Offshore service providers are in reality IT services firms doing business remotely in a global marketplace. Terms such as global resourcing are now being used and may soon replace offshore outsourcing . An offshore service provider, for example, could also be called a global resourcing partner . The current IT skills crunch in the United States is a primary driver of offshore outsourcing. Companies unable to find skilled IT workers at home are finding a vast pool of highly educated, technology savvy, English-speaking workers available overseas.
Cost savings is another important driver of offshore outsourcing.
The escalating costs of domestic labor compared with the relatively low cost labor available overseas make the offshore model very attractive. The offshore model was first successful in India, a country with a vast population of highly skilled, multilingual workers. India is currently experiencing inflation and wages are predicted to rise, potentially erasing India's cost advantage. In 2000 and beyond, the offshore model will migrate to other countries where there are large pools of highly skilled, English-speaking workers. Ireland, Israel, and Bulgaria are prime contenders, as are Russia and China, provided their infrastructures are developed enough to support the technology needs of foreign-based firms.