NeoIT Hits Start-Up Market

The year-to year supply of newly qualified IT professionals has decreased in the United States. According to the US department of Education, the number of BS degrees awarded in Computer Science fell by 41.7% from 41,889 in 1986 to 24,404 in 1995. This has had a significant impact on the IT labor market and threatens to strangle start-up firms who rely on human capital. Illustratively, the number of unfilled IT positions in the U.S. was 346,000 in January 1998 -- and the situation is growing worse as both the growth in the Internet and "routine" IT expansion are putting increasing demands on this shrinking labor pool.

Frustrated by recruitment foibles and visa shortages, Silicon Valley's heavy hitters have turned to outsourcing as the solution. In theory, it's a great idea: hire remote freelancers or an offshore firm, pay them per project and never worry about relocation, office space, equipment, or immigration. In practice, though, outsourcing is hard to execute. Unless you have a full-time manager devoted to tracking down and dealing with freelancers or software development companies -- and few start-ups do – quality hired-gun software developers are hard to find.

That's all about to change, according to an announcement from, itself a startup in the business-to-business service provider space. The company's online exchange platform acts as a software development outsourcing marketplace, linking buyers and qualified providers on an Internet-based trading floor.

"This makes sense," agrees b2b analyst, Susan Blackburn. "It's the logical next step in a trend. Energy, bandwidth, automobile component and other online trading platforms are the Internet's fastest growth area." The exchange grew out of neoIT's traditional consulting services. In October 1999, U.S.-based healthcare provider

Cardinal Health, a Fortune 100 company, was faced with a shortage of IT talent, the high cost of adding more, and the prospect of delayed projects if it didn't do something about it. That's where neoIT co-founders Avinash and Atul

Vashistha stepped in, assisting Cardinal with an India-targeted outsourcing services suite – including assistance with project specifications, putting together a developer shortlist, evaluating the providers, and handling the bids.

That process turned into its own headhunt -- leading to an experienced executive team and to the online business-to-business exchange neoIT is currently touting. "We were very impressed with the ability of these offshore companies to get the job done, but needed a neutral party to assist in provider selection, pricing and project management," says Cardinal Information Corporation Vice President and General Manager, Fritz Krieger. "We saw neoIT as that ideal neutral partner. In fact, when our first RFP went online on the B2B marketplace, we had over 100 software development providers from across the globe review and register for the RFP. That happened in under 24 hours ... in a market where it takes weeks to months to find qualified in-house developers." Cardinal Health currently has two IT projects being handled through the marketplace.

The growth of the Application Service Provider (ASP) market has made globalization of the IT services market possible. That possibility is being matched abroad: the global availability of IT talent and sheer volume of graduates produced is increasing sharply in countries like India, Singapore, Israel and the Philippines. The result is that technology companies are looking beyond their borders to get the job done. And they like what they see -- provided they can find it. is designed to let them do that. The online platform is based on a proprietary technology which simplifies the IT outsourcing process, beginning with the Request for Proposals (RFP) and ending with final delivery of software development and related consulting services. Within 100 days of their launch, neoIT has attracted over 500 providers and 20 buyers.

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