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You're getting a little defensive here. IBM was one of the crown jewels of American industry. It was an iconic company in its time. The fact that it now employs

You're getting a little defensive here. IBM was one of the crown jewels of American industry. It was an iconic company in its time. The fact that it now employs more people in India than the US is something to ponder. It isn't so much about the merits of outsourcing. Everything can be done cheaper by getting it done in another part of the world. Should it be? Sometimes the answer is yes, at other times, not. Imagine for a second that 50 years from today (when say India is in a place where the US is today), many Indian jobs are outsourced to another country. Same thing.

794CD01 9y ago
That was merely an accident of history. The I in IBM doesn't stand for American.
- adventured 9y ago
  It wasn't merely an accident. The US had a superior context which enabled something like IBM to exist and thrive. Name another country circa 1911 that could have produced IBM and enabled it to acquire such vast global scale at its peak. There are only a handful of nations that can even be considered as possible. IBM came out of the US for the exact same reason Fairchild, Intel, Cisco, Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple, Qualcomm, etc. all did.
  - BeetleB 9y ago
    >IBM came out of the US for the exact same reason Fairchild, Intel, Cisco, Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple, Qualcomm, etc. all did. By that reasoning, IBM is outsourcing from the US for exactly the same reason virtually all the other companies you listed are. Sure, something about the US helped them to exist and thrive. And something about the US is helping them to outsource. The argument cuts both ways.
    - adventured 9y ago
      > By that reasoning, IBM is outsourcing from the US for exactly the same reason virtually all the other companies you listed are. Of course. Most of the outsourcing has been about labor costs. The US has among the highest labor costs on the the planet, the nations (Vietnam, China, India, Mexico, etc) that the US has heavily outsourced to - whether manufacturing or IT - are or were far lower net cost nations to do those outsourced things in. What's cutting against the US is mostly obvious: incomes are very high, infrastructure costs are far too high (impacts almost everything in the cost structure in the US, from transportation to manufacturing), the effective corporate income tax rate in the US is among the highest (while many developed nations are aggressively lowering their rates), vast & rapid growth in economic regulations over the last 30-40 years, large expansion of general burden on business formation over that time (taxes, regulation, red tape, abusive zoning laws, etc.; leading to far lower dynamism in the US economy, weak productivity growth, perpetually falling new business formation, etc).
      - azinman2 9y ago
        And yet it’s still the top economy. I don’t buy this narrative — if regulations and taxes were such a problem, the US would have never climbed to the position it’s at.
- alexasmyths 9y ago
  "That was merely an accident of history. " It was no accident.
- vram22 9y ago
  The I in IBM stands for International (Business Machines) - from 1924, according to Wikipedia. https://en.wikipedia.org/wiki/IBM https://en.wikipedia.org/wiki/IBM
pjmlp 9y ago
They are already being outsourced to cheaper countries. Check for example CyberCity in Port Louis, Mauritius. Quite a few Indian helpdesk centers have moved there.
- viral007 9y ago
  Also look at Philippines, Vietnam, etc...
lotsofpulp 9y ago
Assuming the relocation of work is only due to arbitrage in wages and not bypassing environmental or human rights causes, then how is it decided what can be arbitraged, and who gets to decide this? Are people allowed to go to Walmart and choose to buy something for less money than the mom and pop store? Are traders allowed to take advantage of pricing differentials in different markets? Are employers allowed to relocated outside of San Francisco to find less expensive employees? You can try to stop the market from reaching equilibrium...but I have a feeling you won't win in the end, at least not without some help from the armed forces.
vram22 9y ago
I'm not fully arguing against your point, but would just like to make one observation: IBM has been laying off people in the US (and maybe elsewhere too) for several years, every now and then. I have been in the software field for many years now, and have been reading the industry news for a long time, that's how I know it. I remember even way back, I used to read the news in Indian and foreign IT magazines, every now and then, that IBM (and other US companies too) were laying off like 10K, 20K, or more workers at a time. And it was not always because of outsourcing jobs to India, in many earlier cases it was before outsourcing even started.
- thisisit 9y ago
  IBM laid off 5k workers in India this year: http://profit.ndtv.com/news/tech-media-telecom/article-ibm-india-denies-report-of-5-000-possible-layoffs-in-coming-months-1694397 http://profit.ndtv.com/news/tech-media-telecom/article-ibm-i...
  - vram22 9y ago
    Could be. I check that sort of news less these days - jaded. But it sort of reinforces my point that companies do layoffs. Sure, some Indian companies have started doing it too, whatever the pros and cons may be. Founders and CEOs in the US like the ability to hire and fire, and the idea of employment at will. Some employees, less so. India has historically been a country where paternalistic management practices were common, and firing was seen as something to be avoided as far as possible, considered as a big deal, the news and impact of it to be minimized or played down (I know this last point is so to some extent in the US too), and as a huge social stigma (for the person being fired or laid off). That has been changing some recently, due to Western influences. There can be both pros and cons to the matter. Don't have a final viewpoint on it. Edited to change "been a company" to "been a country". Edit: Quoting myself: >India has historically been a country where paternalistic management practices were common, and firing was seen as something to be avoided as far as possible This is also the case in government service - as in, in India, for long, and maybe even nowadays, it was almost impossible to fire a government employee, whatever the reason. Job security (along with poverty) was a huge reason why, in earlier years, many, or even the majority of people preferred government jobs - because even though the pay, environment, perks were all mostly shitty - though getting cheap owned or rented housing was seen as a good perk by many - again, a house was seen as a major asset to strive for - you could not be easily fired from your job. In a country with devastating annual floods / droughts (both still the case) / somewhat frequent famines, poverty, etc., those were factors to be considered. I remember even a classmate of mine (this was many years later than the start of the period I am talking about - the start was at Indian Independence or even years before), exulting to a few of us friends that "I 'got' DOTE!" (where DOTE == Department Of Technical Education", meaning that he got a "seat" in a government engineering college, meaning that if he did his stuff even just adequately, a secure lifelong government job was guaranteed - as witnessed by his answer when someone asked him why he went for it - his answer in one word was - "security" (of livelihood, of course, not computer security).
PopsiclePete 9y ago
What you're seeing isn't IBM being unethical, but more like nation-states being outdated concepts. The IT industry is the first truly global industry. I can do my job from a coffee shop in NYC, a mountain monastery in Tibet, or a beach in Cancun. I just need my trusty laptop and WiFi access. And yet, even though I'm the same person, doing the same work, I get taxed differently, I pay different prices for the same goods, and the cost of living is vastly different. Why should I be "allowed" to do work for IBM from the NYC coffee-shop but not the from Cancun beach? Would the product of my brain's labor be vastly different? Does me hopping on a plane and committing code from a different longitude and latitude make me a less-deserving person? And yes, Indian jobs should get outsourced to another country - if it makes sense. Why not? Why do we have "protected" classes of people? And who gets to decide who's protected? Software is truly unique like that - you can collaborate with people you've never seen face-to-face, different perspectives, different cultures, but all working towards a common goal. I'm not aware of any other industry you can do that. And you expect IBM to just sit there quietly, while told, "Hire Jim, not Srinivas, because although Srinivas can do the exact same work for 1/10th the cost, Jim, being American, is a more important human being, your competitive advantage be damned" ?

