BPO market

When I was managing a FWTK firewall in 1994, I was pretty sure that the firewall market will be larger than anything... Every office would need 1 firewall when they were connected to Internet. And every firewall required 1 administrator…..

The server installation, configuration, maintenance, administration, everything was complex with the slackware based firewall. It required dedicated, highly educated manpower for the management.

1 security engineer per firewall seemed pretty reasonable in 1994.

Today, when I look at the BPO industry and the projections for growth such as “McKinsey Report Predicts Robust Growth For Indian IT Services and IT Enabled Services Industry”, I have some sort of déjà vu… There is a belief that more jobs will be created in linear with the market growth, and the BPO cities will be big job markets, and the countries with access to larger human capital will be more successful. That is a dangerous assumption. Job markets will not grow with market especially the low-end/low-cost BPO market. Job markets will shrink with the advancement of technology, there will be need for less people, even the highly trained ones


My “1 firewall 1 administrator” idea was not realistic neither the job market projections for BPO are. From 1994 to 2000, we really worked hard to centralize management, automate operation and improve efficiency with a tremendous investment in high technology services and products. The things done were unbelievable for firewall market, all software moved to appliances, virtual inline firewalls were invented, every type of high availability solutions were integrated, log management became easy with high end event management tools, software got more stable, people needed less support, self service systems were delivered etc….And the result was the elimination of the workforce component. Today 1 group of firewall administrators (e.g. 2 per shift) can manage hundreds/thousands of sites. We do not need a dedicated firewall wizard per site, which was expected. I do expect the similar results in BPO markets, the more technology will be available, the more low-cost routine work BPO jobs will be out of the picture,

BPO industry will continue to grow regardless of the access to low-cost human capital. The need for massive numbers of workers in the industry will shrink regardless.

Creative / well educated minds will always be on demand, but that will take away the advantage having hundreds of thousands of poorly educated engineers. I strongly support the initiatives in India and China on increasing the technical quality of the delivery, and powering the creativity, instead of increasing the low-cost human capital based offerings... In the mean time we may see more Ukraine, Hungary or Egypt as a competitive outsourcing centers.