IT Outsourcing 2.0: SMBs come to the offshore party

2006 is when IT offshore outsourcing goes mainstream. So far, IT Outsourcing has been perceived to be a big boy’s game. Most of the banner headlines have been about Fortune 1000 companies outsourcing their IT requirements to large, well known IT consulting and outsourcing firms, and increasingly to offshore locations. However, in the shadow of their big brothers, SMBs have also been testing the offshore IT outsourcing waters for the last couple of years. As an offshore software services provider based out of Bangalore, India, we in Cerulean Infotech (www.ceruleaninfotech.com) have seen an increasing share of business coming from North America and Europe based SMBs. I predict that 2006 will be the tipping point – when SMBs embrace IT offshore outsourcing as a mainstream component of their business strategy. 

Offshore Outsourcing rewards SMBs more. Offshoring advocates often cite the promise of more new good jobs being created in the USA, along with the possibility of innovation. Early indications are that the SMBs are the ones that are the first to make good on these promises.

For example, Henry Danish, CEO of Florida based Ezyield.com involved Cerulean Infotech’s offshore development team right from the start of his company. He says, “We came to Cerulean as a 2-member startup team and the idea of a new product. We had no VC funding and it would have been very difficult for us to get things going
without offshore programming.”

SearchSmallBizIT.com reports that Dane Anderson, an analyst with Meta Group Inc., said he's seen similar successes and agrees that SMBs have a tremendous potential to drive innovation through offshoring, as opposed to larger firms that simply ship jobs overseas. "You'll see more strategic impact of offshore outsourcing in the SMB space because they're so tightly knit and there's more re-purposing into product development.”