OT: Offshore engineering

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I've been debating for several days whether or not to post this message.
Well...here it goes, we'll see what develops.

I read a disturbing article this last week in Time magazine.  It seems to be
available online at
http://www.time.com/time/magazine/article/0,9171,1101030804-471198,00.html .
This article describes the alarming rate at which many types of jobs are
being exported to countries such as India, where the work gets done for darn
near 1/10th. the cost, or less.

Now, before anybody beats me over the head with a digital club, please know
that my intention here is to understand the trend and what it might mean in
general.  As a small business owner facing the need to hire engineers
(FPGA/embedded) within the next six to twelve months I have to ask myself if
my competitors have exported these jobs?  If that were to be the case,
competitive forces alone would almost dictate that I (and others in my
position) look for offshore solutions.

Of course this isn't an issue just in the U.S. I imagine it affects other
markets where wages and the cost of living and doing business is higher than
for some of the offshore providers.

What is interesting and ironic is that some of the technologies that have
enabled this (I'm thinking Internet) were invented, funded, deployed and
developed by the U.S.  Now, improved communications and all related
technologies make the all but most barriers to doing business evaporate.
The same applies to software, operating systems, tools, etc.

That's another issue: software piracy.  The widespread offshore availability
of very expensive software for virtually nothing is certainly a factor in
shifting the business equation in favor of these providers.  I've had to pay
tens of thousands of dollars for all of my development software and I know
that there's someone out there who paid $6 (if at all) for what cost me
$10K.  A level playing field it is not, by far.

Where is this going?  I'm all for globalization and economic prosperity at
every point on the globe, but there are ways of doing it right and, it seems
to me, this isn't one of them.  This feels like a nasty big knife cutting
our own throats on a daily basis.  How do we do this so that everyone wins?
And, how does someone like me support his local talent pool without going
out of business?

Martin Euredjian

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Re: Offshore engineering
I think you'll find that this is a common problem.  In NZ we see companies
leaving all the time.
and places like India and China will always be cheaper.  but the likelihood
of them pirating your project is high too.. if they will steal 10k or 100k
of software think what they will do if your project proves worth keeping!!

But I think you'll find the knife is being held to your own throat by

The more you try to cut costs, the more likely you are to get burned.  And
as companies look off shore more and more because of high labour rates in
the USA, more and more technology will be off shore.  But that's
globalization for you.  The ideal is not to build anything yourself but sell
ideas to other countries so they get polluted not you >:-)  only problem is
.. sooner or later, they will develop ideas and sell them back to you.

So.. if you want to keep your ideas.. then think local employ staff locally
if you can.. but keep the intellectual property in house.  will give you
something to sell during the next dot-com crash :-)

I myself think you should design local, and if it picks up.. manufacture
global.  It will cost more up front, but at least you know where your design
is going and can be reasonably assured that you will be making the profit
from your design.  But also only go to respectable manufactures.. so you
keep your design


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Re: Offshore engineering

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This is not true.  But this isn't what I wanted to see discussed here.

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This is precisely the sort of answer I did not want to see.  Please, no
insults or attacks.

Of course I know that software piracy is rampant in the US as well.  We
probably invented that too!  However, in some parts of the world virtually
nobody buys sofware, ever.  I've seen this first hand, in two continents.
While travelling I've seen "services" that sell just about any software you
want for three to six bucks.  The fact that such deals are common-knowledge
(to locals) has to mean something.

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Again, you got me all wrong.  I'm sorry if I didn't make my post clear
enough for everyone to understand.  Please don't take me as an
ego/USA-centric whacko.  That I am not.  By far.  I'm well travelled, speak
4 1/2 languages and even have family in several continents.  I love my
country, but I also know, understand and accept that it has much wrong with
it and much to be ashamed of.  But, who doesn't?

This matter of global high-tech resource availability is something that will
fundamentally change our lives.  Within my small little sliver of the world
I'm trying to understand what it means and how to deal with it.  How to use
it or not.  I'm having web site design work done offshore for $1,000 that
would cost $20K to $50K to have done in the US.  It sort of hurts because I
know that someone here isn't getting the work.

