IT Confidential: Offshore Outsourcing, Tax Dollars, Trouble

utsourcing will be one of the fastest-growing federal technology initiatives over the next five years, according to a report last week from Input.

John Soat, Contributor

December 10, 2004

3 Min Read

Could we call it something else, like replacement therapy? Outsourcing will be one of the fastest-growing federal technology initiatives over the next five years, according to a report last week from Input, a government market-research firm. Government spending on IT outsourcing will have a compound annual growth rate of 8.3%, from $11.7 billion this year to $17.4 billion in 2009, according to Input. And what's the most significant factor driving the growth in federal outsourcing? A shortage of IT workers, because a significant percentage--as much as a third--of federal IT personnel will reach retirement age by 2006. There's no hotter hot button than outsourcing; add in taxpayer dollars and foreign programming talent, and you've got the potential for a political firestorm, no matter how compelling the numbers are. So far, the feds have kept the lid on. "While offshoring IT services is a growing concern, thus far it remains a minimal part of the total spent on federal IT outsourcing services," said Chris Campbell, senior analyst, federal market analysis at Input, in a statement. But how long will that last? Stay tuned.

It's Not What You Know, It's ... Oh, You Know. No place is that truer than in Washington., the software-as-service marketing machine, said last week that Kenneth Juster will be joining the company's senior management team. Juster just happens to be undersecretary of commerce, responsible for several international trade and technology agreements. As of next month, Juster will become Salesforce's executive VP of legal affairs and corporate development.

Depends On Your Definition Of "Willing." As Larry Ellison gets closer to his goal of buying PeopleSoft, he seems to be getting further away from his dream of owning the San Francisco 49ers. When asked about his football ambitions at the Oracle OpenWorld user conference last week in San Francisco, Ellison quipped that every transaction needs a willing seller and a willing buyer. Apparently, current owners the Yorks aren't willing to part with the hapless 49ers. Maybe they should reconsider. Oracle had more than 20,000 users at its annual event, and if the 49ers have another losing season, they'll need help filling the seats.

"No Can Do--I'm On eBay." More than a quarter of employees say they plan to do at least some of their holiday shopping at work. That's according to a survey released last week, conducted on behalf of Clearswift, an Internet filter vendor, that found 28.8% of 900 respondents planned to use the Internet at work to shop for Christmas presents this year. "Each year the holiday season brings with it the pressure to get the shopping done," said David Guyatt, CEO of Clearswift, in a statement. "With the ready resource of online shopping, it's easy to make a quick visit to a retail site during the day to complete the next purchase. However, organizations stand to lose a great deal of productivity by allowing employees free rein to use the Internet as they please."

Grinch! BTW: Does anyone know the best site to buy a Fender Telecaster and get it by Christmas? How about an industry tip? Send it to [email protected] or phone 516-562-5326. If you want to talk about offshore outsourcing and the feds, Oracle buying PeopleSoft, or Beltway politics, meet me at's Listening Post.

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