Corporations have been using outsourcing as a tool to cut overhead from bloated IT operations for decades, creating an entire industry. As wireless communications  becomes a commodity, carriers will be less inclined to see net ops as competitive advantage, making that function prime fodder for the third party provider. Sprint is the first, but I guarantee that it won’t be the last.

In a a move to cut costs and improve its corporate balance sheet, telecommunications provider Sprint has announced a seven-year agreement to turn over operation of its networks to Ericsson. Dubbed Network Advantage, Sprint will pay Ericsson $4.5 to $5 billion over the term of the contract, and roughly 6,000 Sprint personnel will transfer to Ericsson as part of the deal.

“No other U.S.-based carrier has followed through on the business-enhancing vision inherent in Network Advantage,” said Sprint’s president of network operations and wholesale Steve Elfman, in a statement. “Our best-ever network performance will become even better by leveraging Ericsson’s world-class leadership in network services, their proprietary tools, and the knowledge of more than 30,000 dedicated and highly-specialized service professionals to power Sprint’s Now Network.” (Digital Trends)

In my small circle of acquaintances, most are tech workers and most are struggling. I’ve heard of taking third world pay rates. With more western workers accepting less, it’s also impacting the outsourcing market. Data showing up today affirms that tech has taken a major hit, not just here but world wide.

Tom Silver, senior vice president of Dice.com, told us this morning that Dice.com is reporting a 44% year-over-year drop in job listings for the month of June. May’s year-over-year decline hovered around 45%. And Silver also points to a rise in the Department of Labor’s unemployment rate for the “Computer and Mathematics sector,” (the area best associated with the tech sector). June’s unemployment rate for the tech sector almost tripled year-over year, from 1.9% in June of 2008, to 5.4% in June of 2009. While Silver says that the tech job market is certainly better than during the fourth quarter of 2008 and the first quarter of 2009, the number of job opportunities have remained stagnant over the course of the past few months. (Tech Crunch)

According to the Times of India, the big outsourcing firms are marking down their bills by 35 to 40 per cent.

Apparently it is now possible to hire an IT specialist in India for about $16 per hour, which analysts say is the lowest rate for human labour since Kunta Kinte was imported into the Southern US to pick cotton.

Siddhartha Pai, MD, at the India offices of TPI told the Times that such rates will continue at least until the first quarter next year. (The Inquirer)

This could mean we’re in for an even bumpier road ahead. It also means what the politicians have been doing isn’t working. Maybe they should stop meddling for a while.

A few big name server manufacturers are already delivering self contained server farms in a containers as a quick scaling option for their larger customers. With the growth of out sourced data centers and cloud computing, the shipping container yard could represent a future alternative for the data center and colocation facility. Derelict rail yards not only could provide low cost real estate, but since the rail is also often a conduit for fiber and power transmission, little investment would be required to connect and power up. Better yet, do it in a rural location where the labor costs are low, and vagrancy and vandalism are non-issues.

Compared to building, a top-tier data center that can cost $1,000 per square foot, setting up a container park could be done relatively cheaply — all is needed is a plot of land with the appropriate physical security, a power distribution plant, backup generators and abundant Internet connectivity. These items are available in metropolitan locations where server huggers and their employers congregate. While the containers themselves are self-contained, there should be no reason that multiple organizations and their server huggers could not share servers in a single container. After all, server huggers already share cabinets and cage space in data centers today. (GigaOm)