Outsourcing backlash replaced with indifference

Last year, it seemed that a day wouldn't go by without some kind of study claiming that IT jobs where moving overseas in droves and that India, and then later, China, were destined to take over the world. But now it looks like outsourcing has shed much of its controversial aura while quietly reshaping the global marketplace.

One reason could bethat the idea ofmillions of domestic jobs disappearing because of offshoring was simply false.A fourth-quarter U.S. Department of Labor report released last month suggests that offshore outsourcing accounted for just a small fraction of major, extended layoffs in the United States last year. Secondly, although India and China stand to benefit the most from offshoring, Eastern Europe and other regions of the world are also poised to become significant players. And thirdly, huge mega outsourcing deals, which always made headlines in the past, are out of vogue according to AMR Research. A report published yesterday said, "Users' appetite for large-scale outsourcing is waning, and top service providers are realigning themselves accordingly." This means that the emergence of alternatives to the big outsourcers is leveling the playing field for service providerswho could now be based anywhere in the world, even rural America.
Meanwhile, I thought I'd plug the term into our BT Trax engine, and the results graphically illustrate the decrease in outsourcing interest. The chart below represents total reader consumption of all content tagged with outsourcing which appeared on all CNET Networks sites over the last 12 months. The second and third quarter of 2004 saw the most outsourcing attention. These are the top headlines from that period, maybe you recall themfrom last June: Lost your job? Don't look overseas; Report: IT executives to open wallets wider;
IT morale drops to all-time low.