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."

Comments

IBM First Post

[Anonymous Coward]

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."

Re:IBM First Post

[Anonymous Coward]

No, the Microsoft guy was still there cleaning his ultra-thick glasses (because he's a fucking geek) and the Apple guy was still there checking his hair in the mirror (because he's fucking gay).

Re:IBM First Post

[MisterFancypants]

I hate to come off as the party pooper, but this joke is: A) Very Old (predates all of these tech companies and is probably older than than poster -- used to be told about college students, navy/army, various other competing entities). B) Scientifically suspect. Even if you don't piss on your hands, handling your johnson exposes your hands to coliform bacteria that is generally harmless to yourself but could be a problem for others. So even if you don't piss on your hands, you should still wash them before you go around touching everything at work, you dirty hippy.

What can I say?

[mcg1969]

If you can't beat 'em, buy 'em.

Re:What can I say?

[dslbrian]

call center expertise

Sorry, but these three words should never be used together in a sentence...

In related news...

[tverbeek]

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.

HAHAHA R0FL

[Anonymous Coward]

IBM Snags Leading Indian Outsourcing Firm

Just don't call it Leading INDian OutSourcing" and everything will be fine.

Next layoffs?

[DynaSoar]

I wonder if this will result in more layoffs from the company that once boasted it would never do so. How times change.

Re:Next layoffs?

[stratjakt]

Layoffs, or never-hires?

Who do you think is going to be taking calls for IBM's linux initiatives?

RedHat's outsourced already, noone ever mentions it here because you cant deride the almighty linux vendors.

I called Red Hat tech support once a couple years ago, and talked to some guy who barely spoke english who told me he was in the Philippines.

A free-as-in-beer OS needs a cheap-as-in-sweatshop support staff.

Re:Next layoffs?

[thracky]

Not only has IBM laid off employees but they have a habit of making bad choices that all but nullify their acquisitions of human resource based takeovers. When IBM purchased PriceWaterhouseCooper's consulting firms, everything was all good, until about a month or two ago when these former PWC employees found out they were not going to recieve any of their yearly bonus (~50% of yearly earnings for many of these consultants) because IBM "didn't make enough money" It'll be interesting to see what happens with this one, whether it becomes another PWC or whether they actually take care of the employees.

Re:Next layoffs?

[Kircle]

Wow, I didn't think too many people remembered that. When I was little I lived in an "IBM town" (there was a local plant that employed abut 25,000). After the first layoffs in the early 90's (?) where at this particular plant two-thirds of the jobs were cut (I think a lot of them were white-collar folks), the entire community changed. In my case, I would say roughly 3/4 of my neighborhood moved out within 3 years. It was interesting afterwards to say the least.

I think before if you got hired by IBM, it was pretty much assumed that you would work there until you retired. How times have changed indeed.

Re:Next layoffs?

[He-Nerd]

That's cause RedHat sucks.

Real men roll their own distro and fab their own processors.

Fear me, I am He-Nerd

Nice

[indros13]

Out(sourcing) is now in(ternal).

Outsourcing?

[AcquaCow]

So now that IBM has bought them...is it still considered outsourcing?

Big Indians

[inertia187]

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.

Re:Big Indians

[stratjakt]

He was probably confused because it's spelled "waive".

He was wondering if you wanted to take them surfing or what.

Re:Big Indians

[nelsonal]

Perhaps if you had told him you wanted to waive those options he would have understood you. The silent i makes a big differnce in pronunciation.

Do You Hear That?

[illuminata]

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.

So now IBM can say...

[YrWrstNtmr]

"We're not 'outsourcing', they are an internal company."

Even though the actual results WRT jobs/people will still be the same.

Interesting Combination

[acherrington]

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

Here in Hickory Flat, MS...

[djeaux]

... we are overjoyed. The governor's been telling us that we had to be "globally competitive" & all the recent efforts to have us classified as a 3rd world country are finally paying off.

P.S. No hyphen in Hickory Flat.

