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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.
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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)
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.
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.
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
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.