Reply to post: Re: A fine plan

IBM declares it's the 'backbone of the world's economy'

WatAWorld

Re: A fine plan

What matters to IBM's executives and sales people is not the long term good of the company, but the bonuses and stock options they can get for cutting costs over the next 1 to 3 years.

The long-term 10-20 year picture is simply not their problem.

Western nations have been outsourcing large quantities of IT jobs to India for over two decades. So claims I'm reading here that outsourcing raises salaries in a country so rapidly that it is only feasible to outsourcers must change countries every 5 years are clearly false. Thirty years is more accurate.

So what was a great place to offshore (ie a great place to exploit low standards of living) starts to see rapidly rising wages and rising staff turnover. Wage inflation in Mumbai, for example, is projected to be 10% this year, against local CPI inflation around 3.5%.

Also, remember: IBM's core business is sales. The senior sales people and their executives are considered individual valuable assets, not commodities. IBM counts on its ability to sell services based on it reputation for quality and cost effectiveness in tech services back in the second and third quarters of the 20th century.

They feel they sales depends on the sales skills of their sales team, and that an adequate sales team can use smoke and mirrors to continue selling any kind of rudimentary commodity technical skills to government and corporate customers based on what a great company they were from 1950 to 1997.

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