794CD01 9y ago

That was merely an accident of history. The I in IBM doesn't stand for American.

adventured 9y ago
It wasn't merely an accident. The US had a superior context which enabled something like IBM to exist and thrive. Name another country circa 1911 that could have produced IBM and enabled it to acquire such vast global scale at its peak. There are only a handful of nations that can even be considered as possible. IBM came out of the US for the exact same reason Fairchild, Intel, Cisco, Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple, Qualcomm, etc. all did.
- BeetleB 9y ago
  >IBM came out of the US for the exact same reason Fairchild, Intel, Cisco, Silicon Graphics, Motorola, Texas Instruments, HP, Sun, Xerox, AMD, Apple, Qualcomm, etc. all did. By that reasoning, IBM is outsourcing from the US for exactly the same reason virtually all the other companies you listed are. Sure, something about the US helped them to exist and thrive. And something about the US is helping them to outsource. The argument cuts both ways.
  - adventured 9y ago
    > By that reasoning, IBM is outsourcing from the US for exactly the same reason virtually all the other companies you listed are. Of course. Most of the outsourcing has been about labor costs. The US has among the highest labor costs on the the planet, the nations (Vietnam, China, India, Mexico, etc) that the US has heavily outsourced to - whether manufacturing or IT - are or were far lower net cost nations to do those outsourced things in. What's cutting against the US is mostly obvious: incomes are very high, infrastructure costs are far too high (impacts almost everything in the cost structure in the US, from transportation to manufacturing), the effective corporate income tax rate in the US is among the highest (while many developed nations are aggressively lowering their rates), vast & rapid growth in economic regulations over the last 30-40 years, large expansion of general burden on business formation over that time (taxes, regulation, red tape, abusive zoning laws, etc.; leading to far lower dynamism in the US economy, weak productivity growth, perpetually falling new business formation, etc).
    - azinman2 9y ago
      And yet it’s still the top economy. I don’t buy this narrative — if regulations and taxes were such a problem, the US would have never climbed to the position it’s at.
alexasmyths 9y ago
"That was merely an accident of history. " It was no accident.
vram22 9y ago
The I in IBM stands for International (Business Machines) - from 1924, according to Wikipedia. https://en.wikipedia.org/wiki/IBM https://en.wikipedia.org/wiki/IBM

pjmlp 9y ago

They are already being outsourced to cheaper countries. Check for example CyberCity in Port Louis, Mauritius. Quite a few Indian helpdesk centers have moved there.