Secessionistically, Joe Bob Bubba Earl Senior VP for Information Technology

Lowest Common Denominator?

[re-Verse]

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.

Re:Lowest Common Denominator?

[drinkypoo]

There are basically only two ways to get this kind of protection: Unionization and mandatory licensing/accreditation. For example the proverbial piece of the pie is guaranteed to contractors because non-contractors cannot legally bid a fixed amount on a construction job, they can only work hourly.

We can't unionize, because there are simply too many people who can do what we (systems administrators, network administrators, programmers, etc) can do. They might not do it as well but if it takes them twice as long at one fourth the wage that will be good enough to most people.

However getting worried about this is to see the hill and miss the mountain. Outsourcing is just a tiny little worry. What happens as computers continue to get easier to network, and programming continues to move toward open models with users contributing back source for free? We're all gonna be out of work before long. Now admittedly computers don't manage themselves, but that's because very little effort (comparatively) has been spent on systems maintenance automation as compared to everything else. Now that companies are working hard on maximizing uptime and making it a primary priority, I think we're going to see a return to the olden days of receptionist-as-sysop. A consultant will be called in occasionally to fix the hard problems.

Solution? Realize that Specialization is for Insects. You don't have to take things to Longian proportions where you can fix a computer, pilot a spaceship, knock off one or two fine pieces of ass and still make it home in time to cook dinner and play the bagpipes during supper, all while wearing a tux coat and a kilt, but only being good at one thing is a big mistake. In addition all us non-polyglots are going to be in big trouble in the "global economy" which is only getting more global - as many of us have found as we became rapidly unemployed. Actually, it was the dot-bomb that got me, not outsourcing, but I can only assume that outsourcing has made it harder for me to get work.

Lately I've been working on auto body and paint skills, as well as other automotive stuff. A decent body and paint guy can make six figures if he's willing to put in 40-50 hours, is very good at at least one thing and pretty good at a few more things, and lives someplace people have money. It used to be easy to reach/approach six figures in computers, but not any more. If you make that kind of money now it's because you understand the deep voodoo in some complex system, or because you got astronomically lucky.

Of course, cars aren't going to be a reliable way to make money FOREVER. Raise your hand if you thought computers were the sure money... Now lower your hand if you still have a job working with computers that keeps you above the poverty line. Let's compare counts... Now, lower your hand if you still enjoy your job. Count again, and note how many of the hands are still up... Someday the world will swing away from being car-heavy, simply because it will become uneconomical. You might argue that this is true today but as a form of transportation it is hard to beat cars. If you get a relatively efficient one (read: just about anything japanese that isn't an SUV or a full size truck) then you will get very good mileage, the system requires little maintenance, and almost anywhere you go, public transportation is crappy and expensive. It costs $3 for a day pass in Santa Cruz which has a merely mediocre bus system (A very few buses run until 1am, which is not too bad.) $3 will get you about a gallon and a half of gas right now, which around town in my girlfriend's honda will take you probably a good 30 miles. (It might take you almost as far in my 240SX, which has a stock motor, if I wasn't up on the throttle all the time.) But it's only a matter of time before cars swing around again - They, however, will probably continue to hold their place of prominence longer than I am alive.

Why is this a problem ?

[iMaple]

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

Re:Why is this a problem ?

[Vancorps]

Because IBM in particular was founded on taking care of its employees, not just kicking them and ruining entire communities. There is a lot of damage done by these actions and absolutely no attempt to make it easier. Granted there is no law that says what they are doing is wrong, but it does go again James Watt's intention when he founded the company.

Also, businesses despite what I see in your post are not just about making money, if that were true I wouldn't have Christmas parties and bbqs and an owner I can go out for beers with. Sometimes its about accomplishing a goal and human resources or rather, the people you employing being a better term are your means to reach the goal. If they are successful you are successful, destory any and all vision of their future doesn't exactly help matters either.

My father works for IBM, has for 30 years, he know his time is coming and he's preparing, but he doesn't know when, will it be this summer? The fall? He has no idea how long he'll be able to stay.

Re:Why is this a problem ?

