Re: It's not the cost of the laptop dude. The Private Sector for Dummies...
They aren't actually kicking our ass. My company's experiences with offshoring and discussions with multiple tech VC's indicate that you should expect, at best, 15-20% cost savings and usually a longer schedule for an offshored development project.
And that's if the project is appropriate for offshoring (well-defined requirements, not a lot of direct customer interaction required). If you need even slightly agile development, you need to stay onshore or be prepared to lose a LOT of money.
The culture in India can be a big impediment to successful projects. If the spec sucks, you're only going to find out about it when the resulting product sucks. An American developer will usually tell you the spec sucks as soon as (s)he tries to actually build the thing. The Indian and Chinese usually doesn't have it in them to challenge authority (you) that way.
Also, the Indian culture tends to treat information as if it is knowledge. Just because you've read a book on Java or C# and can pass a test doesn't make you a good problem solver or able to keep track of the necessary details in engineering a solution. But I saw little to no acknowledgement of that during my month long trip to Bangalore in September.
These are generalizations, of course. There are obnoxious developers in India who aren't inhibited by cultural norms and are just as good as the best US developers. But there just aren't as many of them.
And perhaps the most important issue is that most offshore relationships are contract relationships where people are paid by the hour or day to work on your code. Contractors think about their relationship to your company and your products very differently from in-house employees with stock options and performance bonuses. This different way of thinking results in a different kind and quality of "buy-in" to your goals. Their check comes from something other than your successful product release. This is true for any contractor, not just offshore developers.
This offshoring experiment is similar to the offshoring experiment of 1990-1992 with the advantage of high-speed data communications (the internet). Though the internet is a real improvement and makes some things easier, the other obstacles to success haven't gone anywhere.
Regards,
Ross