Friday, May 04, 2007

I, Cringely . The Pulpit . Lean and Mean | PBS

LEAN is about offshoring and outsourcing at a rate never seen before at IBM. For two years Big Blue has been ramping up its operations in India and China with what I have been told is the ultimate goal of laying off at least one American worker for every overseas hire. The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division.

Well, it *is* "International" Business Machines after all. I think a good case can be made that if the company wants to do more business in India, Russia, China, Brazil, etc., that it would be a good idea for it to hire more people in these countries.

As far as US Business is concerned, suppose a potential customer of IBM wants to dabble with its own offshoring effort, but with a familiar vendor who has already worked out the logistics?

Unless (as a US worker) you are a plumber, dentist, or someone else who's physical presence at the job site is required, you are probably overpriced in the world market. This imbalance will get resolved eventually, though probably not in most of our lifetimes. About time we got over being shocked about it.

Remember Ballmer saying he was going head to head with IBM in services? What ever happened to that? Unlike software sales where you can lock customers in for many years (and IBM knew about this before Microsoft even existed) the services business involves real work, and you can lose big chunks of business almost overnight. IBM is where it is because they gave the easy stuff away to Microsoft and Intel a long time ago. Comoditization has made that old turf not worth fighting over any more. The consulting business still CAN be worth fighting over, but my bet is the winners will not have all-US workforces, that is, unless isolationists take over both the Congress and White House.

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