
Small And Captive
But small firms can benefit from going captive, as well. CenterBeam is a venture-backed company in San Jose, Calif., that offers outsourced IT services to mid-sized businesses. Even now, CenterBeam as a whole employs only 170 people, smaller than most observers recommend for a captive center.
But when Kevin Francis came in as CEO in early 2003, he needed to cut costs. At the same time, he felt it was vital not to outsource technical support, since that was a primary way his company interacted with its customers and thus was important for the brand. He looked at sites in the U.S. and in India, but ultimately decided to locate in New Brunswick, Nova Scotia, though it was not as inexpensive as India. Francis did this for several reasons: He could save 35% to 40% on his overall site costs, he had access to English-speaking, technically talented workers, and he felt that cultural and time differences were manageable.