Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 7)

Sramana: What financing strategy have you followed to build Systems In Motion?

Neeraj Gupta: When we started, we knew this was not a business that bootstrapping could facilitate. We needed a leadership team that could engage with senior-level management. We needed a legitimate delivery center in order to solicit work. >>>

Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 6)

Sramana: In the nearshore industry, what dynamics are you seeing and who are your primary competitors?

Neeraj Gupta: Clearly, companies are still trying to figure out what to do. They are cognizant of [what is going on in] Argentina and what is going on in Mexico. We have seen most of the Indian service providers establish U.S.-based centers. >>>

Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 5)

Sramana: Are you finding future workers while they are still students at local universities and colleges?

Neeraj Gupta: We are doing lateral hires in the market; we hire directly from the University of Michigan’s bachelors and graduate programs, from Eastern Michigan University’s bachelors and associate programs; and we are also getting candidates from the masters CS programs who are foreign students. >>>

Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 4)

Sramana: Latin America, Eastern Europe, and the nearshore U.S. are all options that are coming up a lot now. What is the risk to India?

Neeraj Gupta: India is the only place where software development works at scale. There has been a lot of investment in India, and I think it is here to stay. The biggest challenge companies face today is determining how much more money to put in India. >>>

Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 3)

Sramana: When the three of you came together to found Systems In Motion, you had a set of analysis about the dysfunctions and gaps in the outsourcing industry. I have a piece that addresses this titled The Coming Death Of Indian Outsourcing.

Neeraj Gupta: That was a great piece that you wrote, and we echo the same sentiment. I had been on the sales side of selling offshoring for the previous four years. >>>

Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 2)

Sramana: Where in the Midwest did you establish operations, and how did you know Colin Chapman?

Neeraj Gupta: When we decided to explore the low-cost domestic sourcing model, we spent three months looking at different locations in the U.S. We talked with various state governments. In 2009 there was a lot of debate about job creation. We talked with folks in Austin, Texas, and in Columbus, Ohio before we ended up in Michigan. >>>

Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 1)

Neeraj Gupta is the CEO and co-founder of Systems In Motion, a nearshore outsourcing company in Ann Arbor, Michigan. Previously, Neeraj was a member of the executive team at Patni, a $700 million Indian IT services company, and founder/CEO of Cymbal, a services company focused on the telecom sector. He is an investor in and board member of various technology startups.

Sramana: What is the background story of the three founders of Systems In Motion? How did you meet?

Neeraj Gupta: The genesis of the organization came from all three founders, each of whom had experience working in global services. >>>

Outsourcing: Joe Lawler, Chairman, President And CEO Of ModusLink (Part 6)

By Sramana Mitra and guest author Aditya Modi

Sramana Mitra: But Apple is an extreme case, right? They are very much about vertical integration and very much about an internally controlled kind of philosophy.

Joe Lawler: They are an extreme case, but they are certainly not alone; SanDisk has done the same thing over the past couple of years. This is a business that was outsourcing chip production for a long time and has now built their own facility, and they are operating their own facility because they saw what was happening to the cost curve, and they needed to come up with a different kind of answer. I think the point is that, I don’t see anybody reassembling and becoming a totally vertically integrated business. That is not happening and I don’t see that trend, but I do see that there is a selective in-sourcing and outsourcing that is going on. I think you will continue to see this. >>>