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25 September 2009

The Problem With Outsourcing

Let's take a break from the usual issues to discuss something that has harmed two great small businesses in Central Texas recently. The problem is overseas outsourcing. Once again the media made outsourcing out to be a great business idea during the past ten years. Yet the problem is the lack of recourse for those companies that outsource to disreputable businesses. Without legal recourse, many businesses can find themselves held hostage by a vendor outside the jurisdiction of the US. Sensitive internal data can be high-jacked and sold on the black market, including customer credit card information. Organized criminal organizations often find it easier to exploit overseas vendors due to a lack of law enforcement or governmental oversight and many outsourced vendors lack security mechanisms in place to even tell the US-based businesses that use their services whether or not their data is at risk.

Outsourcing impacts jobs in the US. That we know. But in the age of a global economy, most people do not realize that even many small businesses are outsourcing critical infrastructure overseas, including virtual servers, data center operations, programming and so on. Some of these operations are being outsourced to nations which are openly hostile to the US, yet we outsource there because we find they have a lower price on their website. Case in point: Affordable Programmers (, which is supposedly located in Montreal, Canada. This group also supposedly has an office in the US, located in Atlanta, Georgia. However, their programmers are outsourced from overseas (India/Pakistan).

This week I started dealing with a small business based here in Austin, Texas which had a website developed by Affordable Programmers, but the site had to be taken down due to a virus infection. The developers (accessible only by email) have told the client that the virtual server where the site is hosted has no antivirus, yet upon inspection today I found the server does in fact have an antivirus program installed. Now that I am involved, I have attempted all day to contact these developers to get their code (for which the client paid an additional sum of money), only to find the developers refuse to respond. They continue to insist they be allowed to install the site. When I did find their phone number on the website, I learned the futility of calling them. The programmer over the project is never available, never returns calls and has no set work hours--though he is supposedly a team leader based in the US. Meanwhile the client's website remains down, unable to draw customers or otherwise process orders.

By no means is this my first dealing with recalcitrant and unethical carpetbaggers on the internet selling outsourced IT services. Recently a company in Central Texas found their website had been "hacked" and other websites were installed. Effectively the company had been hosting other people's websites for months without consent or knowledge. The outsourced group responsible for this had demanded the client lease a virtual server for their site, which in and of itself is excessive for most sites. The true motive of the china-based developers was apparently to have the client purchase the excess server resources they later used to host the other sites. The client only found this out when they hired a second (US-BASED) web developer to make alterations to the site and he discovered the matter. He did not know how to handle the issue and started deleting the extra sites, which inadvertently destroyed any evidence law enforcement might have wanted, but he did not feel confident in his ability to secure the site. This is where I came in. I was able to determine what websites were hosted on the server after we moved the client's original website to a GoDaddy hosting plan (Yes, you have got to love GoDaddy!) where it was safe, secure and operational. I was also able to identify many of the companies who it turned out had believed their sites were hosted legitimately. Unfortunately some of their site content was destroyed, and the original China-based developers are not reachable by email. These site owners now have found they are just without a website they had paid for because overseas outsourced developers with no fear of legal recourse had taken advantage of them.

Fortunately, in a rare turn of events in today's society, none of the US-based parties are suing each other. I am sure some ambulance-chaser out there could argue that the original company who unknowingly hosted the sites was liable for the destruction of the other sites. I am equally positive that some other ambulance-chaser out there could say the illegally hosted sites were liable to the unknowing host for a portion of the $40 per month cost of the virtual server when one considers she only NEEDED a $7/month hosting plan. Either way one factors the liability, I am just happy these solid, honest American people realized today that they all were abused first by their belief they could get quality results for unreasonably cheap, and second that they were not the victims of one another's acts but of the outsourced group that duped them. As for me...well I am not that bright. Given that the original party hired me to untangle her web server, I was only able to bill for a couple of hours of time. I kept running across the ethical problem of charging for time that should appropriately have been billed to the Chinese developers. Nonetheless, I was able to refer the affected parties who need web development to a reputable technology market site called As a participant on oDesk, I know there are rules that keep outsourced providers honest and provide some safeguards. I was also able to demonstrate that though I am a convicted sex offender with a 5% chance of reoffending, I am at least a little more honest than an outsourced developer who CANNOT be reached by the long arm of US law enforcement.

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