House Price Crash 5

Hereward

ManAtHome wrote:

You don't need many shops to support internet sales, you don't need many IT people to support a single sales channel and/or a package solution - and it doesn't really matter where they are...

Surely it would matter: what if your servers are in Scotland, but your Hardware expert is in India, how are they supposed to fix a hardware issue without being able to see it?

ManAtHome

But once your hardware expert is in India, why would you continue to locate your server farm in Scotland..?

talksalot81

lisyloo wrote:

You will have to excuse me if I don't get too excited until there is firmer evidence.
I have been hearing similar things for 4 years.

At one time the trigger was meant to be the Iraq war, then hurricane Katrina, then Iran, then bird flu, oil prices etc.
At the moment inflation and interest rates look the main concern, but as I said I won't get too excited as it could be like SARS and bird flu and just never materialise into anything.

I was not party to these discussions so can only make a surface analysis. However, the triggers you cite are somewhat different to the one I believe to be the problem - namely affordability. What were the reasons your triggers would cause a crash? The war, katrina, iran and bird flu seem to me to be a concern only by effecting consumer opinion. There is no absolute link between them and the finances of buyers. Oil prices perhaps, but that is relatively small in my view.

I am not citing a trigger, I am suggesting what is the result of it - the affordability. The longer we go, the less affordable houses become. Countrywide the affordability has been OK up until relatively recently. Whether there is a crash or not is debatable. However the affordability issue cannot just continue endlessly. There MUST be a change else fewer people will be able to afford (by definition) thus demand will have to decrease and people will not be able to sell and move on.

There is absolutely no speculation in my view. It is plain fact. If people cannot afford to buy houses, they cannot fuel the housing market.

TTMCMschine

Exactly right talksalot. One side of the equation needs to change to restore equilibrium to the market. The notion that prices will just stay flat for x years is ludicrous.

Warren Buffet says there will be a correction as well, & when he talks the wise listen.

roswell

ManAtHome wrote:

But once your hardware expert is in India, why would you continue to locate your server farm in Scotland..?

Correct, And with many companys dont have there own hardware repair dep they use 3rd partys eg memorex / phoenix etc so if they get a call from the UK or india it doesnt matter they still go out and do the job.

Some have regional as in USA / UK / European farms depending on size of user base they will still have local as in the country server farms all in big data centers with mirrored centers in other locations for DR. But the managment of all this can be dont from anywhere in the world.

lisyloo

Wrong, Many IT firms have outsourced there helpdesk yes, but what you havent seen is that outsourcing of NT admin / DNS / Server monitoring / 3rd and 4th level support models etc to sub saharan Africa ... you heard it here first watch out next year.

roswell - Looks like you are talking about support. I work in development.
At the moment my customer is happy to pay for part of the team to be native english speakers, 2 hours down the road and working in the same hours (not 5.5 hours ahead).
My company is partially offshored but there is a limit to how many we think we can operate with like that.
Some of our offshore employees do not speak English at for (for exmaple).
We find it extrmely difficult to get staff and office space in Bangalore and salary inflation is rampant, so it's not without problems.

"Always expect the unexpected." I hope it doesnt happen just as much as i hope it does happen but either way a little preperation for either wouldnt be a bad thing.

I agree and personally I think I'm quite well prepared but I won't bore you with the details (unless you really want to know).
One thing I've done recently is switched to a fixed rate so that takes away the worry about interest rate rises.

and it doesn't really matter where they are...

I disagree.
If any of your work involves communicating with cutsomers then many of our Indian colleagues are not up to the job.
If any of the work involves visiting local UK sites then clearly someone in a car from the UK can be there quicker than someone on a plane from India.
If any of the work involves European travel then we can get there quicker and more easily (visas etc. needed for no EU people).

I'm not being complacent, just saying I don't think the "end of the world is nigh".
Other industries have been offshores (ragtrade) or in decline before (coal mining, tin mining, muanufacturing, farming).
It doesn't mean the end of the world as we know it.
I'm sure people felt the same when we went from using horses on farms to using machinery. It called progress. It's painful for some, but I don't believe it's the end of the world.

But once your hardware expert is in India, why would you continue to locate your server farm in Scotland..?

Bandwidth to India is currently in really short supply and hence expensive.
I'm sure this can be solved, but those of you who think this is without problems have no idea about the realities.
Getting office space, staff etc. in Bangalore is a nightmare.
Currently there is rampant wage infaltion.
I predict large companies (like Microsoft) will move out of India into China.

However the affordability issue cannot just continue endlessly. There MUST be a change else fewer people will be able to afford (by definition) thus demand will have to decrease and people will not be able to sell and move on.
There is absolutely no speculation in my view. It is plain fact. If people cannot afford to buy houses, they cannot fuel the housing market.

