The Hindu Business Line : US firm `floats' offshore project near coast — Indian programmers apply in large numbers

SWIMMING against the tide of IT contracts moving to low-cost destinations such as India, California corporation SeaCode claims it will bring a `sea change' in outsourcing. It plans to hire 600 techies from across the world to work on US projects aboard a cruise ship a few miles off the coast of California.

Despite intense industry scepticism and disbelief, Indian IT engineers and programmers appear to be applying in large numbers to be a part of the `newly-floated' venture.

"Without doing any recruiting at all, we have already received thousands of applications from all over the world. About half have come from the US and 40 per cent from Indian programmers and engineers. We expect to begin operations in or around the first quarter of 2006," Mr Roger L. Green, Chief Operating Officer, SeaCode Inc, told Business Line in an e-mail response.

SeaCode says its model would optimise cost, convenience and speed of delivery of projects for its clients by managing the proximity of the work. The ship-based model avoids H-1B visa hassles while still exploiting offshore labour cost arbitrage. "The 600 workers can be paid at a lower rate than legal rate in the US, saving SeaCode the cost of appropriate visas. It also obviates social security issues," an industry observer said.

The SeaCode ship is the key to this model, but a carefully managed offshore component is also anticipated. "Phases of project, which require more change, collaboration and knowledge transfer, are done either on-shore (within US) or near-shore (in the ship), while work involving little interaction can be done either near-shore or offshore. Partnership with Indian IT services companies will provide SeaCode customers access to lower cost services in areas like testing and production coding, where customer interaction is less," Mr Green said.

Since SeaCode is incorporated in California, profits are generated in the US, and SeaCode would pay US and California taxes, he said.

Average salaries of $1500-$1800 per month would be higher than India, but less than programmer salaries prevailing in the US. "The ship will not be `flagged' in the US, so the employees on board will be protected by the laws of the country in which the ship is flagged as well as international maritime laws. "We are considering countries like the Bahamas, the Marshall Islands, or Vanuatu," he said.

During off hours, programming teams can partake of the ship's recreational facilities or head for the shores on a water taxi, since each worker will be required to have a US tourist visa.

`Model unsustainable': The Indian IT industry, however, feels that the model would be unsustainable in the long term, as it cannot be scaled-up.

"If US companies are outsourcing work to India, it is not only because of the cost factor but also high productivity and access to skills. In this backdrop the concept only has a novelty value," Mr Sunil Mehta, Vice-President of Nasscom, said.

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