8 ms·

It's outsourcing company there is a decent number of them. Many from small Eastern European countries like EPAM Systems from Belarus (Stock: EPAM) Mkt Cap 22.55

by qaq 6y ago

It's outsourcing company there is a decent number of them. Many from small Eastern European countries like EPAM Systems from Belarus (Stock: EPAM) Mkt Cap 22.55B. They tend to have HQs in US fo obvious reasons though. Surprised there is not much invest in this space as you can grow one pretty rapidly to a fairly large size.

55555 6y ago
Wow, impressive. Probably not much interest because they trade at a low multiple, but that's quite the company. In my experience the quality of the experience you get when working with a software consultancy/dev shop is inversely correlated to the size of the firm. But I guess it works for others.
- azinman2 6y ago
  They probably have enough processes in place and enough longevity to be able to get government contracts, big corp contracts, etc.
- tstrimple 6y ago
  I've seen the same pattern as well. Growing dev teams quickly without quality drops is difficult. At some point, if you're successful enough in that space, your need to bring in more bodies outpaces your ability to ensure you've got good staff and processes.
  - varjag 6y ago
    EPAM is there for soon three decades, I dunno about "quickly".
    - qaq 6y ago
      There is a good bunch of companies that got to Billion plus land much quicker than a decade. It is very feasible to do it in 5. You have to realize that most of them were bootstrapped and to grow you need enough resources to have a decent sales office/HQ in US which is out of reach for a long time unless you start with a very solid financial backing.
      - varjag 6y ago
        If you read my reply in the context I wasn't saying it in a negative way.
  - imtringued 6y ago
    If you don't have qualified staff then that should be part of your business model and you should be honest about it to your customers. Of course what happens is that managers ride on the reputation for some short term money.
- qaq 6y ago
  It's way lower risk and if you can grow 50M into billions thats pretty much Unicorn level returns
  - 55555 6y ago
    Is this a business you are interested in starting? How can I contact you privately?
    - qaq 6y ago
      I can hit you up at your profile's gmail if it is up to date
- dopidopHN 6y ago
  I work with them on a regular basis. You are correct, talented folks. But they get the short end of the stick when it come to who does what. Moral is not super high.
jan_Inkepa 6y ago
I like that they chose the name "Effective Programming for America".
AlotOfReading 6y ago
Isn't EPAM a consulting company? I didn't think they designed their own products to outsource.
- Yizahi 6y ago
  This distinction (and naming) is really not strict today, especially when total corp headcount exceeds a few thousands. One project may be pure software consultancy, another may be a a complex solution, yet another can be a hardware project inside the big corp (so if it was a separate entity it would be called a product company or startup). People can be outsourced or outstaffed or anything in between. Basically in a case of 10k outsourcing corp it is pointless to think about it as a single entity, it's a collection of projects each managed differently, with different expertise and different share of in-house development, from original products to dumb legacy support.
ridethebike 6y ago
Disclaimer: former EPAM employee (early 2010-s). Such big* consulting/outsourcing companies in Eastern Europe(epam, globallogic and the like) have competent engineers. I can see it especially clearly after moving to the US and having to interview engineers from other big consultancies. *big - everything with several k employees is considered big in Eastern Europe.
- wil421 6y ago
  The Big 4 consultancies hire college grads give them basic training on the big cloud platforms and then fill up projects. Otherwise they hire cheap engineers from Eastern Europe or India. They are not looking for experienced engineers. At least in the Technology Advisory space.
  - MangoCoffee 6y ago
    >The Big 4 consultancies hire college grads give them basic training on the big cloud platforms and then fill up projects. that's correct. i went thur that with Avanade. they teach us some basic about the security system that they implemented for their client and client ask for tech support and guess who they send.
  - raincom 6y ago
    That's how these offshoring consulting companies make money: for every 7 fresh undergrads, there is one senior person. They pay $3500 per annum for these cheaper resources; the senior resource gets paid about $16000 per annum. Profits for these consulting companies come from these $300 per month resources.
    - texasbigdata 6y ago
      $300 per month for an undergraduate? Genuinely seems a bit low
      - imtringued 6y ago
        There are countries in Africa that pay more than that for unskilled manual labor. Even the cheapest software developer should be able to get $1k before tax per month. Of course I am assuming that these people actually became software developers, if those 7 juniors are merely trainees who haven't written a single line of code in their life then that salary may be justified.
redisman 6y ago
Same reason that WeWork was magically worth 100x equivalent real estate companies because Adam Neumann was so cool and quirky.
- redis_mlc 6y ago
  I talked to some non-real esate people about We. They couldn't separate the fact that WeWork offices seemed like a good idea overall from also being a financial dud.
reader_mode 6y ago
> Surprised there is not much invest in this space There is - huge spike in demand for talent locally in the last 5-10 years as this business model started becoming popular. Also seeing smaller agencies being acquired by larger ones in some decently sized acquisitions recently. Initially the local IT sector was undeveloped, there were quite a few good engineers working in really poor condition, the only decent option was relocating to Western Europe. So there were experienced developers available for cheap, and, compared to India, Central/Eastern Europe is closer to US (some overlap in work hours), usually a much nicer destination to travel to for offshore offices (depending on the country, Croatia for example is a really nice tourist destination, good English level and the culture should be more familiar). So initially that higher quality talent got absorbed at below market rates (especially for US standards) and there were quite a few success stories and reputation builders. But now as this model expands competition is driving up the price locally as well - there just isn't enough people to outsource - they are starting to scrape bottom of the barrel talent, asses-in-seats, straight out of college Indian code farm model with all the problems that had. Also portals like toptal made it easier to skip these agencies and work directly for clients so now the agencies have to compete with that for talent. I think the peak for this agency model is behind us and I think the quality has started to drop (there were a few smaller agencies that built their reputation like I described above and had great success, they used availability of local talent to built respectable teams and getting hired there was a resume highlight, sort of like getting hired at FAANG on a local level. Nowadays they are hiring people they would screen out after an initial call and it's selling asses in seats, cashing in on built reputation)