[composer777]

One of my favorite catchphrases is to sarcastically say,"Why shouldn't someone be allowed to do X?" It's a lot of fun to do, especially after completely demolishing someone's perspective by shining a blinding light on reality.

It does no good to ask these questions without taking a serious look at reality. When you do, you will find all the answers that you need. There is no doubt that limiting freedom should not be done in an arbitrary and reckless manner, and that the burden of proof is on those who seek to limit freedom. However, all one has to do is look at the evidence to see that market fundamentalism is a horrible and flawed social policy. No one in their right mind asks questions such as,
"Why shouldn't people be allowed to trade stocks using insider information? Who are we to limit their freedom of speech?"
At least, no one that has studied the Great Depression.

And, if we take a look at what is happening with "Free" trade, we can see that it is being used as a tool to crush the weak. It is placing property rights above all other rights, in fact, it doesn't even recognize such basic things as being able to eat, or have decent healthcare as rights. In the point of view of market fundamentalists, the only things worth protecting are the rights of IBM, and those with property, to enjoy their property, and everyone else can starve and die, since they have no rights. This is all good and well, until one realizes that there is no logical basis for rights at all. Rights are whatever we decide them to be. Therefore, it makes no logical sense to promote IBM's right to their property any more than it does to promote the right of working people to have food, shelter, and decent medical care. We decide what should be a right based on what kind of society we want. If we want a society where IBM can dump a thousand people out on the street on a whim, and those people have no protections, then we can keep going in the direction "free" trade and market fundamentalism. If we want a society that treats each human being with dignity and respect, and gives everyone in it a way of contributing (including the 8-10% that are now unemployed), then we can give more priority to things such as a right to work, right to medical care, etc. There is no logic to it, it's based on what you feel is right. Logic is a tool, and it's application to this kind of problem is severely limited.

The reason why IBM, in my opinion, shouldn't be allowed to do whatever they want with their property is because property rights should be balanced with other desirable social ends. Honoring property rights should not trump all other social policy. If IBM moves their money to some other country, and as a result, thousands of people lose their jobs, the environment of the world takes a turn for the worse as IBM and others take advantage of India's inferior environmental protections, and the overall standard of living takes a nose dive, as IBM pockets the difference in increases profits, then we need to take a serious look at whether IBM's right over their property should come above other's standards of living, the envrionment, etc. These things do not operate in a vacuum, and if you want to understand the issue, it pays to realize that what IBM does affects not only itself, but a large amount of other people. Therefore, IBM should behave with an appropriate amount of responsibility, that is, if we want a society that behaves in a sane manner. My ownership of a 700 watt stereo does not give me the right to turn the volume up any more than IBM's right to it's property should give it absolute power over that property. The same reason why we outlawed slavery can be used as a basis for arguing against free trade. Slavery was outlawed because it was understood that freedom of contract should not take precedence over things such as a minimal standard of living for all. In a society that places freedom of contract, and property rights, above all else, the logical extension is, of course slavery, as those without po

Reasons OTHER than Outsourcing

[Amadaeus]

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.

Re:Reasons OTHER than Outsourcing

[Tablizer]

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

We should pressure India to open up its markets and provide the SAME AMOUNT of trade from the US. Why do so many contries try to become producers instead of consumers?

Why should we keep running trade deficits with every country? That just makes us the dumping ground for cheap trinkets and services of all the newbie economies.

If they want to take advantage of our consummerism, then they should also form equal consumption on their part. No more free lunches for those guys.

Look at those numbers

[g-san]

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)

A big deal indeed

[Pranjal]

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!

Morale in the trences

[sfriedrich]

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.

Re:Hey, it pays...

[stevesliva]

Mainframes? Linux servers?

Slashdot quandary: IBM good or bad?

[Retired Replicant]

IBM supports Linux, and is the company who wishes wholeheartedly to squash SCO like a bug.

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.

ontopic joke!

[Thud457]

Two lions escape from the circus. They split up to increase their chances but agree to meet after 2 months.

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.