Outsourcing, Offshoring on the Rise in North America, Evans Data Survey Says

Published: May 30, 2006

by Timothy Prickett Morgan

While the CEOs and CIOs of the world don't like to talk about their outsourcing and offshoring practices, the people in the trenches--the developers--who are effected by the outsourcing and offshoring decisions that get made in the boardroom are happy to talk about it. And, if a survey of North American programmers done by Evans Data is any indicator, the practice of using outside programmers is on the rise.

According to the Spring 2006 North American Development survey, which is based on polls of 450 developers, among those companies polled, companies have increased their use of contract programmers by 18 percent in the past year and have boosted their overall outsourcing budgets by 25 percent. In the corporate enterprise segment--by which Evans Data means mission-critical, data center applications--spending on outsourcing increased by 37 percent in the past year and accounted for 57 percent of the development effort. Of those companies polled, offshoring--meaning, sending the development to an overseas region--was now a practice in use at 37 percent of the companies polled, up 20 points from a year ago. The study also showed that small and medium businesses were increasingly interested in outsourcing and offshoring.

"The focus has shifted away from outsourcing or offshoring simply to save costs toward strategic talent acquisition of more highly qualified workers who have been trained in the technology areas that are driving business process change and revenue generation," explained John Andrews, president of Evans Data. "We see this trend continuing to play a critical role going forward as the pressure on IT to be ever more agile and innovative will only increase."

Some 69 percent of developers polled said that Linux was now a valid platform for mission-critical applications, and moreover that they expected their companies, in aggregate, to have a 50 percent Linux adoption rate in their data centers by the end of 2006. Significantly, Ajax, the mix of JavaScript and XML that has recently been given a shiny new name, has seen an 11 percent increase in adoption for application development. And, within the next 24 months, about 40 percent of companies expect to have rolled out wireless extensions to their applications.