by qaq 6y ago

55555 6y ago

Wow, impressive. Probably not much interest because they trade at a low multiple, but that's quite the company. In my experience the quality of the experience you get when working with a software consultancy/dev shop is inversely correlated to the size of the firm. But I guess it works for others.

azinman2 6y ago
They probably have enough processes in place and enough longevity to be able to get government contracts, big corp contracts, etc.
tstrimple 6y ago
I've seen the same pattern as well. Growing dev teams quickly without quality drops is difficult. At some point, if you're successful enough in that space, your need to bring in more bodies outpaces your ability to ensure you've got good staff and processes.
- varjag 6y ago
  EPAM is there for soon three decades, I dunno about "quickly".
  - qaq 6y ago
    There is a good bunch of companies that got to Billion plus land much quicker than a decade. It is very feasible to do it in 5. You have to realize that most of them were bootstrapped and to grow you need enough resources to have a decent sales office/HQ in US which is out of reach for a long time unless you start with a very solid financial backing.
    - varjag 6y ago
      If you read my reply in the context I wasn't saying it in a negative way.
- imtringued 6y ago
  If you don't have qualified staff then that should be part of your business model and you should be honest about it to your customers. Of course what happens is that managers ride on the reputation for some short term money.
qaq 6y ago
It's way lower risk and if you can grow 50M into billions thats pretty much Unicorn level returns
- 55555 6y ago
  Is this a business you are interested in starting? How can I contact you privately?
  - qaq 6y ago
    I can hit you up at your profile's gmail if it is up to date
dopidopHN 6y ago
I work with them on a regular basis. You are correct, talented folks. But they get the short end of the stick when it come to who does what. Moral is not super high.

jan_Inkepa 6y ago

I like that they chose the name "Effective Programming for America".

