The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Jim McMannis who wrote (7511)	12/21/2002 2:05:16 PM
From: Lizzie Tudor	Read Replies (1) of 306849

How much of the computer support (say Dell) is outsourced overseas, like to India etc.? When you call support up on the phone where are you talking to? Romania? Doesn't all this outsourcing reek havoc on taxation systems? No individual income tax, witholding goes to the US government. Just another way that the internet tears down borders. I see tony answered this already... and you are not asking only about Dell- but up until last year Dell hadn't outsourced anything at all. Now this is something of a trick question because Dell does assembly really- the boards etc used in Dell computers come from Asian countries- Dell sends the designs and the boards come back so there is definitely outsourcing along the supply chain which in Dells case is fairly intense. But for everything else- call center, IT/database work other support- everything is in house. In the early 90s when Dell was first starting to ramp there was a perception that you couldn't compete doing all that they did in the US. As time passed the failure rates from the outsourced manufacturers shot up and Dell had it all under control. When Dell has a QA type problem, they stop the line in house and change the design right then- then they move the reengineered stuff to the outlet, that is a superior way to handle "bugs" in a certain line. Anyway imo Dell shows that outsourcing is not always the best way. I believe in the late 80s a lot of heavy manufacturing was outsourced and the pendulum swung too far... we may be getting close to that in technology now but you have to let the market forces do what they will. I'm talking about companies like Applied Materials who have chosen to outsource large parts of their IT dept... purely because they have had problems with this area in the past. You cannot outsource your problems and I'm sure they will come to understand this but for now they think outsourcing is the way to go... ok. One important thing to keep in mind is taking india as an example... the size of the potential market for US technology products is 5x what it is in the US... a billion people with only 1-2% online currently. Same situation in China. It is best to create friendly business partnerships with these countries fairly early on. Now you could say they have no purchasing power which is true but with the decline in technology prices, it won't be long where DVRs are selling in India too.. the difference is we buy many of these and throw them away, there it could be a luxury purchase... ok. Lizzie

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