viral007 9y ago
Also look at Philippines, Vietnam, etc...

lotsofpulp 9y ago

Assuming the relocation of work is only due to arbitrage in wages and not bypassing environmental or human rights causes, then how is it decided what can be arbitraged, and who gets to decide this? Are people allowed to go to Walmart and choose to buy something for less money than the mom and pop store? Are traders allowed to take advantage of pricing differentials in different markets? Are employers allowed to relocated outside of San Francisco to find less expensive employees? You can try to stop the market from reaching equilibrium...but I have a feeling you won't win in the end, at least not without some help from the armed forces.

vram22 9y ago

I'm not fully arguing against your point, but would just like to make one observation: IBM has been laying off people in the US (and maybe elsewhere too) for several years, every now and then. I have been in the software field for many years now, and have been reading the industry news for a long time, that's how I know it. I remember even way back, I used to read the news in Indian and foreign IT magazines, every now and then, that IBM (and other US companies too) were laying off like 10K, 20K, or more workers at a time. And it was not always because of outsourcing jobs to India, in many earlier cases it was before outsourcing even started.

thisisit 9y ago
IBM laid off 5k workers in India this year: http://profit.ndtv.com/news/tech-media-telecom/article-ibm-india-denies-report-of-5-000-possible-layoffs-in-coming-months-1694397 http://profit.ndtv.com/news/tech-media-telecom/article-ibm-i...
- vram22 9y ago
  Could be. I check that sort of news less these days - jaded. But it sort of reinforces my point that companies do layoffs. Sure, some Indian companies have started doing it too, whatever the pros and cons may be. Founders and CEOs in the US like the ability to hire and fire, and the idea of employment at will. Some employees, less so. India has historically been a country where paternalistic management practices were common, and firing was seen as something to be avoided as far as possible, considered as a big deal, the news and impact of it to be minimized or played down (I know this last point is so to some extent in the US too), and as a huge social stigma (for the person being fired or laid off). That has been changing some recently, due to Western influences. There can be both pros and cons to the matter. Don't have a final viewpoint on it. Edited to change "been a company" to "been a country". Edit: Quoting myself: >India has historically been a country where paternalistic management practices were common, and firing was seen as something to be avoided as far as possible This is also the case in government service - as in, in India, for long, and maybe even nowadays, it was almost impossible to fire a government employee, whatever the reason. Job security (along with poverty) was a huge reason why, in earlier years, many, or even the majority of people preferred government jobs - because even though the pay, environment, perks were all mostly shitty - though getting cheap owned or rented housing was seen as a good perk by many - again, a house was seen as a major asset to strive for - you could not be easily fired from your job. In a country with devastating annual floods / droughts (both still the case) / somewhat frequent famines, poverty, etc., those were factors to be considered. I remember even a classmate of mine (this was many years later than the start of the period I am talking about - the start was at Indian Independence or even years before), exulting to a few of us friends that "I 'got' DOTE!" (where DOTE == Department Of Technical Education", meaning that he got a "seat" in a government engineering college, meaning that if he did his stuff even just adequately, a secure lifelong government job was guaranteed - as witnessed by his answer when someone asked him why he went for it - his answer in one word was - "security" (of livelihood, of course, not computer security).

PopsiclePete 9y ago

What you're seeing isn't IBM being unethical, but more like nation-states being outdated concepts. The IT industry is the first truly global industry. I can do my job from a coffee shop in NYC, a mountain monastery in Tibet, or a beach in Cancun. I just need my trusty laptop and WiFi access. And yet, even though I'm the same person, doing the same work, I get taxed differently, I pay different prices for the same goods, and the cost of living is vastly different. Why should I be "allowed" to do work for IBM from the NYC coffee-shop but not the from Cancun beach? Would the product of my brain's labor be vastly different? Does me hopping on a plane and committing code from a different longitude and latitude make me a less-deserving person? And yes, Indian jobs should get outsourced to another country - if it makes sense. Why not? Why do we have "protected" classes of people? And who gets to decide who's protected? Software is truly unique like that - you can collaborate with people you've never seen face-to-face, different perspectives, different cultures, but all working towards a common goal. I'm not aware of any other industry you can do that. And you expect IBM to just sit there quietly, while told, "Hire Jim, not Srinivas, because although Srinivas can do the exact same work for 1/10th the cost, Jim, being American, is a more important human being, your competitive advantage be damned" ?