Offshore Backlash

White-box PC makers, in fact, are already seeing a dramatic increase in services business from customers who have paid for warranties from so-called brand-name PC makers and have found themselves being routed to India or somewhere else offshore to deal with a support representative reading from a script. These are customers who, in effect, bought an insurance policy for service, only to find it useless when they go to collect on it.

Tom Derosier, co-owner of CPU Guys, a Hanson, Mass.-based white-box builder, sees firsthand the frustration felt by his customers who have been shuffled off to some offshore locale for service. Derosier estimates that about 10 customers a week who have warranties from PC makers such as Dell end up paying him because they are just plain fed up and need service.

The second wave of the backlash strikes at the very heart of a business, namely the mission-critical software that makes a business a viable entity in the current marketplace. Customers being burned by offshore application development or programming are turning to local solution providers to pick up the pieces.

One sign of this discontentment was front and center last week during Dell President Kevin Rollins' keynote at TechXNY. One end user at the keynote, Anthony Landolfi, senior NT Exchange administrator at Aspen Technology, a Cambridge, Mass.-based software developer, complained about Dell's service and support. Landolfi said Dell has shifted some of its help-desk support to offshore companies that don't have a strong-enough grasp of technology issues. "Solution providers would be better than having to deal with a support center in India," he said.

Customers will spend more for better service. That is one of the maxims of the current services-driven economy. Bob Dylan once sang that you don't need a weatherman to know which way the wind blows. There is a growing awareness of the value being brought to the table by the high-touch solution providers. Vendors that leverage that value ultimately will beat the daylights out of those vendors that choose the "penny-wise-pound-foolish" route to market.

What's your opinion? Let me know at (781) 839-1221 or via e-mail at sburke@cmp.com.