When President Barack Obama pointed to Bangalore this week in his effort to keep companies from "shipping jobs overseas" to take advantage of tax breaks, he picked an Indian city that is a worrisome symbol to U.S. tech workers.
Bangalore is a major offshore center and home to companies such as IT services giant Wipro Ltd. The company, and others like it, isn't growing because of tax breaks received by U.S. customers, but because of its low wages to highly skilled workers and its process and technology improvements, especially in remote management, analysts say.
This doesn't mean that U.S. companies, with higher-paid workforces, can't compete with India's offshore providers.
PC Helps Support LLC, a company based in the seemingly unpronounceable Pennsylvania village of Bala Cynwyd (pronounced Bala, as in "gala," Kinwood). The company is nowhere near the scale of Wipro, but it can recognize opportunities.
For instance, just after the iPhone hit the market in 2007, PC Helps Support added Apple's smartphone to its list of support services. When Microsoft Exchange support arrived for the iPhone, PC Helps Support was ready. It recently got an iPhone support contract with Alaska Airlines, said Jen Darr, a senior productivity analyst and writer on PC Helps Support's blog.
Rob Enderle, an independent analyst in San Jose, said it appears as if PC Helps Support, with its iPhone capability, is "jumping on an opportunity, and it could be a big one," because Apple "has never stepped up to corporate level support on any of their products," he said.
In the case of Alaska Airlines, the company gives employees the option of using the iPhone for work, an airline spokeswoman said. For PC Helps Support, the most common iPhone question it gets from users is about mail setup. That's followed by queries on usability, shortcuts, tips and tricks, Darr said.
PC Helps Support has about 250 consultants delivering help desk services, such as supporting transitions to the latest versions of Word and other Office products. It supports more than 160 applications. It focuses on personal, rather than rote step-by-step, delivery of its services, and doesn't send customers up various tiers. It has carved out a place for itself.
Wipro, in contrast, has nearly 100,000 employees and is on the forefront of the offshore industry's megatrends, which include remote infrastructure management.
Gartner Inc. analyst Richard Matlus, at the research firm's Outsourcing and Vendor Management Summit this week in Las Vegas, told attendees that remote infrastructure management is a "viable" alternative. With the recession, clients "are looking for any alternative to help them reduce costs or maintain service quality when they have limited resources."
Wipro says its management technology allows it to operate about 80% of a customer's IT infrastructure remotely. That includes network , database and server administration, and management and service desks.
Over a five- or seven-year contract, Wipro can reduce infrastructure costs by as much as 25%, said GK Prasanna, senior vice president of technology infrastructure services there. The company also has a 200,000-square-foot data center in the U.S. to supplement its managed services offering.
When Obama talked about tax breaks, he was raising an issue of concern for U.S. multinational companies, not firms such as Wipro.
If Indian offshore companies have an Achilles' heel, it's in their need for H-1B visas to help deliver services to U.S. customers. Wipro was approved for about 2,700 visas last year. But remote management may also help mitigate the need for visas. Remote management, Prasanna said, is the kind of service model that customers "no longer feel uncomfortable with."