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To: fedhead who wrote (158835)	7/28/2003 7:55:12 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 164684

well I am not sure if Russia has the issues I am referring to or not. My issues have to do with silicon valley and whether you can offshore a silicon valley company and expect it to prosper. Note that I feel the same way about sending a valley company's workforce to ohio or some other midwest state to "save costs". Something gets lost, the few exceptions that have built great companies away from the West Coast (Dell) actually imported local people for awhile until they got off the ground. Companies that tried to start somewhere other than a tech center like SV (I consider Seattle to also be a tech/innovation center)- like Compaq for example were killed, this is within the US, the offshoring situation is just another level of indirection. The reason companies elsewhere have difficulty I attribute to the culture of flat/matrix mgmt and stock options so it will be interesting to see if SV remains unbeatable when they take those away. But anyway the sense that one midlevel individual can make a business observation about the industry, take the initiative and build something, without being told how to do it or even whether it is a good idea or not by mgmt, this is something that SV companies thrive on but other businesses US and worldwide do not. A sort of egalitarian atmosphere which allows for creativity since most great ideas come from people working "in the field" so to speak and not some CEO in a boardroom or even a CTO. Anyway to make the Dell supply chain work there was all kinds of effort like this going on and this cannot be achieved with offshoring or outsourcing. You can do maintenance of course, and operational tasks like system administration. I am all for offshoring that. But R&D offshoring is a very very bad idea and there is one software company who does most of this (Oracle) and surprise- their products are full of bugs. My personal view is that the issue with oracle is that the indians don't have any real world exposure to know that some business scenario is likely to exist, they don't think to test it and then in the marketplace it falls apart. Anyway I will wait to see how this pans out because I learned in the last recession (early 90s) that all kinds of things are done to cut costs in an economic retraction and the minute growth returns, timing becomes of the essence again and all the cost cutting goes out the window. Since I am of the belief that demand will return in a big way to many high tech comapanies I can't be sure offshoring will be so relentless as it is now, except in special cases like the software business where the companies involved have screwed up so badly that demand probably won't return.