Canada Has to Make up Lots of Ground to Rival India's Outsourcing Industry

Ann All

An InformationWeek story asks if Canada could "become the next India for American-based software companies outsourcing work."


The question is posed based on Canada's mention in a recent survey of some 200 independent U.S. software developers. Conducted by SD Forum and Russian outsourcing firm Luxoft, the survey found that, for the 94 percent of respondents that outsource project work, India was the leading offshore destination, followed by Singapore, Russia and China.


But Canada scored more strongly when the same companies were asked about their future outsourcing plans. It was an especially popular option for firms on the West Coast -- like, say, Microsoft, which caused a minor stir earlier this year with its decision to open a software development center in Vancouver, BC. Putting a political spin on it, the software giant cited the ability to "recruit and retain highly skilled people affected by immigration issues in the U.S." as one of the reasons it chose Canada.


Among Canada's benefits, according to survey respondents: proximity, similar culture, abundance of English speakers, security and perceived quality of work. The CEO of Luxoft Canada says, ""This clearly shows what roles other factors play in addition to cost in outsourcing."


Still, Canada will have to come a long way to rival India's popularity as an offshore destination. According to a spring 2006 study by Sand Hill and Persistent Systems, more than 83 percent of American ISVs send product development work to India, compared to just 5 percent that sent such work to Canada or China.

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Oct 5, 2007 12:27 PM Canadian IT Canadian IT  says:
What microsoft has mentioned is probably the only plus point I can see for outsourcing to Canada. There is no limit to how many professionals you can import. Cost may not be the only factor bit it IS a factor. And I can only see costs in Canada (specially western Canada) being higher than in the states because of more expensive real estate. Reply
Oct 15, 2007 11:39 AM Leonard Lee Leonard Lee  says:
The gap between Canada and India will narrow as costs of Indian labor goes up, along with the ever decreasing availablity of high skill labor with experience in India. Not to say that it will run out. I believe Microsoft decision to build a Software development center in Vancouver was mainly due to the fact that there is a lot of bright people there. MS Mail began in Vancouver, BC...which was the beginning of Microsoft's venture into email product. If you look closely at the code name for Microsoft products...Whistler, LongHorn, Blackcomb...these are all named after the ski region just outside of Vancouver, there is a long history of Microsoft in this area. It's about time they invested into a development center there. Reply

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