Developed countries like USA, UK, Germany etc, had been monopolizing IT initiatives. IT development in these nations kept taking quantum jumps every now and then, culminating in the present excellent position of use of IT tools and softwares in every sphere of activity, be it business, ecommerce, international trades, knowledge dissemination and education. But this did not last long. Big corporates in these nations were already looking for cheaper ways of developing IT applications. Prohibitive cost of labour, non-availability of skilled labour and huge funds outlay for developing more IT infrastructure, acted as deterrents for these companies. Once they stopped looking inside their own countries for cheaper skilled labour and high-quality infrastructure and started looking to third-world countries like India, China and so on, the search ended. The offshore software development boom had begun.Outsourcing became the rage of the times and outsourcing still continues to be the chief attraction for big application developers of the developed countries.

Offshore outsourcing of application development and other IT projects offer these overseas companies significant cost savings by providing access to cheaper skilled IT labor in countries such as India.The otherside of the coin was that by outsourcing application and software development to third world countires, the developed countries were laying themselves open for the risk of rising unemployment and disillusionment amongst the skilled workers of their own countries. However when new innovative approaches take root, they seldom take into consideration any sentiments or hurt emotions. The tide of offshore outsourcing swept away these weak objections and surged on as companies in USA, UK , Germany and France seized the opportunity to save 30 to 40% costs in application development. These multi-national companies and in some cases the governments themselves ventured forth to outsource their application development and other skilled-labour-intensive assignments to countries like India.

Due credit must be surely given to the countries like India, who have been silently moving towards the IT revolution by a paradigm shift in their governmental policies, focussing on IT education and training, IT infrastructure development and quantum leaps in communication technologies. These countries were ready when the outsourcing boom began. India and other developing countries had everything going for them- Abundant skilled human resources, well-established IT development centres with the state-of- the art technologies and hardwares, advanced communication technologies supported by dedicated communication technologies, assured long-term IT-friendly government policies and the additional bonus of being geographically placed in a favourable Time-zone. These factors led to the sprouting of talented , resourceful private players who stood to benefit from the flow of offshore outsourcing for application and software development assignments. According to Gartner, India has already outpaced all the other third-world countries in respect of volumes of outsourcing assignments , foreign-exchange earnings and overwhelming advancement in all segments like increase in per capita income, standards of living and a fascinating economic growth rate.