Software Engineering or Body-shopping?

This week, Intel announced its new Xeon 7400 chip and Intel India did all of the design work on this chip!

This, by any standards, is a fantastic achievement, and for a concerned software professional like me, this is a real shot in the arm.

Here’s where I am coming from:

After spending the 80s programming in various languages, I started managing offshore software development teams in Bangalore in the 90s.

My teams in India delivered a series of start-to-finish business application software development projects on fixed-price commercials. This meant that we had complete ownership for the success of these projects, starting with requirements gathering (on-site), through design, programming, testing (all offshore) all the way to production roll-out (on-site again). We took pride in our independence to design the systems as we thought fit, and we derived our satisfaction from the final satisfaction of the end users of these systems.

Then sometime in the late 90s things started changing (I suspect the change started with the Y2K paranoia). Indian software companies embarked on dramatic growth in terms of size and dramatic shrinking in terms of ownership, innovation and creativity.

Size growth is driven by a single factor – bodies. Higer the bodies larger the revenue (this is the “linear relationship between head count and revenue” that people talk about). Rapid ramp-up of offshore development centers (ODCs) have become the norm since the turn of the millennium, and the offshore software business has been well and truly commoditized today.

• We no longer ask customers “what are the goals this software system is expected to meet?” Instead we ask “how many people do you need?”.
• Customers no longer ask “how long will it take to deliver this system?” Instead they ask “how soon can you ramp-up to 500 programmers?”, or to put it differently “how soon can you supply me 500 programmers?” 
• Customers no longer ask “how much will you charge for developing this system?” Instead they ask “what volume discount will you give me if I assure you of 1000 man-years of work over the next three years?”

Here is what Gartner has to say about the rapid ramp-up of the India-3. While giving due credit to the mature body-management capabilities of the India-3 (HR processes, CMM & ISO certifications etc.), Gartner does hint at this commoditization aspect with their observations on revenue-per-person. For a more data-centric analysis (with lots of % signs) of the body-shopping phenomena, check out Sramana Mitra’s blog.

Now I hear the news about the Intel Bangalore achievement, and I get a feeling that all is not lost; in fact, all is well on heaven and earth (and in Bangalore)!

Congratulations to the Intel India engineers! And Guys, Thanks A Ton for keeping our flag flying!