EDS to move application development offshore

Electronic Data Systems plans to close application development centers in the United States and Europe and shift some of the work to offshore locations such as India in an effort to cut costs.

Twenty-one centers will be closed by the end of 2006--17 in the United States and four in Europe, according to CFO Robert Swan--just under half of the 54 centers that the IT services company runs in those two regions.

The company, which announced the decision Tuesday, did not say how many jobs would be affected by the move.

Currently 27 percent of EDS' software application management workers are based in offshore locations; this change will increase that number by a third.

The decision to offshore the application development centers is part of a cost-cutting plan that will eliminate up to 20,000 jobs within EDS' 120,000-employee work force.

Analysts, however, point out that time is of the essence in making the effort succeed.

"The suggested 20 percent reduction in costs over the next period--helped by the movement of application management staff to offshore locations--will enable an increased investment in branding and marketing (already under way)," Ovum Holway analyst Georgina O'Toole said in a research note. "However, this investment will need to bear fruit quickly if EDS is to achieve the turnaround that it is so optimistically suggesting."

Sylvia Carr of Silicon.com reported from London.

[jltnol]

Beware!

Ok.. so we all know the internet is everywhere... but...

in the event of some huge natural or man-made disaster(both of
which seem more likely these days), and the redundant internet
fails.... what then?

the notion that all my personal financial information is sitting on
a hard drive in the Far East with a downed internet connection
doesn't make me rest easy at night.

The more all these servers are offshore with ANY information,
the more they become targets. And if, and when terrorists
figure out that our weak spot is all the data we have on offshore
servers.... well.... look out buddy, its going to be a very bumpy
ride for all of us.

I?m sure they have tons of security but really, retina scans, finger
print, long phrase passwords, usb dongles and the like are no
security match for someone on a mission with a tank.

Desperation

This move displays thier complete desperation as well as the total disregard for thier workers.

I hope that we can get legislation that will discolse where one's personal data is actually being stored. Much like the food industrys requirment to list it's ingredients, soon they will have to lable the point of origin.

As consumers we must oblige companies that we do business with to regard our personal data as just that, "Our" personal data and we buy services that act on "Our" personal data, they do not own this information.

The privacy laws of many of locations where data is being stored is questionable at best Let's extrapolate the most recent debacle as demonstrated by ChoicePoint, who would be contacting us from 'Batswanna' or where ever a company who is using EDS is keeping your data.

Insurace companies, Banks, Hospitals etc. are in the profile of companies who whould use EDS type of services.

Compaines you do buisness with should be required to indicate where your data is being stored, the geographic location and weather or not it's a third party or localy managed.

At that point it's up to you if you want to do business with them.

As for EDS, if how they treat there employees is an indication of there understanding, I do not believe they could care any less about your problems, they are dealing with the bottom line, quarter to quarter to quarter. and that's where it ends.

Contact your legistator, this problem goes beyond the disragard for workers and goes to the core, the control of your personal data

Ross Periot unavailable for comment.

[aabcdefghij987654321]

And if the Indian Government decides they want to see that data?

If the goverment of India decides they want to see the data stored on those systems and perhaps pass it to other companies in India in order to provide them with a competetive advantage, what's going to stop them?

This is a much more serious problem than just moving jobs elsewhere.

[russ960]

Valid Points

I am not a big fan of increased regulation on business but I do think everyone has a good point about the security of our information. Unfortunately the laws that regulate sensitive information in the US are not enforceable in a foreign nation such as India. I do think that India offers a great ability to lower costs and increase competitiveness for US companies but this cannot be done at the expense of American (or European for that matter) security. I'm not really sure if these data centers store customer information or if they simply contain code for application development. Certainly Congress needs to address these security concerns but they should beware of extending their regulation too far and thus hurting our growing economy and the benefit of increased productivity of US workers.

http://russ.johnsonville.net