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You know as a programmer myself for the last 15 years I can see how the market has changed and everything is becoming part of the global economy which means the

You know as a programmer myself for the last 15 years I can see how the market has changed and everything is becoming part of the global economy which means the rates are a lot lower which means Ukraine and India are playing a bigger and bigger role I could see private Equity trying to lower costs by outsourcing. I think there's a fundamental flaw in the idea that you can just pay for cheaper labor- as Steve Jobs has said before the difference in a good programmer and an outstanding programmer can be 50 to 1 or 100 to 1 you can't capture that by trying to cut your cost from $100 an hour to $20 an hour. Software inherently is one of the most scalable business models in the world the cost of manufacturing is almost zero all of the cost is in the design they should be able to make money. The mindset of being a consulting firm has to be changed.

richmarr 9y ago
> I think there's a fundamental flaw in the idea that you can just pay for cheaper labor- as Steve Jobs has said before the difference in a good programmer and an outstanding programmer can be 50 to 1 or 100 to 1 you can't capture that by trying to cut your cost from $100 an hour to $20 an hour. Perhaps you left something out, but the argument that high quality programmers have to be expensive might be interpreted as assuming that high quality programmers only exist within high-salary countries like the USA. I assume you didn't mean it that way.
- sheepmullet 9y ago
  1) High end developers get paid a lot. Even in India and Russia. 2) As a rule of thumb consulting companies charge out at 3x wages. It usually is more expensive to outsource to the top end than it is to do it in house even in Seattle or SF.
  - richmarr 9y ago
    > 1) High end developers get paid a lot. Even in India and Russia. > 2) As a rule of thumb consulting companies charge out at 3x wages. This is backwards. 1) Consulting companies charge what they can get, which depends on what markets they've managed to penetrate, reputation, contract flow, etc as some markets are far better lubricated than others. 2) High end developers get paid a function of company budget and supply of talent, so in locations where budgets are more constrained, salaries will also be constrained. Your implication that "paid a lot" is a constant or near-constant is questionable. There are lots of different datasets on this, no doubt none of them high enough quality, but they all indicate huge discrepancies, both on average and when stratified. https://www.daxx.com/article/it-salaries-software-developer-trends-2016-2017 https://www.daxx.com/article/it-salaries-software-developer-... Is it possible to make a 100:20 saving as the parent comment questioned? I don't know. Perhaps not. On the other hand US average programmer salary is over 4x the average programmer salary in China, so under the right circumstances it's not as ludicrous as perhaps presented. I guess my point is that your premise that "high-end" developer salaries are near-constant around the globe is likely only true if you constrain yourseld to developers who are employed at agencies that compete globally against companies like Thoughtworks and have employed there long enough to have established seniority (remember experience is not synonymous with quality). That's quite a tight definition of "high end" in my opinion.
    - sheepmullet 9y ago
      > That's quite a tight definition of "high end" in my opinion. High end always has to be in context. The current context is wage competition against US developers. The open source dev working for free isn't in this market even if they are the best developer in the world. My friends in India working for Microsoft and the ones working remote for $30/hr are in the same market. > Consulting companies charge what they can get 3x is a rule of thumb. Charge much less than 3x and you aren't making money unless you have a much lower than average cost structure. > On the other hand US average programmer salary is over 4x the average programmer salary in China, so under the right circumstances it's not as ludicrous as perhaps presented. You are comparing apples and oranges. Remember average in the US is average after a couple of decades of outsourcing.
tyingq 9y ago
Thoughtworks isn't cheap though. They sell the idea that outsourcing your work to them is outsourcing to an elite team. They do have teams in Brazil, China, etc, that are cheaper than their US based devs. But, those teams have rates much higher to end clients than a typical outsourcing shop. That's what has me curious here. A PE firm usually buys when they think they see cost cutting opportunity. That may be hard to do with TW, since they pitch and price themselves as "premium".
- lonelydreamer 9y ago
  What is your opinion about the "premium" label?
  - tyingq 9y ago
    I have met plenty of very skilled Thoughtworkers. However the consulting model doesn't reward doing things right. It rewards things like selling the "A team", then swapping them out as you sell the next big client. And shortcuts that enable payment milestones, etc. They have zero incentive for what code does, how maintainable it is, etc, after they leave. TW can deliver well, but you have to manage them closely.
    - Firegarden 9y ago
      From my experience in the last year-and-a-half I would say that the Consulting model is changing to one where the developer team is an outsourced arm from the business yet it's an invaluable part of the business. For example there's a company called clear measure who I believe are looking at driving the bottom line and creating a long-term relationship where growth in the client results in higher profits for the Consulting company through either raising their rates or some other agreement. I know personally as an independent contractor my Approach is to look at how I can affect driving business growth and not so much understanding what the client is asking for as a programming task
      - toyg 9y ago
UK-AL 9y ago
The Thoughtworks brand is based on being high end. I doubt they're going to turn it into a cheap outsourcing thing. There's lots of companies you could buy for that.
- lonelydreamer 9y ago
  You've said correctly, the Brand is...

