The next big offshorer?
The company is aiming to be the biggest operation in China providing application development services to clients outside the country. And the numbers show it is making progress. Freeborders, founded about four years ago, doubled both its revenue and head count last year, and it now has about 370 employees working out of Shenzhen, China. The company is adding about 60 people per month, according to co-CEO John Cestar.
Even so, Freeborders is up against some stiff competition. India-based outsourcing giants such as Infosys appear eager to establish themselves in the Chinese software outsourcing industry, a field that has been fragmented.
One of Freeborders' secret weapons, though, is its human resources approach, Cestar says. While Indian companies are using Indian managers in China, Freeborders uses Chinese nationals (who've spent time abroad) to minimize morale problems, he said.
Cestar said he got a firsthand lesson about the difficulties foreigners face trying to manage Chinese employees while working on a project to buy software companies in the country some years ago.
While that effort centered on selling to the Chinese domestic market, Freeborders is focused squarely on international clients. The company already has snagged big-league customers such as Target and DuPont and is now going after financial services companies.
Although revenue from information technology services is rising in China, it is barely half of India's $12.7 billion a year, according to a recent report from consulting firm McKinsey.
Cestar, though, argues that offshoring to China potentially is as big or bigger than offshoring to India, thanks partly to a lack of wage inflation in the world's biggest country.
"In the next 18 to 20 months, the Infosys of China will emerge," he said.
Freeborders seems to be in the running for that title.
