Here is what Gartner Research thinks of programmer Over supply.



Stop Recruiting Software Developers
From Gartner Research

The increased use of offshore outsourcing will quietly reshape Europe's software industry and IS organizations leading to an oversupply of software developers.

Key Issue
How will sourcing decisions affect organizational
culture, people and workplace?

Strategic Planning Assumption
Supply of developers in Europe will exceed demand
by year end 2005 (0.6 probability)


Offshore software development is cheap. For example, in India savings of 15 percent to 35 percent can be made on an average applications initiative involving development, testing and maintenance.

Although risk varies by country and project, offshore development is now relatively low risk and perhaps, more importantly, perceived as such. Offshore service providers in countries such as India have been in business for five or more years, they understand the average European organization's needs and working practices and they have built solid skills in popular technologies. Some large enterprises have chosen to develop their own offshore development capability and are now starting to see benefits. So, if good quality software can be obtained with such savings, why pay more?

This question is being increasingly asked in Europe and the United States, especially when the economic downturn has forced organizations to seek cost reductions. Some large European corporations have already stopped recruiting developers with the intention of moving a significant proportion of their development work offshore (in-house or outsourced).

There is a quiet reshaping taking place of IS organizations and the IT industry that will have substantial long-term implications for all stakeholders. What does this mean for the European IT industry?

How much development can move offshore? Projects that are well suited to offshore implementation are those where business and technical volatility are relatively low and release cycles are predictable. On-site, onshore staff are more likely to be necessary where business and technical volatility are high and where there is a need for interactive " high-touch" development, such as small rapid applications development (RAD) teams consisting of business and IT representatives.

Other project characteristics that suggest onshore sourcing include a need for close contact with vendors, partners or business representatives, a need for fast response in the same time zone as the application, and a need for high security. However, such requirements apply to a minority of applications.

Overall, we estimate that the average large European corporation could move up to 50 percent of its IT development work offshore.

The challenge and limitation for enterprise management will be the ability to integrate and manage all their different resources, such as internal onshore, internal offshore, onshore/offshore external services providers (ESPs), and associated risks.

Will increasing offshore wage costs erode the advantage? We expect employment costs to increase in " traditional" offshore development locations such as India — and in fact this is already observable in wage inflation. However, we see several potential new sources of offshore programming effort including Russia, the Eastern block and even China that, if it chose to, could gain significant capacity within a decade. Offshore costs will remain competitive for at least a decade
(0.6 probability).

What does this mean for IS staff? Unless either the demand for software
increases substantially, or political and social barriers or instability impede offshore outsourcing, the implication is that supply of developers in Europe will exceed demand by year end 2005, (0.6
probability ). However, as our probability rating indicates, we do not believe that either possibility is likely.

Contractors face the highest risk, as do those with generic programming skills in popular languages. Developers with deep or specialized technical skills, management skills or vertical business knowledge are less likely to be affected.

What should enterprises do? European enterprises that need to reduce IS
costs should exploit offshore resourcing. In the short term, training and recruiting should be halted while a new balance of onshore and offshore work is established. Onshore recruiting and training should concentrate on skills related to managing outsourcers or conducting the development that can't be moved offshore or outsourced onshore. All
enterprises should seek to increase their ability to work with outsourcers.

Enterprises should also consider how their employees will react to redundancies and training or hiring "freezes" resulting from increased
offshore resourcing. There is likely to be more resistance in countries where the IT labor force is unionized. There is the potential for increased IT unionization in countries such as the United Kingdom.

What should onshore vendors do? Most large, onshore service providers have already established offshore resources because they recognize the
opportunity and the threat, and are at various stages of maturity. Onshore service providers using local labor face increasing offshore competition. Defensive strategies for those ESPs that have not already developed an offshore capability include:

* Abandoning low-margin, labor-intensive work such as programming and testing, or using offshore developers for such tasks.

* Changing the marketing focus and skills balance of the organization to favor higher-skilled staff performing tasks that cannot easily be outsourced offshore.

* Expanding sophisticated services such as business process
outsourcing, that offshore providers have difficulty competing with.