richmarr 9y ago

> I think there's a fundamental flaw in the idea that you can just pay for cheaper labor- as Steve Jobs has said before the difference in a good programmer and an outstanding programmer can be 50 to 1 or 100 to 1 you can't capture that by trying to cut your cost from $100 an hour to $20 an hour. Perhaps you left something out, but the argument that high quality programmers have to be expensive might be interpreted as assuming that high quality programmers only exist within high-salary countries like the USA. I assume you didn't mean it that way.

sheepmullet 9y ago
1) High end developers get paid a lot. Even in India and Russia. 2) As a rule of thumb consulting companies charge out at 3x wages. It usually is more expensive to outsource to the top end than it is to do it in house even in Seattle or SF.
- richmarr 9y ago
  > 1) High end developers get paid a lot. Even in India and Russia. > 2) As a rule of thumb consulting companies charge out at 3x wages. This is backwards. 1) Consulting companies charge what they can get, which depends on what markets they've managed to penetrate, reputation, contract flow, etc as some markets are far better lubricated than others. 2) High end developers get paid a function of company budget and supply of talent, so in locations where budgets are more constrained, salaries will also be constrained. Your implication that "paid a lot" is a constant or near-constant is questionable. There are lots of different datasets on this, no doubt none of them high enough quality, but they all indicate huge discrepancies, both on average and when stratified. https://www.daxx.com/article/it-salaries-software-developer-trends-2016-2017 https://www.daxx.com/article/it-salaries-software-developer-... Is it possible to make a 100:20 saving as the parent comment questioned? I don't know. Perhaps not. On the other hand US average programmer salary is over 4x the average programmer salary in China, so under the right circumstances it's not as ludicrous as perhaps presented. I guess my point is that your premise that "high-end" developer salaries are near-constant around the globe is likely only true if you constrain yourseld to developers who are employed at agencies that compete globally against companies like Thoughtworks and have employed there long enough to have established seniority (remember experience is not synonymous with quality). That's quite a tight definition of "high end" in my opinion.
  - sheepmullet 9y ago
    > That's quite a tight definition of "high end" in my opinion. High end always has to be in context. The current context is wage competition against US developers. The open source dev working for free isn't in this market even if they are the best developer in the world. My friends in India working for Microsoft and the ones working remote for $30/hr are in the same market. > Consulting companies charge what they can get 3x is a rule of thumb. Charge much less than 3x and you aren't making money unless you have a much lower than average cost structure. > On the other hand US average programmer salary is over 4x the average programmer salary in China, so under the right circumstances it's not as ludicrous as perhaps presented. You are comparing apples and oranges. Remember average in the US is average after a couple of decades of outsourcing.

tyingq 9y ago

Thoughtworks isn't cheap though. They sell the idea that outsourcing your work to them is outsourcing to an elite team. They do have teams in Brazil, China, etc, that are cheaper than their US based devs. But, those teams have rates much higher to end clients than a typical outsourcing shop. That's what has me curious here. A PE firm usually buys when they think they see cost cutting opportunity. That may be hard to do with TW, since they pitch and price themselves as "premium".

lonelydreamer 9y ago
What is your opinion about the "premium" label?
- tyingq 9y ago
  I have met plenty of very skilled Thoughtworkers. However the consulting model doesn't reward doing things right. It rewards things like selling the "A team", then swapping them out as you sell the next big client. And shortcuts that enable payment milestones, etc. They have zero incentive for what code does, how maintainable it is, etc, after they leave. TW can deliver well, but you have to manage them closely.
  - Firegarden 9y ago
    From my experience in the last year-and-a-half I would say that the Consulting model is changing to one where the developer team is an outsourced arm from the business yet it's an invaluable part of the business. For example there's a company called clear measure who I believe are looking at driving the bottom line and creating a long-term relationship where growth in the client results in higher profits for the Consulting company through either raising their rates or some other agreement. I know personally as an independent contractor my Approach is to look at how I can affect driving business growth and not so much understanding what the client is asking for as a programming task
    - toyg 9y ago

UK-AL 9y ago

The Thoughtworks brand is based on being high end. I doubt they're going to turn it into a cheap outsourcing thing. There's lots of companies you could buy for that.

lonelydreamer 9y ago
You've said correctly, the Brand is...