where IT will come from
where IT will come from
Date: Thursday, March 17, 2005 5:52 PM
JOB DESTRUCTION NEWSLETTER
by Rob Sanchez
March 17, 2005 No. 1216
The Computerworld article below is the 5th in a series of discussions
that took place with a panel of speakers about where "IT will come
from"? That last article discusses the future of IT workers and it's
not a pretty picture - especially if you read between the lines.
According to this panel, workers will be globally arbitraged - meaning
that labor will be bought and sold as a commodity. In simple terms,
companies will replace high-wage U.S. workers with low-wage foreign
workers, at least until U.S. workers are forced to accept drastically
lower salaries that are based on some kind of global wage scale.
Another series appeared in Computerworld that dealt more specifically
with H-1B and that was covered in a previous newsletter. They now have
added a new "tool" that you can use to compare the prevailing salaries
of H-1B workers with their actual salary. To use this tool go to:
http://www.computerworld.com/governmenttopics/government/h1b/
Don't expect to find out anything useful from this tool because it
seems to be biased towards an agenda that seems to defend employers.
The obvious agenda is to show that H-1B workers always earn more than
the prevailing salary.
As an example, I did a nationwide search for "Systems Analysis and
Programming H1B Salaries". The results are in the table below.
Year 2001 2002 2003
Prevailing $52,875 $53,384 $53,612
Paid $60,357 $60,554 $59,701
Notice that according to this, and every other search I did, the data
indicates that H-1Bs were always paid more than the prevailing salary.
This is blatant numbers rigging because employers will pay under the
prevailing salary anytime they can get away with it. The recent court
judgment against Computech is just but one example of why Computerworld
should be ashamed of themselves for publishing data that is obviously
false:
The Labor Department has ordered a Southfield, Michigan,
firm that places computer professionals at locations
throughout the United States to pay $4,500,503 in back
wages to 232 non-immigrant computer professionals and
$1,222,000 in fines for immigration-law violations the
department says it found during an investigation.
The department alleges that Computech Inc. brought
non-immigrant H-1B workers into the U.S., but failed
to pay them the required wage rate in the areas where
they were employed. Investigators also say that Computech
frequently paid nothing at all to the H-1B workers when
there were no work assignments available.
Computech was unlucky to have been caught and fined. Most employers
have nothing to fear unless an unhappy H-1B tips the DOL off. So where
does Computerworld get off pretending that their fallacious data is
valid?
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.computerworld.com/managementtopics/management/story/0,10801,100170p5,00.html
Reaching out - where IT will come from
As their options multiply, companies will increasingly look beyond the
boundaries of their own organizations to procure IT.
News Story by Gary H. Anthes
MARCH 07, 2005 (COMPUTERWORLD) - A number of existing trends will
accelerate and converge to fundamentally change the way companies
procure IT, in essence pushing much of IT out the door. The
Computerworld panelists say open-source software will proliferate - but
not everywhere - and applications will increasingly be purchased as
services from external parties, allowing some companies to scrap their
data centers entirely. Offshoring of IT will increase, but changing
labor and productivity rates will swing the pendulum back in favor of
in-house systems development for some companies.
Riding the Open-Source Wave
Open-source software will become pervasive for core computing and
business applications - everything from basic operating and
telecommunications systems to accounting, inventory, contact management
and personal productivity applications, predicts Network Services Co.
CIO Michael H. Hugos. "The spread of Linux and open-source software is
ending the need to standardize on any one vendor's software," he says.
Like other developments predicted by our panelists, this one will be
influenced by forces abroad. "In Asia, you are going to see a great
deal more [open-source] encouraged by the Chinese because they don't
want their army or their government held hostage to Microsoft," says
Harvard Business School professor F. Warren McFarlan.
Christopher Meyer, chief executive of Monitor Networks, agrees that
open-source will continue to grow in importance and says that China
will be a major reason. "Established software vendors will be unable to
make their pricing policies stick there," he says.
