When I talk to people in sales and customer relationship management, they often tell me how much PHP dominates the scene in terms of offshoring enquiries. Indeed, while offshoring development work to India has always been popular, the growth and dominance of PHP is striking. Amongst the popular offshoring destinations, India is the only one where high end developmental projects make up for the lion’s share. Other destinations like Philippines are still very much stuck in BPOs (calling profiles) and virtual assistants. What is it about India that attracts high end projects like PHP development in numbers?
The competition for Indian developers does not really come from their counterparts in similar offshoring destinations, as mentioned above. Indian companies compete with mostly Eastern European (Ukraine, Bulgaria), Irish and Latin American (Mexico, Brazil and Argentina) vendors for projects originating in the US, Canada, Australia, UK, Western Europe and Scandinavia. With destinations like Philippines, Malaysia and Vietnam not around to play, in terms of cost, the only other country that comes close to Indian rates is its immediate neighbor, Pakistan, which again has a high number of developers. However, given its poor reputation in data security among other things, and continuous political instability, not too many look at Pakistan when it comes to offshoring. Thus India has pretty much a free run when it comes to the price advantage. And how big an advantage is that, you ask? Here is a comparison of the average cost to engage a PHP developer in different countries.
As you can clearly see, India happens to be the only country where you can hire a highly qualified and experienced PHP developer for a yearly remuneration that’s still four figures. The next best on that list is Argentina and you can hire three Indian developers in that amount and still keep significant change with you!
An English hangover!
India’s past as a part of the British Empire means that the English language is well entrenched in the country. It’s also the only common language acceptable to speakers of different languages in India. Hence all Indian universities teach in English. With English education so prevalent, India has the largest number of English speakers in the world after the United States. While dealing with clients, PHP developers from India are more comfortable than their Latin American counterparts, who happen to be their closest competitors. Clients also prefer developers who speak English fluently, which eases communication and leads to less misunderstandings. This inevitably reduces the time taken on projects, due to less back and forth.
The game called numbers!
Do you know the size of the Indian work force? Half a billion! That’s right. Larger than the entire population of Western Europe and the United States. It’s not a surprise then that even in highly specialized domains like PHP development, there are almost twice as many developers available to hire as that of the next best- the US. According to phpclasses.org, the percentage of Indian developers available is a shade under 16%, while in the US, the next best is a shade under 9%. This availability has a huge effect on not just the price (which is bound to come down when so many options are available) but also the quality. Indian universities and institutes are churning out trained developers by the thousands every year and the competition for jobs is absolutely cut throat. That means, that only the very best land a job, and the options that are made available to a client are of incredibly high quality. Many of Virtual Employee’s clients have wondered how we are able to present three or four expert PHP developers at any given moment for a requirement of just one, thus presenting clients with more choices at any point than he/she will have even after looking for six months locally. Well, now you know. And this is where India is very different from other offshoring destinations, like I mentioned before. The availability of such large number of highly skilled individuals for high end projects is unmatched in any other offshoring destination, or indeed overall globally.
Indian BPOs and KPOs which started out as primarily vendors to US and European companies, are today themselves software giants. Thanks to India’s rapid growth in all sectors, not dissimilar to what China achieved, the domestic demand is also very strong. In fact, these companies are now so big, that they have opened centers in the rest of the world, including US, UK, Australia and Western Europe – places from where traditionally work has flowed to India. There are several employees in these regions working in these Indian companies. There have also been acquisitions of, and mergers with, previously US owned or European owned companies, whose western work culture and professionalism has permeated in the Indian work force back home in these companies. This has led to a sea change in the overall work culture in India as well, with Indians very much in tune with US and European work expectations.
Another aspect which has been in favor of India has been its track record. Be it keeping to schedules, quality of work or data protection, close proximity with Western organizations and laws has ensured that Indian firms catering to Western clients have operated on a very different plane than the rest of the domestic industry in India. While the concept of data security is not new in India, these companies had stringent data security and quality rules as early as the 90s. This track record has meant that there is an established trust quotient in Indian companies and brands when it comes to high value and sensitive projects.
On the horizon
The steady devaluation of the Indian rupee vis a vis the dollar and the euro has meant that India has had a dual price advantage- it is the most affordable offshoring destination, and yet salaries have risen which has meant that its middle class, a large section of which is employed in the offshoring industry, has become more aspirational. It has also meant that the outsourcing industry in India has remained capable of pulling in the very best of talent available. Nowhere is such a dichotomy noticeable. Of course, this hasn’t been deliberate, since underdevelopment of its manufacturing sector has prevented a strong currency, unlike China, where despite an export oriented economy and traditionally devalued currency, the Yuan has steadily risen in value vis a vis other world currencies, while India’s has gone the other way. This trend will likely continue, with a high demand for the dollar and the euro in Indian trade, which means that the costs are unlikely to rise much in future, keeping India firmly entrenched as the favored offshoring destination.