History of Outsourcing
Y2K Bug
Another major factor, which played an important role in the history of software outsourcing, was the scare of the Y2K problem. Also known as the millennium bug, it was widely believed that since computers internally represent the years in dates with only two digits, as in 12/31/97, 98, 99 etc, when the year 2000 rolled around, there was potential for data instability and corruption and other unforeseen problems, since the year would not be properly represented. This necessitated an extensive overhaul of all the existing frameworks. The tedious task of reviewing and updating code line-by-line was relegated to the innumerable graduates of the numerous private engineering colleges, which litter India.
Cost was of central importance to Western companies and the Indians were more than willing to accept the money they were offering. This was the first major interaction between the two sides of the world. The cheap and efficient manner in which Indian outsourcing firms completed the Y2K drudge work caused companies in the US to view India not as a backward country filled with tigers and snakes but as a rapidly changing economy with tremendous potential for growth. This was India’s first appearance on the world stage and caused a dramatic alteration in how it was perceived and led the west to sit up and take notice.