* Finding new reasons for clients to use onshore services. One tactic might be to increase the level of person-to-person involvement in software development by promoting methodologies that focus on client interaction and the social aspects of system design. Such tactics fit well with trends such as the increasing awareness of the social impact of computing and the deployment of mobile computing systems that are
tightly integrated with work and leisure behavior.

Software tool vendors must also consider the implications of this trend. Increasingly, the tools that are adopted are defined by the service provider's preferences; offshore providers tend to be more price-sensitive and less influenced by labor saving features. Tool
vendors must adopt features and licensing models that ensure their
products are attractive to offshore providers.

What should governments do? An oversupply of software developers has several implications for European governments:

* National governments and the European Union (EU) should stop
encouraging educational institutions to promote low-level IT skills such as programming other than as a learning foundation.
Education should focus on specialized IT skills and applied IT associated with other business and technology skills.

* Software developers are a relatively small proportion of the EU
working population but are a well-educated, high-income group with good access to communications. They can be expected to
protest at redundancies caused by more offshore development. Developers
could form a significant lobby in Europe, especially in countries such as the United Kingdom, where staff cuts are more likely because redundancy is relatively easy.

Politicians should consider policies such as retraining subsidies before lobbyists apply pressure.

* Regions where IT employment generates significant tax income should plan for reduced taxation revenue.

What should offshore service providers do? Offshore service providers should exploit the opportunities arising as a result of enterprise needs for cost control. The more-mature providers have already established an onshore presence, and those that have not needed to do so to compete with high-touch work. They need to develop specific knowledge of vertical markets applied to individual countries and quickly build a list of case studies and success stories.


The need to reduce costs will drive European IS organizations to increase offshore sourcing. Governments, enterprises and
onshore outsourcers should prepare for a future in which there is an oversupply of software developers in Europe.


>>I'm not the least surprised to hear that from you. < s >.
>>
>>It'll be interesting to see if in the next decade, say, where .NET technology fits into a graph like the one on page 60 of the July 2002 issue of Wired Magazine. In my view, in ten years, .NET will be lucky beyond dreams to be as significant as the VB branch is on that graph.
>>
>>I suspect that the number of applications written in Visual Basic between 1990 and the end of 2001 will dwarf the number of applications written in .NET between 2002 and 2013, the same period of time.
>>
>>I'm just guessing, of course, but considering that
>>
>> All Development= (New Development)+ (Maintenance of existing systems)
>>
>>then for .NET to be as successful as some pundits predict, then the world needs to be developing new systems at the rate they were being developed through the 1990's and, guess what, that's not exactly a sure bet. I just don't see this happening, at least not in the developed world at least, certainly not in rich Western countries.
>>
>>But of course I could be wrong...
>>
>>**--** Steve
>
>Steve;
>
>After being an electronics engineer and programmer I am ready for my next career – and it has nothing to do with programming. I do not expect programming to be the same during the next ten years as it was during the last 20. In fact I believe the need for programmers will diminish and some new “fad” will take over.
>
>The economy drives the job market and when I began my working career the defense and space industries were the place to be. That is not true today and has not been true for at least 10-15 years. When the economy no longer needs software development on the scale we have seen during the last 10 years or so many programmers will be out of work.
>
>My advice to programmers is to “get a real job” or at least receive training in an area outside of computer technology. Computers will be around for awhile but the need for “hackers” will diminish. I use the term “hackers” rather than “Software Engineers”, as the words “software” and “engineer” do not go together in my book. My brother is a PE (Professional Engineer) in Civil Engineering and I am also a PE in Electronics Engineering. I have never met a “Software Engineer” with a PE. The term “Software Engineer” reminds me of garbage men who called themselves “Sanitary Engineers”.
>
>In ten years we can come back and visit our predictions and see what has occurred. I bet there will be at least one guy doing maintenance of a dBase II program for a client using an original IBM PC. He will be a happy puppy having nothing to do while many unemployed programmers will be talking about “what use to was” in the “good old daze”!
>
>So guys and dolls, while there is a software market - enjoy it and profit from it. Just be prepared for a major career change within the next 10 years - if there is still a world as we know it today. :)
>
>Tom