsourcing", he should have a good reason why. So we're going to shove a whole lot of people to various countries, go overboard in doing so, and burn ourselves again.
Whenever the business press catches on to something and starts to get excited, it's a really good time to run in the opposite direction.
May we never see th
The despair calendar has a quote:
"A company that will go to the ends of the earth for its people will find that it can hire them for about 10% of the cost of Americans."
Calendar photo at: www.despair.com/discovery.html
When will our nations captains of industry realize that putting every American out of work is not conducive to getting their products sold to Americans!?!?
Mac OS X and Windows XP working side by side to fight back the night.
Now they'll be able to avoid calling it "outsourcing" or (worse) "offshoring", and at the same time make you move to India and take a 90% pay cut -- "it's just a transfer".
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt
Maybe working in India isn't all its cracked up to be after all - according to their web site, to work in customer care for Daksh, you have to be between 21-25, and to be a team lead you have to be between 23-27 years old. No age discrimination protection! What happens if you are a customer rep and turn 26? (prolly a moot point, since most of those folks quit after a short tenure). Do they fire you?
If your Amazon or several others, your board is looking at each other saying, IBM owns our help desk? Of course IBM would never use that leverage to make anyone change their practices or attitude, now would they.
Professional Politicians are not the solution, they ARE the problem.
You seem to be missing the whole point of trading. We do not trade to give people jobs. We trade to get stuff. If other countries are willing to send us stuff without us sending them stuff (which is what a trade deficit is), that is *good* for us. It means that we are getting free stuff.
The problem is that we have many unemployed people in industries where we are in surplus. Increasing exports to India won't fix that. They won't buy IT services; they'll buy things they need, like grain or pharmaceuticals. That still won't help IT workers (and might hurt us if it increases prices of food and health care).
For unemployed IT workers to find jobs, one of two things needs to happen: one, the market for IT could increase sharply (don't hold your breath); or two, IT workers could move into fields that are hiring. Unfortunately, most IT workers would be considered unskilled labor in other fields, so we are reluctant to take the pay cut involved in doing this. Also, most industries are more interested in skilled (in the work of that industry) workers than unskilled workers.
The only thing that we get from increasing exports without increasing imports is money. Since we (as a country) have the ability to print money (much cheaper than trading for it), that is not helpful. Instead, we need to fix the structural issues with the economy (i.e. move the unemployed into industries that are hiring) and produce more stuff for *us*. That way, we get the benefits of both the jobs *and* the stuff produced.
Ok, you just lost 5,000 local jobs to a call center in India. Yep, it sucks. But half of the people that complain about the outsourcing phenomenom don't realize one very important fact that has been happening for a long time now-- These 3rd world countries have been outsourcing their best and brightest to first world countries for years. It goes both ways. the opportunities in the US, Britain and other countries are so attractive and lucritive that they are quite literally losing their most important resource- Their FUTURE -to other countries. In fact, it's so prevelant that pop culture recognizes it in shows like The Simpsons. You know, the Indian 7-11 owner?
Ok, so we just lost 5,000 $7.00/hour jobs (hello, $7.00 an hour???). In exchange we are getting hard working citizens dying for a success they can only dream of in their country. Business men. Store owners. Free enterprise.
Yes, I know some of the jobs lost are worth more than $7.00, but frankly, it's still a fair trade. Go find another one. If you can't, you're not trying hard enough... After all, they are, on less, and succeeding, in your back yard.
You need a FREE iPod Nano
Of course as with all things the idiots who came up with this plan either left the company with large stock option packages (Bill Price, VP of customer service) or got promoted. I would be surprised if an audit of the outsourcing to Daksh showed that any money had been saved at all.
Many of us wear clothes produced in China, drive Japanese cars, and put cheap foreign memory in our assembled overseas computers. A few mundane IT jobs go overseas and then we are up in arms, demanding special favors from the government. I don't get it.
1-And outsourcing will improve this how?
Because India has always produced high quality software. At least that's the perception. A quarter of the price and four times the quality is a pretty hard deal to pass up.
2-Some but if you read through the site above, you'll note that a lot, in unemployemnt are NOT "DeVry this" or "ITT" that.
Everyone is affected by this, MIT grads along with junior college dropouts. But when entry level jobs start at $60K, experienced workers are going to want a proportionately higher salary.
There is a cost to non-local development in the form of inefficient management, communication problems, training issues, and with overseas development, customer satisfaction as well. When the cost for a local worker is only 50% to 100% more than the remote worker, it can often be cost effective to stay local. But when the cost of local is 500% to 750% more, then it's much easier to justify going to for the cheap labor.
3-If free trade was about Level Playing Fields, then we would be insisting that India and other countries would raise their standards, instead of lowering ours.
This is always the argument that is raised. But we don't have any say over the internal policies of another nation. We only have control over our own. Why should we punish India for accepting our dollars, when at least some of the problem is our own damned fault?
A level playing field doesn't mean that everyone is equally handicapped. It means that the rules of the game are the same for all participants. The distinction is subtle, to be sure. But when we impose additional rules upon ourselves that we demand of no one else, then that is just handicapping ourselves.
When more than a half of my income goes towards taxes (income, sales, property, etc., both local and national), then something is seriously out of whack. Add to this the non-monetary cost of bureaucratic paperwork, and there's quite a bit of room to shrug off a few of those self-imposed handicaps.
To be absolutely crass and selfish about it, I would rather have a job and pay into my own retirement fund, then to be unemployed with social security. I can live with a few more potholes in the roads if it means I can be employed.
Don't blame me, I didn't vote for either of them!