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Article by Mohan Babu


Andy Grove speaks...and the American media listens

Intel chief Andy Grove has been actively speaking on the competitive crisis being faced by the US. MOHAN BABU writes that when global leaders like Grove voice their opinions on trends, other business leaders, lobbyists and policy makers are bound to take notice

When Andy Grove, the revered chairman of Intel, speaks the business world sits up and listens. He is the same leader and technocrat who brought Intel from the brink after the company faced a severe crisis during the downturn in the transistor business and helped steer it towards microprocessors, in the process coining the term “strategic inflexion point” in his famous book, Only the Paranoid Survive. The author and master strategist is now scared of the competitive crisis in the US, the world’s most innovative technology provider. “I’m here to be the skunk at your garden party,” Grove reportedly told a group of about 150 executives and leaders at the Global Tech Forum, hosted by the American lobbying group Business Software Alliance. In the meeting, Andy Grove indicated that the US was facing a competitive crisis due to a number of reasons, including offshore outsourcing, lack of federal support of sciences education and a “ho-hum” telecommunications infrastructure.

The irony here is that an American immigrant is trying to warn Americans about the looming competitive threat from foreigners. Actually the real irony here is that Intel itself has been outsourcing work to its research and development centres around the globe to capitalise on the markets and to get access to local talents. Make no mistake, Andy Grove, a brilliant technocrat and business leader, would have thrived wherever in the globe he was. The fact that he decided to make the US his home and take Intel to commanding heights is a well documented story of American ingenuity. Grove emigrated from Hungary in 1957 and co-founded Intel in the late 1960s.

To readers of this column, the current trends are not something new; in the over two-and-half years that I have been writing this column, I have attempted to look at different aspects of work-life of technologists, more specifically global techies who want to follow opportunities and trends. Week after week I try to interact with my peers, read technical journals and articles to gather a pulse on the current happenings. To me, paranoia over outsourcing is like crying over spilt milk. The trends in outsourcing are nothing new: Even a decade ago, companies like GE (then under Jack Welch) weaved offshore outsourcing into their IT strategies and the benefits to organisations are too well documented. If we were to look at outsourcing (not just global outsourcing), the history will take us back to the core competencies of companies like EDS, Accenture, CG-E&Y, et al, who have refined outsourcing of entire datacentres of Fortune 500 companies into an art.

Every few weeks or months we see the announcement of yet another “multi billion dollar, multi-year” sourcing contract signed by companies and governments with one or the other large IT vendors. How the IT vendors execute the projects is not a mystery: they consolidate data centres, optimise on resources (aka downsize redundant IT workers) and ensure that they skim a slice of profit out of the entire deal. In the process if some work gets sourced to a lower cost location like India, Ireland, Phillipines or China, so much the better for them. The debate on outsourcing being played out in individual western countries has more to do with lobbying rather than just the trends in globalisation of outsourcing, which as a matter have been ongoing for a while.

The Indian IT industry, which depends on a large part on exports is naturally watching the trends very closely. Executives of Indian companies are also attempting to make their employees aware of the competition in store in the global marketplace. For instance, the CEO of Infosys, in a recent address to employees reportedly tried to make them aware of the competitive threats not just from those opposing outsourcing but also from competitors like Accenture and IBM who are playing the “local” card in markets like the US and Australia.

How the game of lobbying actually plays out is anybody’s guess. What is clear that as more global leaders like Andy Grove throw their hat in the ring by voicing their opinions on the trends, other business leaders, lobbyists and policy makers are only bound to take notice. And rest assured, this is not the last word on this topic from my end.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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