2002: IT services landscape changes markedly


News: 2002: IT services landscape changes markedly

  1. 2002: IT services landscape changes markedly (29 messages)

    The landscape of the IT services market shifted significantly this year, and the changes sent vendors and clients scrambling to adapt to the new and sometimes rocky terrain. Widely recognized as one of the toughest years for the IT services industry, a new article on on IDG looks at what happened this year and prospects for next year.

    The article doesn't address J2EE landscape directly, but provides a good overview of what some of the major players in our space have been up to and going through.

    Read 2002: IT services landscape changes markedly.

    Threaded Messages (29)

  2. This is news?
  3. Floyd,
    It looks like you were busy writing good EJB book for the past two years and you missed all action on IT market.
    This article only makes sense for people who just come back from the moon after two years of isolation from the mass media. Anyway thanks for the reminder.

    I do not have any hopes on IT recovery any time soon. Especially, than I see job requirements on the dice (www.dice.com) for 10 years experience in Java and EJB follows 2 pages of different abbreviations, but with pay rate $15-25h.

    I think they will be better off to hire some Java guru from local McDonalds for even less money :) Maybe he will be able to make drinkable cup of coffee for the client with his 10 years of tough experience.


    PS: I have 15 years of experience as a computer programmer (from ASM to Java) and never had any troubles to get new contract, but not anymore. Time is changed. IT hiring people lost commonsense.
  4. And with outsourcing overseas increasing, it gets worse. See what HP is doing:

  5. Earlier this month I attended Marc Fleury's talk at the Toronto JUG (I think Floyd had this summarized somewhere on TSS). Anyway, Marc made a number of comments as to how well JBoss is doing, such as hourly rates of $150+/hour (US dollars, not Canadian!), contracts measured in the 100,000s of billable hours, and, even at these rates, TURNING down routine J2EE work.

    I have personally seen how IT has been slowed down, but with some companies doing this well, sometimes it looks like someone has just moved the cheese!

  6. Unfortunately it is not only HP. Here is just short list of Corps that I know for sure have outsourced very large projects to India for the past year:
    - Merrill Lynch is undisputed leader in this area
    - Prudential
    - PW
    - JP Morgan/Chase
    - AIG, outsourced support and part of development
    - Sun and Oracle have been doing it for long time and it is not news
    I think this list could be very long. You can contribute if you wish.

    So, with such clear trend in IT and after 15 years in programming business, I am thinking to turn off my computer forever and move to different field.

    Maybe to learn to make a cup Java coffee at McDonalds or Starbucks is not as crazy as it sounds for experienced Java programmer. It is just a matter of time, then McDonald rates will much Java/EJB rate, but at McDonalds you can get free food and this job cannot be outsourced to oversea and you always will have some “food” on the table. I am not just sure if McDonalds or Starbucks will consider java certification.

  7. And...
    Bank Of America. (They actually own the 'outsourcing' company that employs those living in India)

    We somehow need to get away from being 'bodies' and do 'value added' things.
  8. Hello friends,

    Indeed these are "wonderful" times... I have graduated this year in Computer Science, and prospects are, hmmm, $h|T. I especially love the, (as mentioned by Glen), "23-year-old doctorates with at least 10 years of experience in both project-management and client-facing roles, willing to start at competitive rates ($15 per hour) in a high-energy environment, but with a great chance to hone your skills and advance in the company. Must be willing to work unsociable hours, be on call 24/7, and carry responsibility. If this sounds like a job for you, call 1-800-EAT-JAVA."
    Anyway... I think the epitome of this 'syndrome' is a job advert that was picked out by the British Computer Society magazine, 'Computing', because in 2001, it advertised a job for which part of the qualification was to have "at least 5 years experience with Windows 2000". Enough said.
    But I think that in the end, after a tough learning phase for those companies, they will learn that what's worth having is worth paying for.
    But in the meantime, I'm headed for the nearest Starbucks, and I'm applying for that 'barista' position !
    After all, I've been making coffee for about 15 years now !


  9. For what may be THE definitive study of the situation of programmers in the USA, "Debunking the Myth of a Desperate Programmer Shortage" by Dr. Norman Matloff. Initially published when "things were great", this paper was presented to Congress and is continually updated. Download the PDF from (middle of page)at http://heather.cs.ucdavis.edu/itaa.html

    Read it if you dare . . .

    Best to all - GH
  10. Boo Hoooo![ Go to top ]

    So let me get this straight : United States Of America should give up its market driven ecomonic policies that have helped us dominate the world just because some some of you losers have difficulty finding a job ? While we are at it, should we also voluntarily opt for socialism -- you know that would further guarantee your job security ?