To be somewhat on topic, I can get FPGA work done offshore for 1/10th of
what it would cost to hire one FPGA guy here.  Or, seen another way, I could
have a team of ten FPGA guys offshore for the same cost of one guy locally.
That's mind boggling.  Large companies are exporting whole departments.  You
follow this to conclusion and, I begin to have doubts about coaxing my son
towards technical fields (he's 4 1/2, so this will be a reality to contend
with in his adult life).

Martin Euredjian

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Re: Offshore engineering

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Ultimately venture capitalists will invest their money offshore and get the
whole company for 1/10 the price.  The only thing left in the US might be
some sales people who actually have to meet the clients (i.e., to suck any
remaining wealth out).

Recently I've been thinking about our class system with respect to
off-shoring both white and blue-collar jobs.  I think that the really rich
people in this country support these policies because they think that wealth
is a zero sum game- if they could just decimate the middle class they will
be really really rich by comparison.

But don't worry, it can't go on forever: when this happened in France,
Robespierre guillotined all of the bastards.
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Re: Offshore engineering
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From people I've spoken to down here in Southern California, most
of the 'famous' high-tech companies (Broadcom, Connexant, etc.) have
already begun investigating outsourcing engineering/design work.  My
contact at Connexant says some departments there already outsource some
portion of back-end (place/route) designwork to Indian firms.  Broadcom
is likely to follow soon (if they haven't started already.)

At this point, the engineering-design capabilities of these outsourcing
companies are 'fairly basic.'  As the practice is in its infancy, the
work-quality is decidedly mixed, varying from company to company and project
to project.  Projects which require ongoing input from the (US-based)
spec-writers often run into complications, due to communication errors or
other logistic problems.  (Sitting down face to face still beats out
email/video-conferencing any day!)  I suspect that as time goes on,
project managers will become more familiar with the process of outsourcing,
and adapt to the logistic issues.

Likewise, as the outsourcing companies compete against one another, the
better performers will garner repeat work, increase their design capacity
and sophistication.

Re: Offshore engineering

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If you really are for economic prosperity everywhere, you must accept
the fact that when the cake needs to be split in more parts, the slices
are smaller. So those who ate almost all of the cake in the past, now
will have less to eat.


Re: Offshore engineering

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It's hard to discuss the topic when these sorts of arguments are presented.
I think I rather jot this one down as a mistake --something I should have
not posted in the newsgroup.  For that I apologize.

If someone has the genuine ability to engage in a discussion (on adult
terms) as to the effect that the "offshore revolution" will have on
technology, markets, product development, IP, manufacturing, the FPGA world,
etc. I, of course, welcome it.

Martin Euredjian

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Re: Offshore engineering

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I was deadly serious, and the concept, though very simple, is also very
hard to confute. When you have a working force ten times bigger, that
works more hours a day for (a lot) less money, how can you think to
compete? In my opinion, the real childish attitude is to blame the
piracy rate.

Some big countries are growing (at least) ten times faster than the
"rich" ones. While in the beginning it was simple for the multinationals
to slave entire villages of mid-east asians for making shoes at 30
cents/hour, now (luckily, I might add) their demands are growing. It is
still a great deal for multinationals, but the margin is smaller, and
someone has to pay.

In a smaller scale, there is the same "problem" here in Europe:
countries like Germany, France or Italy move more and more frequently
the production to east-european countries (Poland, Bulgary and so on),
because it costs a lot less. We are just at the point the USA were in
the mid-eighties: only the "easy" production (not engineering or other
"creative" activities) is moved offshore. But engineering is just the
next step. All men are equally smart, if they get an appropriate

By the way: I'm not a supporter of globalization, at least of the kind
of globalization we have seen in the last 20 years. This
"conquistadores" way of globalizing will become a boomerang for the big
corporations. And for us, of course.

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I think there won't be any technical change, the only effect will be the
change of economic barycentre.


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