I thought this article would talk about my beliefs on why Indian outsourcing is ending, but it left out any reasons, so I’ll add my thoughts.

» The Great Indian Outsourcing is over:

The Great Indian Outsourcing movement will be over within two years.

That’s what an architect turned blogger who writes anonymously from Bangalore is predicting. The author is writing from the movement’s Ground Zero, so he may have better insight than the rest of us. But I’ve got good anecdotal evidence from a local outsourcing company that lends weight to his prediction.

I live and work in Charleston, S.C., an area known more for its beautiful beaches and gorgeous live oak trees than high technology (though we do have Robert X. Cringley). But Charleston’s location can attract businesses that don’t necessarily need high technology, just smart people. Outsourcing is one of those types of businesses.

I know personally a project manager at a local outsourcing company. Our daughters go to school together. We were talking at a recent birthday party about outsourcing, cost, and the availability of talent. Business is booming, but it has little to do with cost, she tells me. She says its the lack of local talent that drives most of their business.<snip>

The Tired Architect – our Bangalorian blogger – talks about the availability of talent in Eastern Europe and China, and there’s obviously talent in Central America. Brazil is another up-and-coming technology hot spot.

I agree with The Tired Architect that India’s monopoly on the outsourcing market is over.

The real reason, of course, is money. We’ve created a vibrant middle class in countries where there currently wasn’t one.

As our money pours into the highly-skilled worker’s bank accounts, he shops locally. He funds his local merchants, and presto — the cost of housing and goods goes up in that region. Gradually, the low cost/highly-skilled pool is depleted.

This is why other locales (like Eastern Europe, China and Central America) are being tapped.