"I have the ability to dial up really great expertise and literally hundreds of people if I needed it," he said.
But while scaling is possible for software development in China, India may retain the advantage when those projects require several hundred people, said Rehkopf. Established Indian outsourcers like Infosys Technologies dwarf their Chinese counterparts.
Huge populations give China and India unmatched scaling potential. But many other countries are grabbing from the outsourcing market pie as well, said Rehkopf. Language needs might draw a Spanish or Portuguese company to South America, for instance, or another company to eastern Europe rather than Asia, he said.
Hopes of avoiding geopolitical risk have also pushed multinationals to outsource to multiple destinations. In India's case, the terrorist attacks in Mumbai last November may have pushed companies to consider moving their outsourcing, said Longwood, the Gartner analyst.
One advantage for China is that many companies see outsourcing as a step toward cracking the huge local market, said Brian Keane, CEO of Dextrys, the U.S.-based outsourcing vendor that Hanover works with in China.
Many of the vendor's customers are either overexposed to India or hope to sell their services in China, said Keane.
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