For brevity you can’t beat the following recap of software history:
Grizzled old hackers tell of going into insurance companies in the 1960s. The typical computer cost at least $500,000 and held data of great value. When Cromwell & Jeeves Insurance needed custom software, they didn’t say, “Maybe we can save a few centimes by hiring a team of guys in India.” They hired the best programmers they could find from MIT and didn’t balk at paying $10,000 for a week of hard work. Back in those days, $10,000 was enough to hire a manager for a whole year, a fact not lost on managers who found it increasingly irksome.
Managers control companies, and hence policies that irk managers tend to be curtailed. Nowadays, companies have large programming staffs earning, in real dollars, one-third of what good programmers earned in the 1960s. When even that seems excessive, work is contracted out to code factories in India. Balance has been restored. Managers are once again earning three to ten times what their technical staff earn. The only problem with this arrangement is …
This is from Philip Greenspun’s “Philip and Alex’s Guide to Web Publishing”, page 318. In case some background is required, read on.