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Politics : Stockman Scott's Political Debate Porch

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To: Bill who wrote (28607)	9/23/2003 2:10:00 PM
From: Lizzie Tudor	Read Replies (1) of 89467

the point is that some companies, especially oracle and a lot of software came to the conclusion in the late 90s that they could get labor from india for cheap. Companies like oracle then started transitioning their R&D as well as much of their support to india, and Larry crowed about how great this was. Something happened that I don't think he was expecting and that was that many of the largest IT shops chose to make the same move, Sprint and GM etc. Since Oracle had already set up huge R&D facilities over there, the consulting firms like Satyam had large labor pools who knew Oracle already. So Sprint and GM etc. moved their entire Oracle shop to Satyam, in some cases offshoring/outsourcing the whole thing. Now the question is, who and how does oracle sell their product to GM, given that GM has outsourced a whole bunch of the development portion to Satyam? Larry's salesforce is US only. Oracle used to sell "seat licenses" for every developer or business user of the apps. How much is a seat license worth in india anyway, these people make 10K/year. Besides there is no way to police anything over there, it is an IP free for all. Oracle has to revert back the the less economically viable "site license" for each large shop but there is a lot less money in that. The other issue with offshore IT is all of the productivity suites that Oracle sells, and Oracle system maintenance stuff. Productivity software is a lot less relevant when your workforce is essentially free so no market for that. As far as system management software, that market is now the offshore shops themselves like Satyam. I doubt they have the same loyalty to a US based company that we have here. If you notice the chip business and broadband are doing fairly well here. Thats because there is a large international hiring boom. Every one of the 200 new indian employees that AMAT hires get a new wintel PC. So offshoring has helped some companies like intel and cisco, it has expanded their market. But enterprise software is something that exists only in IT, and that market is shifting. Ordinarily you'd do what you could to protect a profitable US industry and keep it here but in this case the largest company Oracle did it to themselves.

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