Software Engineers of India - Software Coolies or not?

This post was stemmed off a comment made by Ms. Imperfect for Software Engineers - A Knight's Tale.

Ms.Imperfect had written

I was always of the belief that the term that is most appropriate for us s/w professionals was “Software Coolie” :-D

Today, India is a fast emerging economy thanks to the booming Indian industry providing goods and services. As part of the services, is the Outsourcing Industry, serving a menial 5% of the Indian GDP! Yes, we have grown from a meagre US $150mn in 1991-92 to a staggering US $23.4bn [2005-06] industry.

Yet, we are but skilled laborers by its generic definition! We have/had pretty menial jobs as far as the IT industry goes. The best of the work, the true software development, the Holy Grail, if you will,  does not come here. Why? Why not? A small analysis, without any in-depth reading, but mere observation, assumptions and inference :-D!

One reason as to why we have not had core work, so to speak, would be that we are branded as an Outsourcing Industry. What is outsourcing? Well, it's a business model! Essentially, certain tasks, like maintenance, feature enhancement, etc, would require lots of manpower dedicated to it, but won't return much as far as the investments go. So, what do you do? Well, you just give it to people who are ready to do that job for a cheaper price! That in essence is "outsourcing"! Here's something from the Wikipedia.

Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on competencies. A related term, offshoring, means transferring work to another country, typically overseas. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. "Outsourcing" became a popular buzzword in business and management in the 1990s.

India, having a plethora of skilled people, ready to do the job for some greens obviously jumped at the opportunity, and created a huge base for companies in other countries where people are costlier... Here's where the term offshoring takes birth, the 5% GDP supplier of India!

Offshoring is basically transferring work from one particular place to another country for many reasons. In this case, cheap good labor!

India is not alone in this business. Closely following are China, Philippines, etc. Essentially countries where is an immediate source of qualified people!

Now, here's the bad deal. So far India hasn't received exactly top-notch work for many reasons -

  • It hadn't proved to the "offshoring" companies that it's a major player, involving issues like information security, and various other aspects
  • It was too keen in earning money to concentrate on research work
  • They were too comfortable in not taking any responsibility for ownership related work

So, till now, the Indian software engineer - the guy who enjoyed the maximum perks, the best work environment, moderately high salaries, etc was nothing but a proverbial laborer. He was a software coolie :-D! However, things are changing and fast. Today, the Indian software industry is one of _the_ best owing to experience and skill pool. Companies abroad are actually trying and testing the Indian pool for better, and more core work. They have found an awesome business model in generating more revenue [How, I will explain soon] for the company. And at the same time, they are actually getting innovative ideas from India. They are indeed impressed [DUH!] now!

The Indian has been of course on the forefront of every technological innovation ;-), but unfortunately the glory has never been passed to the country. To a certain extent, it's the system and the life led by a typical Indian here. Abroad, once menial things are just that, menial, he gets time to exercise his wonderful brain on other things and hence has been able to contribute to better research :-D!

With the Indian scenario changing and demanding and actually providing this environment, the Indian is finally contributing as well!

Yes, we still do a lotta rote work, however, with many MNCs, Indian and otherwise, a lotta good work is done here :-)! Only sensitive material is still left to be touched by the Indian, but then according to the very basic definition of outsourcing and offshoring, it would never come here anyway!!

So, today the coolie is slowly becoming a master coolie ;-)!

Now to explain the business model. It's kinda simple. According to American standards, a software engineer with my experience and skill level would be paid around $30.00 per hour. That would amount to $240.00 a day [considering an 8 hour day] and causing the company to pay $7200 per month, and $86,400.00 per annum. The costliest of the Indian software industries charge about $20.00 an hour! The amount saved per person per year for a project would be $28,800 per annum. Imagine a 10 member strong team! That would be $288,000 saved per annum for a single project. Now, you see why the business model works for the Americans! In Europe, the human resources are paid more than America, owing to a costlier lifestyle. So, the Indians bag the European projects as well!

Well, anyway, coming back to the reply for the comment, well we are, but slowly we are making it an industry. ;-)! And personally, there's nothing wrong with that, unless you want bigger glory. Btw, the next big thing that the Indians are targeting are business and management consultancy outsource markets :-D!!