It seems that someone is thinking about the downsides of outsourcing. A recent interview with none other than Bill Gates included a warning about the potential loss of core knowledge is outsourcing is done do excess. Gates goes on to extol the virtues of internal R&D investment in the article, which is a quantity many companies have been cutting back on seriously these days.

This lesson was learned fairly recently at Microsoft. The Xbox 360 design is an example of this, given that previous hardware designs were outsourced without Microsoft owning the IP. It costs less to do it that way in the short run, but you can lose control of the platform. Case in point: The original IBM PC and the company to which they outsourced the operating system. What was the name of that company again?

Besides control issues there is also the simple fact that outsourced projects still need to be managed. This point continues to be missed by most cost-cutting advocates of the process. Outsourcing is not a replacement for requirements definition, design, and team communications. It just moves the mess further away.

Larry Mittag