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Implications of Globalization for Software Engineering--Rafiq Dossani and Martin Kenney
Pages 49-68

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From page 49...
... Programming accounts for 60 percent of industry will be among the fastest growing employers in the Indian software exports, down from 90 percent in 1995. coming years.
From page 50...
... See Figure 1 for an example of contradictory of software offshoring on employment and innovation in the data reported by the U.S. Bureau of Economic Analysis United States and other developed countries, and the implica- and the Indian software industry association, Nasscom.
From page 51...
... In an era of high rates of technological a negative, substitution effect from low-value offshoring. change, both offshore and domestic software work can become In the software industry, the lower value work consists of more highly skilled.
From page 52...
... definitions to differentiate turers, enterprises in this category create software products product software and custom software. The attributes, the or packages for the general consumer market and capitalize size of the market, and the market shares of the two key on economies of scale.
From page 53...
... knowledge is involved. Thus, The United States is the market leader in software product software products are more readily exportable than custom development, accounting for 41 percent of the total. The software.
From page 54...
... For example, a firm might purchase system- data-processing services to running their own workstations. level software products and develop its own applications.
From page 55...
... Siwek and Furchgott-Roth (1993) argue that the lag Israel focuses on software products for the global market between hardware and software offshoring was because soft- and India on custom software for the global market.
From page 56...
... bP/S = the ratio between revenue from software products and revenue from software services. Sources: Arora and Gambardella, 2005 (pp.
From page 57...
... client (Ramadorai, (e.g., ANZ Bank and Citigroup) wrote custom software for 2002)
From page 58...
... . of Bangalore, where real estate was cheaper than in Mumbai, In addition, Bangalore, the capital of Karnataka, is located at the center of the four southern states, Karnataka, Tamil 15  By 1988, 10 percent of the Indian software industry's labor force was Nadu, Andhra Pradesh, and Kerala, which together produce located in India; this had risen to 41 percent by 2000 and 71 percent by 2004 52 percent of India's engineering graduates.
From page 59...
... Most IIS graduates TABLE 10  Share of Foreign-Firms' Revenue and Share and most research were directed toward the public sector, of Custom Programming and Applications Management but some indirectly supported Bangalore's development in Work in Indian Software Exports software. This was because the government had decided to Financial Year 2001 2002 2003 2004 2005 2006 (E)
From page 60...
... sources of revenue, a more reliable labor pool, and, perhaps, an interest in establishing a base in China or India for access Case Study: Broadcom ing domestic markets. In consequence, established firms may use offshoring as a non-integral part of product development, Broadcom, a Silicon Valley-based fabless chip firm, for purposes such as product upgrades and second-generation acquired an India operation through the acquisition of Arproduct maintenance.
From page 61...
... a 100-person skilled team of ASIC designers might take up to 18 months, putting together a similar team in India might Case Study: Ketera Technologies20 take a good deal longer. To improve skill levels, Broadcom India recruits engineers from the United States, mostly of Ketera Technologies, headquartered in Santa Clara, CaliIndian origin, as a result of which about 5 percent of its fornia, provides inventory-management software on demand Indian workforce is Indian expatriates.
From page 62...
... . In 2004, Netscaler India employed SAP, a large German applications software firm, began its approximately 60 engineers to develop other features and offshoring operations to Bangalore in 2000.
From page 63...
... The ultimate goal in as a definition of "service." Most people agree that "manu TABLE 11  Stages of Software Offshoring to India by U.S. Firms Initial Stage Offshoring Reason for Stage 1 Offshoring Reason for Stage 2 Firm Type of Work Onshore Stage 1 Offshoringa Stage 2 Offshoring Agilent Embedded software In house In house, Control In house, Coordination stabilized in not integral integral Stage 1 Broadcom Chip design In house In house, Scale integral Hellosoft IP development Offshoring operations Integral from the start Ketera Software-as-a-service In house Outsource, In house, To improve coordination and not integral integral resolve labor-quality issues Netscaler Router software In house Outsource, In house, To undertake more complex not integral integral product development Tensilica Embedded processor In house Outsource, Rapid ramp-up In house, To improve coordination and not integral not integral resolve labor-quality issues SAP Applications development In house In house, Cost and scale In house, To improve coordination and not integral integral resolve labor-quality issues ain addition to labor cost arbitrage
From page 64...
... Mobile user-mobile provider (e.g., two delegates at a domestic firms. India, by contrast, until a few years ago, had conference who exchange information through Blue- offered only routine programming work for more than two tooth-enabled laptops)
From page 65...
... Hence, offshoring software development realized that the hallway discussions and white-board brain- that is a step behind the work being done in the developed storming are still happening [in our firm] , but in India." country enables engineers in developed nations to innovate In summary, there is little doubt that work that is modular- even more and is good for both developing and developed ized and standardized and does not require regular customer nations.
From page 66...
... In addition, by locating softgave displaced workers time to acquire skills to shift to other ware developers in India, the vendor can supply services occupations. for clients in different time zones, thus making efficient use As the rate of offshoring in the Indian software industry of capital and real estate.
From page 67...
... 2005. The Indian software industry and its evolving service Mukherji, A
From page 68...
... 2002. The Indian software industry from an Israeli perspective: NSF (National Science Foundation)


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