    We ship some jobs to India, Russia etc. or even import their cheap labor here because it increases our efficiency and competitiveness. Maybe we lose a bunch of low paying IT jobs to India but they in turn buy a fleet of jets or industrial equipments from us.

    Want job security -- move to Cuba !!
  11. Useless article[ Go to top ]

  12. Oursourcing[ Go to top ]

    Datamation has a series of articles this month on outsourcing.

    See: http://itmanagement.earthweb.com/
      1. How to Choose An Offshore Software Vendor
      2. 5 Top Trends in Offshore Outsourcing

    I always pooh-pooh-ed the idea of outsourcing - it'll never affect me, I'm too smart, too experienced. But the point was driven home, when my last task at my last contract was to develop a job description for a j2ee applet that was to be outsourced to the subcontinent. When I mentioned I could do it quicker and cheaper, the response was that the company (big mututal fund firm) was moving over to outsourcing as a strategic move.
  13. Boo Hoooo![ Go to top ]

    Dear Damien:

    Please allow me to express my thoughts on your letter.

    So let me get this straight : United States Of America should give up its market driven ecomonic policies that have helped us dominate the world just because some some of you losers have difficulty finding a job ? While we are at it, should we also <snap>

    Who cares about what the United States do or don't do ? People who learn their history from Spielberg movies shouldn't tell people in the civilized world how to lead their lives.

    should we also voluntarily opt for socialism

    When more than 90% of the American adults can corretly spell 'Socialism', maybe there could be a poll ?

    <snip>We ship some jobs to India, Russia, etc.<snap>

    Good for those Americans who know where to find those places on the map ! According to a National Geographic survey (http://geosurvey.nationalgeographic.com/geosurvey/highlights.html), only 46% of Americans betwen the ages of 18 and 24 were able to find India. But then again, 11% weren't able to find the USA on a map...
    I suppose those Americans couldn't ship jobs to anywhere but their own state.

    <snip>Maybe we lose<snap>

    Now you're talking !

    <snip>but they in turn buy a fleet of jets or industrial equipments from us.<snap>

    Don't forget weapons - for peace, of course.

    <snip>Want job security -- move to Cuba !!<snap>

    Want an education, health insurance, a job, and retirement -- move to Europe !!

    Best regards,

  14. Boo Hoooo![ Go to top ]

    Volkmar ,

    I can't make any sense of your rebuttal !!

    You have picked a bunch of statistics to imply that we Americans are dumb and Europe is a nice place. Where does your rancour come from ?I choose not dignify your remarks by arguing their merits!

  15. Boo Hoooo![ Go to top ]

    Dear Damien,

    I merely chose to present a different viewpoint to yours to hopefully open your eyes; do you believe that an attitude which labels other nations 'losers', and applauds the perceived 'domination of the world', will win America many friends around the globe (among nations or individuals alike) ?
    Having lived in your America for many years, I have experienced the arrogant disdain you have displayed in your initial post. In the last century, a certain European nation was convinced of its natural-given right to 'dominate the world' and deal with those 'losers' appropriately; thankfully, that all came to an end on May 8th, 1945.

    Be nice to people on your way up; you will need them on the way down...

    Best regards,

  16. Boo Hoooo![ Go to top ]

    Well this is quickly degenerating into a ridiculous conversation. Volkmar, I think that you misunderstood what Damien was saying, or you just had some stuff you wanted to say and decided that Damien's post would be a good enough platform to launch into your own tirade.
    What Damien was saying (I believe - well I am saying it but I think that this is what he is getting at. My apologies if I am wrong in speaking for him.) is that in this economy we should not whine about jobs being outsourced, but rather look for ways to demonstrate our value to corporate America. It may not be as easy to do as it was 3-4 years ago but what choice do we have? Unions? More laws? No thanks. I prefer the wisdom of the market.
    Also, Volkmar -- please do try to keep the comparisons of the U.S. to WWII Germany to a minimum. They are not only inaccurate but rude.
  17. Boo Hoooo![ Go to top ]

