Honest question and I'm probably going to ruffle a lot of feelings:
In the age of AI coding, what is the point of outsourcing your programming to TCS, Wipro, et al? These consultancies are not building groundbreaking innovative stuff, they're building the drudgery enterprise software to handle taxes or business intelligence tools. Things that are perfect for AI (don't get me wrong, AI is perfect for a lot of other types of coding too).
Or is it that outsourcing is cheaper than AI tokens?
The nice thing about these types of questions is that the market is very good at finding who needs what; we don't need a central planning committee.
The market IS very good at that, what it's not good at is handling externalities for citizens of a country that arise from taking the most efficient market path.
Cool theory. But there are confounding factors: H1B employees get exploited like a species of indentured servants. Lazy managers like that they are compliant and happy to implement stupid ideas.
> we don't need a central planning committee
Ironic phrasing, as in my experience the steelman argument in favor of these companies is "The customer is really bad at thinking through their own requirements."
Then let that customer fail, and others prevail.
I agree that we don’t need a central planning committee.
But if you’ve ever worked with the public, you know there is almost no cultural onus on nontechnical people to properly hire or contract technical people for technical tasks.
So…no: The market isn’t very good at this - yet.
When was the last time the federal/state government failed to collect taxes? Or disburse social services? When did your bank not credit your interest?
This stuff is all contracted or subcontracted to these sorts of companies. You don’t need technical geniuses. You need good enough at the lowest cost.
The IRS getting okay work out of a contractor is not the same as a random food manufacturing or trucking company trying to contract work out.
Consulting companies, especially the largest ones, are known to employ more hacks than competent folks - because they can. (This is the “lowest cost” you mentioned.)
Just read the stories here about the big names.
Succeeding in not being sued - most of the time - doesn’t mean you’re doing good work or good business.
> we don't need a central planning committee.
That is an ideological creed, not a fact. It might be true, but you're just smuggling in your priors with no evidence.
Is it though? Markets may be perfect, but humans are not. There’s plenty of laziness, incompetence and corruption, even in capitalism.
I guess it’s the least worst option we’ve found. That doesn’t mean it doesn’t need any guardrails at all though.
I always marvel how “hacker news” is so pro capitalism and pro billionaire class. Site should be named “silicon valley hub” or something.
Late stage capitalism is a scourge for humanity.
Hey man, I don't bite the hand that feeds me.
Sir, this is HN, not Reddit.
Could have fooled me, especially with completely useless comments like the one you just posted.
1. Risk - you throw an SLA on services and can point fingers when shit hits the fan
2. Circular agreements - you get them to sell your goods/services in the region of their home country
3. These count as "Services" on the P&L and provide massive tax advantages to the company because these aren't treated as labor costs.
This may be from an old context in my brain since I worked with some of those companies, so those reasons may have changed or impact may have with various regulations, etc.
Addendum to risk: larger companies can throw bodies at escalated issues.
Good luck trying to get a 6 person shop with a full calendar of other-customer work to suddenly prioritize a show-stopping bug that's only affecting you.
Oh totally. This is a playbook for a Fortune X00 company. Layoff your staff and create a "services" SLA contract with a third party company to deliver IT services. Just the legal team to get thru all the docs alone means you need a legal and procurement/contracts department. Not for startups.
I had a chat today with a friend about this. I think my working thesis is that AI is bad news for outsourcing/offshoring.
What was it good for? Well, often it was prompting a person in a low-cost location what code to write. He would pick it up in his timezone and implement it overnight, and present findings/questions as a response.
The problem is, coding has made implementation super cheap. It is now so cheap you have to compare it to the cost of dealing with someone in another timezone, who does not have the same cultural context on the problem. They also can't ask you clarifying questions while you're asleep. AI wins against the offshore guy, on both money and context.
Who does it help? Amazingly, the experienced onshore dev who thought he was going to be unemployed past 40. This person is now able to implement several things concurrently, has experience in making technical decisions, and has local cultural context.
For me and my engineering friends I hope you are right.
Based on the last 5+ years at working at FAANG adjacent companies - less than 5% of a SWEs time is dedicated to coding (Exceptions of course for crazy things like porting massive code bases to Rust...) - If anything - now that "coding has been solved" - it significantly reduces the need for body-shops, because now you require strategic product decision making - much harder skill to hire for/develop than yet another LeetCoder.
So - definitely agree with your general thesis.
And that's also why the quality of FAANG products has been going down for the last 5+ years.
It's really palpable, developers in these orgs just stopped caring about the quality of their work.
Is it possible that individuals or groups use outsourcing as a way to funnel money into their private interests? IMO we're looking at good old corruption.
The employer/employee relationship is an important one, and it doesn't work the same way with AI.
No, people should honestly confront your question. The “skilled labor shortage” premise for the H1B is dead, at least in tech. Maybe we still need to bring in a handful of superstars. But at this point I think TCS, Wipro, etc., exist only due to foreign lobbying efforts.
They tend to take care of sustainment and certain tasks more cost effectively.
This is a pretty stupid thing to do, btw, as whatever isn’t AI will just be offshored, which reduces government and social security revenue and closes a pipeline to get smart immigrants, who tend to vote Republican.
The village head typically prefers people from his own village. Not rocket science.
Not always. Many places will avoid hiring people to do the work instead they just contract it out. Saves them money in short term. Why hire someone at 100k, pay 401k, insurance, pto when I can simply buy it for 50k.
If you build anything worth building you’ll know contractors are a net drag in the long run. It’s a mistake most rookie middle management make and learn the hard way.
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