Commodity IT
"Freeware" will drive prices down, says Don Tapscott, president of New
Paradigm Learning Corp. "Now that Wal-Mart is selling a stripped PC for
$300 - that you can load with Linux, Firefox and OpenOffice - it will
accelerate the use of open-source software." But will those Wal-Mart
boxes find their way into businesses? "The average North American
corporate desktop doesn't seem ready for a Linux-based PC yet, mostly
because MS Office has such a huge installed base and because minute but
annoying incompatibilities between OpenOffice and other MS versions
will not make these savings worthwhile," Tapscott says. "But I think
the invasion of low-cost PCs is inevitable." One impediment to desktop
Linux adoption will be corporate lawyers worried about the legality of
the software, he adds. Some clever hybrid approaches may become
popular, some say. As open-source becomes prevalent, current licensing
terms may give way to a digital rights management approach that keeps
some rights reserved, like that supported by the nonprofit copyright
group Creative Commons, Meyer says. "That approach would, like iTunes,
institutionalize, standardize and legitimize sharing of software and
ensure appropriate control and rewards for producers," he says.
Thomas Malone, a professor at MIT's Sloan School of Management, says
software development efforts will likely gain some - but not all - of
the characteristics of open-source. "For instance, Asynchrony Software
pioneered a model where self-organizing teams of programmers from all
over the Net develop software products together," he says. "But they
don't do it for free; they each get a share of any eventual royalties
from the sale of the products."
Not So Fast ...
Other panelists are decidedly less enthusiastic about open-source
software, at least in some applications. "You cannot assure high levels
of reliability from systems built exclusively by volunteers," says Paul
A. Strassmann, the former top IT manager at the Pentagon. "I admire
open-source software as a means for innovation, but not for delivering
the infrastructure for an information-based civilization." The quality
of open-source software varies, and open-source is often little more
than a backlash against Microsoft, says Microsoft researcher Gordon
Bell. "Many things in the world that are 'free' come at substantial
cost - 'free' like a puppy." Bell warns that "open-source" has a number
of meanings, depending on the goals of the providers and users. "For
example, Linux started out as something that meant free, but now
suppliers are focusing on some advantage and uniqueness for each
marketplace," he says. "It remains to be seen whether Linux will
fragment in the same way that Unix dialects formed, which prevented the
formation of a healthy independent software vendor industry."
IT: Buy It by the Yard
Utility computing - in which users buy IT resources such as storage,
compute cycles or application services as though they were electricity
- is nothing less than "the future of computing," Strassmann says. "The
idea that each organization must invest in its own infrastructure,
custom applications, unique data definitions, and location-specific
software and hardware is economically not sustainable. Only medieval
guilds are comparable to the structure of existing IT organizations."
David Moschella, global research director at CSC Research and Advisory
Services, says the utility model is already here. "It's what most
consumers and small businesses already do as they use and sometimes
even pay for Web-based or mobile services," he says.
Large businesses will follow suit, he says. "Too many IT organizations
are currently drowning in low-value IT work," Moschella says. "Only by
using more-standardized, [utility-style] services can companies
redeploy their resources to focus on things that can deliver unique
business value."
And running computers isn't one of those things, McFarlan says. "Data
centers a decade from now will be gone. You'll be using a combination
of application service providers and third parties for security and
backup and so forth," he says. China will be an important player,
McFarlan predicts. And, he says, an entire industry will spring up
that's focused on very high reliability, redundancy and security. Andre
Mendes, vice president and chief technology integration officer at
Public Broadcasting Service, says that standardizing things such as
wiring, network protocols, desktop hardware and operating systems,
e-mail clients, server hardware and databases has boosted efficiency in
his IT shop a great deal over the past five years.
"The next steps involve the outsourcing of all of these services to
companies whose core competencies focus on the 99.999% availability
that I need, but at a much lower cost," he says.
"The first part that's easy to do is storage, then computing cycles,"
says Mendes. "And once that's done on a subscription basis, then
there's standardization at the application level."
