Made In The U.S.A.: Small Firms Tout Cheap Native Talent
'We can build a development team in any technology using people in rural America,' says Ross Graba, VP of business development for CrossUSA, which now has 50 full-time employees.
"How would you feel if a 6-foot-2-inch gentleman came into your office and broke down in tears because he got displaced?" asks Basheer Janjua, CEO of Integnology Corp., a Santa Clara, Calif., technology-services company.
The painful side of Indian outsourcing firms' success is the loss of U.S. jobs. But small U.S. development firms such as Integnology are attempting to compete with the offshore flight of IT projects by touting onshore advantages, such as the depth of knowledge and experience of U.S. IT workers, and emphasizing the disadvantages of working with foreign firms, such as intellectual-property and business-continuity risks.
Integnology has 34 employees, "most of them full time," and customers including Hewlett-Packard, Intel, and Schlumberger, Janjua says. He taps into a pool of engineers and developers in Silicon Valley who used to command $130,000 salaries but are now willing to work for half that, or less.
CrossUSA is a development firm in Eagan, Minn., with about 50 full-time employees and six customers in the Midwest. It employs some displaced or semiretired workers from the Midwest, as well as West Coasters and Southerners willing to relocate. CEO Nicholas Debronsky says CrossUSA charges about $42 to $45 an hour, which is competitive with offshore companies when all their expenses, including the onshore personnel usually needed for project management and support, are added up.
The Athene Group in Herndon, Va., has 30 to 40 employees, a network of 600 developers, and customers such as Aegis Insurance, AIG, and New York Life. The company specializes in enterprise application integration, data warehousing, and Web development. "We don't compare ourselves with offshore outsourcers in terms of hourly rate," says Sanjeev Kumar, a partner with the firm. Instead, Kumar says, the company's advantage is apparent over time. "When you look at overall costs over a year, we achieve better results" in terms of turn-around and quality, Kumar says.
However, that may not be enough. "Currently, all the projects are executed within the United States," says the Athene Group's Web site. "We're exploring options which would enable us to provide offshore development services to our clients, should it be required due to the cost benefits involved."
5 Top Federal Initiatives For 2015As InformationWeek Government readers were busy firming up their fiscal year 2015 budgets, we asked them to rate more than 30 IT initiatives in terms of importance and current leadership focus. No surprise, among more than 30 options, security is No. 1. After that, things get less predictable.