AlotOfReading 6y ago

Isn't EPAM a consulting company? I didn't think they designed their own products to outsource.

Yizahi 6y ago
This distinction (and naming) is really not strict today, especially when total corp headcount exceeds a few thousands. One project may be pure software consultancy, another may be a a complex solution, yet another can be a hardware project inside the big corp (so if it was a separate entity it would be called a product company or startup). People can be outsourced or outstaffed or anything in between. Basically in a case of 10k outsourcing corp it is pointless to think about it as a single entity, it's a collection of projects each managed differently, with different expertise and different share of in-house development, from original products to dumb legacy support.

ridethebike 6y ago

Disclaimer: former EPAM employee (early 2010-s). Such big* consulting/outsourcing companies in Eastern Europe(epam, globallogic and the like) have competent engineers. I can see it especially clearly after moving to the US and having to interview engineers from other big consultancies. *big - everything with several k employees is considered big in Eastern Europe.

wil421 6y ago
The Big 4 consultancies hire college grads give them basic training on the big cloud platforms and then fill up projects. Otherwise they hire cheap engineers from Eastern Europe or India. They are not looking for experienced engineers. At least in the Technology Advisory space.
- MangoCoffee 6y ago
  >The Big 4 consultancies hire college grads give them basic training on the big cloud platforms and then fill up projects. that's correct. i went thur that with Avanade. they teach us some basic about the security system that they implemented for their client and client ask for tech support and guess who they send.
- raincom 6y ago
  That's how these offshoring consulting companies make money: for every 7 fresh undergrads, there is one senior person. They pay $3500 per annum for these cheaper resources; the senior resource gets paid about $16000 per annum. Profits for these consulting companies come from these $300 per month resources.
  - texasbigdata 6y ago
    $300 per month for an undergraduate? Genuinely seems a bit low
    - imtringued 6y ago
      There are countries in Africa that pay more than that for unskilled manual labor. Even the cheapest software developer should be able to get $1k before tax per month. Of course I am assuming that these people actually became software developers, if those 7 juniors are merely trainees who haven't written a single line of code in their life then that salary may be justified.

redisman 6y ago

Same reason that WeWork was magically worth 100x equivalent real estate companies because Adam Neumann was so cool and quirky.

redis_mlc 6y ago
I talked to some non-real esate people about We. They couldn't separate the fact that WeWork offices seemed like a good idea overall from also being a financial dud.

reader_mode 6y ago

> Surprised there is not much invest in this space There is - huge spike in demand for talent locally in the last 5-10 years as this business model started becoming popular. Also seeing smaller agencies being acquired by larger ones in some decently sized acquisitions recently. Initially the local IT sector was undeveloped, there were quite a few good engineers working in really poor condition, the only decent option was relocating to Western Europe. So there were experienced developers available for cheap, and, compared to India, Central/Eastern Europe is closer to US (some overlap in work hours), usually a much nicer destination to travel to for offshore offices (depending on the country, Croatia for example is a really nice tourist destination, good English level and the culture should be more familiar). So initially that higher quality talent got absorbed at below market rates (especially for US standards) and there were quite a few success stories and reputation builders. But now as this model expands competition is driving up the price locally as well - there just isn't enough people to outsource - they are starting to scrape bottom of the barrel talent, asses-in-seats, straight out of college Indian code farm model with all the problems that had. Also portals like toptal made it easier to skip these agencies and work directly for clients so now the agencies have to compete with that for talent. I think the peak for this agency model is behind us and I think the quality has started to drop (there were a few smaller agencies that built their reputation like I described above and had great success, they used availability of local talent to built respectable teams and getting hired there was a resume highlight, sort of like getting hired at FAANG on a local level. Nowadays they are hiring people they would screen out after an initial call and it's selling asses in seats, cashing in on built reputation)