    Dear Ray,

    I agree wholeheartedly with you that this is a website dedicated to J2EE, not history or politics. (And in that regard, it IS degenerating into an argument over things other than J2EE.)
    However, when I read someone's comments applauding a country's (imagined or not) success to, may I quote, "dominate the world just because some some of you losers have difficulty", I feel the need to voice my opinion. Also, Ray, I believe that you will understand my (as a German) particular disdain for freely and thoughtlessly trumpeted statements about "world domination" (by anyone); and if someone wants to express their mistrust about unions or more laws, what business does that person have putting terms such as 'world domination', 'losers', and degrading comments about Russia or India or Cuba in that statement ?
    (Also, I believe that there is plenty to discuss regarding the 'benefits' of a society organized solely according to the principles of 'corporate meritoricy'; retired Americans who have worked all their lives and payed into their retirement funds to now find out that some 'corporate gentlemen' at, say, Enron have robbed them of a lifetime's savings might have some interesting viewpoints to add to that discussion...)
    To keep this from further meandering into the realms of politics and social studies, I will close my comment by saying this: if someone doesn't possess the eloquence to express their views in a manner that is, as much as possible, non-offensive to the intended audience, they might consider sticking to the intended points.
    As I've learned during the years that I've lived (and very much enjoyed, and kept in fond memory) in America: "If you can't say anything nice, don't say anything at all."

    Kind regards,

  18. Focus[ Go to top ]

    "In this economy we should not whine about jobs being outsourced, but rather look for ways to demonstrate our value to corporate America."

    Yes, please, that is on topic. I'm one of those people in corporate America who justifies the value of developers to my bosses. I came hear to read what you have to say on the topic.

    And Volkmar, as a former Enron employee, I don't even what to think about corporate meritocracies right now.

    So, in today's economy, where do you add value, folks? I'm not saying I don't believe you do, because I do. But I know some of the people here have said software engineering is a hoax. Is it? :)

  19. Offshore myths[ Go to top ]

    I am working on my third project in 3 years to replace some badly written software the original managers had developed very cheaply. Since we are critically,"we as in IT industry" measuring total costs of systems, mgt. realized they are losing money.

    Long story short, None of the failure of the projects were/are offshore vs. local labor discussions. As usual, requirement gathering, design and proj. management skills created the failure.

    With a good design I can get high school kids to deploy a pretty serious J2EE billing system.

    Some numbers, the company I work for paid $300,000 for a document conversion system from China. They hired an army of code slingers, "most of whom wanted to come to the US to work(btw)" The local team was about 2 months away from finishing when their project was cancelled. At the time 3 local guys were earning the typical $55 an hour because they could spell Java. Since nobody knew for sure how long the project would take locally the China road looked cheaper.

    2 years later, 3 techys nurse the software 24 hours a day with a failure rate of about 10%, failure meaning manual intervention of document flow.

    The ROI was frittered away a year ago... Yet managers still get in coders faces about how expensive we are?

    Oh yeah, we are re-writing the conversion system locally.

    The most epensive part of the project was not the coding, it was extracting requirements from people, a very high fixed costs no matter where the software was written. Even more expensive when you do it 3 times.
  20. Offshore myths[ Go to top ]

    Hi all :

     Is anyone think about the maintenance issue after the software is developed off-shore ?

  21. Outsourcing Issues[ Go to top ]

    Maintenance of outsourced code as well as a means to guaruntee the quality of the code itself is definitely an issue. I think also that proximity to the customer will be amore important factor than many realize.
    Like much in this world (please let's not let this degenerate into another political discussion), things tend to find their own natural balance. Yes, many jobs will be shipped offshore, but I also believe that many new opportunities will be created within the US because of this. There are always going to be business problems to solve, and if we can outsource some of the more mundane jobs, it will allow us to focus on more important tasks. Those who understand this, and develop themselves accordingly will be just fine in this economy.

    And Volkmar --
    I will agree that Damien could have phrased what he was saying in less offensive terms. As far as corporate meritocracy goes -- again, I believe the wisdom of the market will prevail here. Yes, a lot of people got screwed on their Enron shares. There is also something called consumer responsibility. The stock market has always been a buyer beware market. Those who don't understand that should not be playing. There is no reason why someone should lose their entire life savings because ONE company tanks.
    And if you look at what is happening, the market is correcting itself. Companies are now taking very seriously the concept of accountability, now that they have seen their CEO counerparts at other firms in handcuffs on their way up the river.
  22. Focus[ Go to top ]

    So, in today's economy, where do you add value, folks?


