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January 28, 2004

Operation Gadget Starts to Pay Off

Dave Aiello wrote, "CTDATA launched Operation Gadget on November 17, 2003. Today, we received a check from Google for participation in the AdSense Program through December 31."

"This is the first time that CTDATA has received a payment for operating the Operation Gadget website. It proves that a site that does not have a direct selling function can still be considered an e-commerce site. In an article in the U.S. 1 Newspaper about Operation Gadget that was published in November, I said:"

Although Operation Gadget is primarily intended to be a demonstration of our {Amazon Web Services} design and development capabilities, it is intended to be a modestly profitable business in itself, thanks to referral fees paid by Amazon.com and payments from third party advertisers.

"I want to thank Matt Haughey for publishing his article on making weblogs pay, called Blogging for Dollars. It brought together a lot of ideas that had occurred to me at different times over the summer. Haughey's article provides a model for advertising-supported weblogging, and it's definitely worth reading if you are interested in entering the fray."

January 14, 2004

Setting Up a Wireless Network at CTDATA, Talking About it on Operation Gadget

Dave Aiello wrote, "I'm setting up my first wireless network for the office here in East Windsor. This is a big step for CTDATA, because it's been a long time since we implemented a new piece of network infrastructure."

"Unlike previous research efforts, I won't be documenting the results here. This is because that information would be of interest to readers of our new website, Operation Gadget. Here are the articles on Operation Gadget that talk about installing the wireless network:"

"I'll post links to related stories as they are published."

January 2, 2004

Columnist in Business Week Talks About the Hidden Costs of Offshore Programming

BusinessWeek recently published a column written by Christopher Kenton called The Changing Face of Offshore Programming. This is a particularly interesting column because it clearly explains some of the most difficult issues associated with outsourcing development work to other countries. Among the problems Kenton cites:

  • Project management: Kenton says, "I've spent a lot more time than I expected in project management, quality assurance, contract issues, and communication. These issues have added significantly to the bottom-line costs of outsourcing."

  • Intellectual property protection: Through research, Kenton determined that there are no real international standards for intellectual property protection. Although some extremely large companies try to break projects into discrete pieces so that no one overseas contractor has a comprehensive understanding of the project, that increases project management costs even more.

  • Quality control: Kenton has been satisfied overall with the quality of code delivered by overseas programmers. But, he has carefully selected the projects that he sent overseas, and employs state-side developers to help with quality assurance on these projects. Kenton felt almost compelled to do this because: "I don't think it's smart to deliver a code base with comments and variables written in a language you don't understand."

  • Cost convergence: On top of everything else, the fully-loaded cost of developers in low-wage countries and those in the United States are converging. This is probably due in part to the huge downward pressure created by all of the recent outsourcing. But, Kenton implies that the cost differential has to be fairly large before it makes sense for most U.S. companies to outsource even non-sensitive projects.

Another critical element that needs to be considered is what will happen to cost and availability of programming resources as demand increases through the economic recovery? There are still a lot of well qualified American software developers on the bench. Our guess is that a large number of them will go back to work at some point in the next 18 months, if they haven't taken a job outside the industry and want to keep writing software. Will developer salaries and billing rates continue to trend down from where they are, or do current market prices reflect an over-correction?