In other words, the majority of engineers are based in low cost countries, and there are cost arbitrage advantages that can result from outsourcing of product engineering.
At this point we have had initial discussions with most of the significant suppliers who compete based on the Global Service Delivery model. Perhaps the two most interesting conversations involved Satyam Computer Services, who sent a large team into visit ARC last week, and Quality Engineering & Software Technologies (QuEST).
Satyam, with revenues of over a billion dollars, is a provider of diverse IT and Business Process Outsourcing services, including engineering services. In what they call "extended engineering services", they did over $80 million in business in the last calendar year. In contrast, QuEST is a much smaller company. They had 2006 revenues of about $40 million. They were also much more focused on product engineering services (about 90 percent of their revenues come from engineering services).
