Tuesday, November 13, 2007

Outsourcing Giant EDS Makes Big Push into China

Source: Itbusinessedge

We have speculated more than once about when China might become “the next India.” (We aren’t the only ones. IDC recently went on record with a prediction that China would become a more desirable offshore location than India by 2011.)

One company that appears convinced of this is EDS. The outsourcing giant is following its recent purchase of a majority stake in an Indian software firm and nudging of American workers into early retirement with moves to multiply its current Chinese work force six times over by 2010, reports the International Herald Tribune.

EDS employs 750 workers in China now, but expects that number to increase to 5,000 by 2010 and to 10,000 “eventually,” according to the head of its operations in China, South Korea, Hong Kong and Taiwan. The EDS exec notes that China “will become or is becoming one of the two dominant players” in outsourcing.

An IDC analyst tells the International Herald Tribune that EDS won’t be the only company shifting software outsourcing work from India as wages there continue to increase. “…Wages in smaller Chinese cities are still relatively low,” the analyst says. Indian companies themselves are taking advantage of this trend, as evidenced by Tata Consultancy Services’ recent expansion of operations in China.