    I can only speak about my experience. I have worked for very small software companies (less than 100 employees) for 9 years. It seems that small companies outsource offshore less than large companies, although I could be wrong. This would make sense since in a small company like the one I work for, the very products that we sell are very often innovated by the very people that program and create them. As a software engineer in my small company, "Technology enables business" is our motto. We software engineers create and innovate ideas; we give direction to the managers, and they in turn give direction to us. It is a very unified relationship, not too "top down" as exists in many large corporations. Information, ideas, and innovation flows and circulates, rather than being "handed down". With this type of environment, offshore outsourcing makes absolutely no sense. If we outsource our software development, we cut off the very thing that makes us successful: our software engineers and their ability to innovate profitable ideas and simultaneously create them. It is important to note that the innovation and creation take place simultaneously, not creation followed after innovation. The best description of this that I can offer is the "Agile Manifesto" and the "iterative" innovation and software engineering that it creates. You might already be familiar with all this. Because of this, our managers have no intention to outsource offshore. They don't want to kill the goose laying the golden eggs.

    If software engineers and IT people can be allowed to innovate profitable ideas, then keep them. Otherwise, their efforts could be outsourced.

    This only applies to my experience with small software companies. Hope it means something to you.
  23. Developers[ Go to top ]

      I currently work as a developer for an outsourcing company in my country.
      And what I see is a complete disregard for programming and analysis skills in the consulting world. Period.

  24. Focus[ Go to top ]

    I have dealt with two multi-million-dollar outsourced projects in the past two years, one in US and one off shore. Both failed miserably and we end up re-writing both projects in house, wasting millions.

    The problem is that software development is an agile process now and the requirements are changed constantly by the product management and customers. In my life, I interact with product management and marketing daily, to listen to their feedbacks. This requires us to take an agile and more adaptive approach. I just don't see how we can build what have built through outsourcing.

    I think in a few years bean counters will discover that outsourcing just isn't with the ROI and will pull the projects in house. Until then we just have to figure out a way to survive. :-)
  25. Focus[ Go to top ]

    Yes, I agree with all of you.

    When the offshore development proposition came up at my company, I was asked for my input. I just wrote the specs for what I thought it would take to ensure correct, quality software if we did go that direction. I outlined all of the architecture and deliverables I felt we needed to do. The code reviews and testing that needed to be done, the code migration processes. The process for communicating with a team thousands of miles and many hours away. The project management I thought it would take.

    The response I got was "Thank you, we will not be pursuing this at this time." No one wants to take the time and do the work it takes to *really* set up the correct process for working with an offshore team.

    I have no problem with that, I'd prefer small teams of very talented software engineers located here with us.

  26. Yes, the outsourcing is the problem for us. Eventually it will destroy most of the IT jobs in here, unless…
    Why for instance doctors do not care about outsourcing. Technically it is possible – think about dental vacation. For $100.00 you’ll have a new jaw. But it won’t happen – why?
    Just because of protection - licensing, association etc. Probably this is the last hope for IT industry too?
  27. Actually Hong Kong (a very very small place in Asia) is facing the same problem, a lot , a lot 'cheap' (I dont want to be not polite) developers are provided in main land china. Those experienced and not experienced Hong Kong developer are suffering very very very bad. Businessman outsource a lot projects in China and this make our salary decrease sharply. Well, the IT industry in Hong Kong is, in my own view, is gradually disappearing ....

    I guess nowaday the "reasonable" price of a developer is actually equal to the lowest salary finded in the world !!!

    Program developer is actually not a good career, long working hours, low pay (relative), very high competition, outsouring ....

  28. Can't beat them? Join them![ Go to top ]

    If you can't beat them then join them. Become a software architect and ship all of the programming off-shore and pocket the profits. You can't ship relationships and contacts off-shore.

    Also, I hear you can get decent developers in Canada for US$15/hr since the exchange rate is so crummy. Any Canadians want to confirm or deny? Just check out www.monster.ca
  29. Can't beat them? Join them![ Go to top ]

    I work in Canada as a developer. I don't know about contracting rates but salaries for IT workers are definately cheap compared to the US. Depending on the province you are very lucky to get paid $35,000 USD yearly.
    Canadians are also at least moderately educated.

    I think Canadian developers working in Canada would be a good choice for US companies. Geographical distances can also be a factor, and Canada is closer at least.

    The bad thing for the US IT people about this is that the IT worker is cheaper everywhere else in the world, including Europe where people get paid peanuts compared to their US colleagues. Globalization touches everyone, and it is a windy on the top.

  30. Can't beat them? Join them![ Go to top ]

    Damien....good point..
    Volkmar ..Join politics...

    It all evens out.Market will always dominate.Think about non IT people in America "used" to feel when a 22 yr old comp. graduate started earning 60/70/+ $/hr when they got paid 25/30/+.. $/hr.
    when the rates were good nobody complained.Now that the market is bad and u can get business done elswwhere why should u not go there.U would go to a cheaper dry cleaner if that person does the job with the same quality.wouldn't u?