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India has been the hub for outsourced deals for some time now as the country carried the tag of 'cheap labour'. However the cheap labour is not so cheap any more. According to Bob Muglia, Microsoft’s senior vice president for Server and Tools business, outsorcing work to India and China to cut costs is not a long-term deal.

“We think that through technology, and through software, we can fundamentally change the dynamics of your environment. There’s a lot of ways to reduce cost. You can reduce cost by outsourcing things to India or China, and that will work for a while. There’s a lot to be said for that, and I know many companies have done that for some part of their operation,” Muglia said.

“But ultimately, that won’t be a way that you can contribute to reduce cost, especially as those parts of the world begin to become more expensive in the years to come,” he added.

Muglia said, “Software is really a fundamental enabler, because software issues prevent certain solutions from being deployed, and as software evolves, it opens up new opportunities. We see infinite potential for software to evolve to solve problems.”

“India’s USD 23.4 billion outsourcing industry accounts for most of the country’s software and services industry, which makes up nearly 5 per cent of gross domestic product,” the report added.



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