Will Mendes eventually close his data center? "Absolutely. I think
that's actually necessary," he says. "There will be companies that
specialize in ultrahigh security and reliability. It's going to be more
and more expensive to have that in-house, and with that expense comes
additional liability. At what point do you outsource that liability to
someone who does it for a living?"
Users will benefit from utility computing's simplified pricing, Hugos
says, and that will bring with it less-onerous licensing terms.
"Licensing will become simple annual payments based on the number of
users or transaction volumes that a company has. Enforcement will be
largely voluntary because the annual payments will be low and the
software vendors will have easy ways to audit a company and find out if
they are in compliance or not."
Utility computing will gain ground first inside companies as a way to
make more efficient use of their own resources, Tapscott says. "Then,
once they have their internal utility architecture, it only makes sense
that they can plug into outside utility computing resources when they
need it," he adds. But Meyer says he doubts that it will become
commonplace for companies to buy raw processing power like they buy
electricity. "The communications and coordination costs will swamp the
hardware costs," he says. "But there will be applications in very
computing-intensive applications, like meteorology and animation, in
which cycle-grabbing will be an attractive solution." Meanwhile,
Offshore ...
Procuring IT from abroad will become so common, panelists say, that a
broad array of IT services will be available around the world, almost
like a futures market where labor is readily bought and sold, or
"arbitraged," on the basis of small differences in price and quality.
"The software industry will become completely global," Meyer says.
"Sourcing of talent will become efficient enough that deviations of
price from value will be arbitraged. Today, superior software people
move to where they can get paid what they are worth, but tomorrow they
won't have to."
Competitive pressures will force companies to turn to global labor
markets, McFarlan agrees. "Fiber optics basically allows us to
arbitrage labor markets that used to be distinct from each other but
are now absolutely connected," he says.
Offshoring has so far been driven mostly by efforts to lower costs and
make them more manageable, says Moschella. "But increasingly, customers
are looking to their outsourcing partners to help them in areas such as
innovation, agility, value and even transformation," he says. "The
focus of the outsourcing industry over the next five years will be on
improving their ability to be true business partners with impact far
beyond cost control."
And that shift will have a profound effect on outsourcing practices,
says Sloan's Malone. "Eventually, all the opportunities to gain from
shifting work to low-wage countries will have disappeared because the
low-wage countries won't be so low-wage anymore," he says. "When that
happens ... different companies, and countries, will become experts in
providing different kinds of services and products."
GROWTH GOES TO OUTSOURCING
Outsourcing will capture most of future increases in global IT services
spending.
Source: Gartner Inc., Stamford, Conn.
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http://hr2.blr.com/Article.cfm/Nav/5.0.0.0.32334
Tech Staffing Firm Ordered to Pay $5 Million
Friday, March 11, 2005
The Labor Department has ordered a Southfield, Michigan, firm that
places computer professionals at locations throughout the United States
to pay $4,500,503 in back wages to 232 non-immigrant computer
professionals and $1,222,000 in fines for immigration-law violations
the department says it found during an investigation.
The department alleges that Computech Inc. brought non-immigrant H-1B
workers into the U.S., but failed to pay them the required wage rate in
the areas where they were employed. Investigators also say that
Computech frequently paid nothing at all to the H-1B workers when there
were no work assignments available.
The Labor Department ordered that the $4.5 million in back wages be
paid to 232 workers. If the workers cannot be located, the wages are to
be paid into the U.S. Treasury.
The $1,222,000 in fines were assessed for alleged "willful" violations
of the wage requirements of the H-1B visa program and for alleged
inaccurate information on the H-1B application materials submitted by
the company. The company must pay the back wages and fines within 15
days unless it files a request for a formal hearing before a Department
of Labor administrative law judge.
The H-1B visa program allows foreign workers to enter and work
temporarily in the United States in professional level jobs such as
computer programmers, engineers, medical doctors, and teachers. H-1B
workers must be paid either the actual wage paid by the employer to
others for the same work or the prevailing wage paid to U.S. workers
for that job in the local area, whichever is higher.
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