I agree with you.
What this doesn't tell us however is whether we will have a crash or a more gentle slowdown.
I have to admin, the longer it goes on, the smaller the chance of an orderly slowdown IMO.

Some have regional as in USA / UK / European farms depending on size of user base they will still have local as in the country server farms all in big data centers with mirrored centers in other locations for DR. But the managment of all this can be dont from anywhere in the world.

I agree that the nature of IT work is changing somewhat.
This is no different from farming, manufaturing, coal mining, making clothes etc.
I don't think it's the end of civilisation as we know it.
It will hurt some people and they will have to retrain.
Many of us IT people could go and get other relatively well paid jobs e.g. there is a shortage of physics teachers.

talksalot81

lisyloo wrote:

What this doesn't tell us however is whether we will have a crash or a more gentle slowdown.
I have to admin, the longer it goes on, the smaller the chance of an orderly slowdown IMO.

Quite correct. But the differential between income and mortgage outgoings is (as far as I am aware) not far from an all time high. Highs tend not to be followed by long term stability - in many ways that would mean it wasnt a high at all. But yes - we must wait and see.

lisyloo wrote:

I agree that the nature of IT work is changing somewhat.
This is no different from farming, manufaturing, coal mining, making clothes etc.
I don't think it's the end of civilisation as we know it.
It will hurt some people and they will have to retrain.
Many of us IT people could go and get other relatively well paid jobs e.g. there is a shortage of physics teachers.

Speaking as a physics researcher I must admit to finding your comment mildly amusing. One of the major problems with sciences in general is teachers who are not specialists. This is literally killing science in our schools. Physics is worst hit because it is the toughest to understand and toughest to teach.

The understanding of physics by most, which includes IT individuals, is shocking at best. To retrain and be adequately able (in my professional view) would take an individual several years of full time education. If this is what you meant, then I do apologise. However, if you were thinking that an average individual working in the IT profession could retrain by spending anything short of this, then you are either sadly mistaken or are highlighting just how terribly bad our teachers are.

ManAtHome

lisyloo wrote:

We find it extrmely difficult to get staff and office space in Bangalore and salary inflation is rampant, so it's not without problems.

If any of your work involves communicating with cutsomers then many of our Indian colleagues are not up to the job.

India is bigger than Bangalore - not without problems to set up somewhere else, but that's what Bangalore did when Mubai started to get a bit expensive. As for salary inflation - a move from 20% of UK salaries to 30% is a 50% increase, but still cheap (and as you pointed out, once it gets over 50% of UK salaries, next stop China who are currently working up from bulk data-entry).

Communications is a problem - mainly because UK businesses can't define their requirements concisely. However UK boards have a long history of falling for the "this does everything" package - not a problem if you're skilled in this years package...

lisyloo

However, if you were thinking that an average individual working in the IT profession could retrain by spending anything short of this, then you are either sadly mistaken or are highlighting just how terribly bad our teachers are.

I admit, I haven't researched that option in detail.
It was an example off the top of my head.
What I was meaning to point out is that a lot of IT people have skills which could be used in other medium/high paying jobs.
They won't necessarily all end up doing Mcjobs or at B&Q.
I would personally look at accountancy, law, finance or starting my own business etc.
I am aware some retraining would be required and/or low salary to start off with but I would look at these options before flipping burgers or cleaning.

I think it is OTT to suggest that ALL IT people will be left with no income at all. I don't think that will happen. Some will stay in IT, some would retrain.
In the company I work for we are as offshored as we think we can manage.

Communications is a problem - mainly because UK businesses can't define their requirements concisely. However UK boards have a long history of falling for the "this does everything" package - not a problem if you're skilled in this years package...

But it's not just about being skilled in this years package............
It's about being able to get in a car and travel to your customer within 2 hours.
It's about being able to travel to Europe without waiting for a VISA etc.
I am starting to repeat myself now so I will stop.

I don't know what knowledge other people are speaking with, but I can categorically say that my (well known) customer does not want my company to offshore anymore. They want to be able to talk to UK people in UK hours and to get someone to site within 2 hours if necessary.
My employer also believes in an onshore/offshore model TO AN EXTENT and we are already at that extent.

I am not saying that everything in the garden is rosy but I don't think the end of the world is nigh either.

In fact it could be argued that when oil becomes prohibitively expensive then we will stop shipping our meat from all over the world and our electronics from china.
High transportation costs will then override low labour costs in other parts of the world and we will start having to farm and manufacture at home.

lypsey

I am sorry but anyone in there right mind who deliberately leaves their property empty needs stringing up from a tree

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/12/18/nlets18.xml


Or more likely they cannot get tennants?
If this article is true the crash that I think id coming is going to be much much harder than I thought