'Offshoring' has lost meaning, says Nasscom

The Indian IT industry, thrived by utilising its offshore (read in India) capabilities to get a cost advantage and make over $50 billion just by exports. But neither are IT services companies in India nor their clients keen on using the word 'offshoring' given the politics associated with the word in the world market, according to software body Nasscom.

"The word offshoring has lost its meaning and is getting off the vocabulary of our members and customers. This is getting replaced by 'global sourcing' which is already happening; they want to get things done wherever it makes sense for them," Nasscom President Som Mittal told the media here today. Clients come to India not because of the cost arbitrage in terms of salary but to enjoy the 'resource arbitrage' in terms of getting quality manpower, he added.

Mittal reasoned that technically, the word 'offshore' has lost its significance as India and other destinations in the Asia-Pacific (APAC) region are no more offshore destinations for them, but most have started looking at Asia as their biggest market. So, those who develop product and solutions in India for local markets, consider it as onsite similarly to how Indian IT services providers consider countries like the US when servicing their global customers. "Clients always want to get their things done in locations which make business sense," said Mittal.

According to a recent study, the number of people in the age group of 15 to 59 is on a decline in countries like Switzerland, Germany and Austria, which is why they are struggling to get people into colleges. Same is the case with the US and most of the European countries.

US President Barack Obama had suggested to get more and more Americans students to get into technical colleges and study Mathematics. Recently, Digital Europe, the counterpart of Nasscom in Europe, has started a major initiative to persuade the schools to give more emphasis on Mathematics.