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In-House Innovation: Page 5 of 6

In addition to building custom applications, in-house programmers stay busy fine-tuning the commercial enterprise-resource-planning applications used by their companies, integrating it all, and, more recently, introducing Web services to those software environments. When it comes to Web services, Microsoft's Rudder says development managers face a decision: whether to build the Web-services layer themselves or rely on commercial software vendors. Regardless of how they do it, Web services should eventually free software engineers from some of the grunt work and give them more time to spend on business processes.

Such advances are making development staffs at many U.S. companies more productive than ever. New graphical development environments such as Visual Studio .Net and Sun's forthcoming Rave tools also help by automating the way software is developed, creating lines of code with the click of a mouse. "Building applications without actually programming" is one of the hotbeds of activity in development organizations, Sun's Gosling says (see story, Tool Time: Features Boost Developers' Productivity).

But practitioners say there's plenty of room for improvement. "There's still a lot of manually intensive work that goes on in the development process," says AXA Financial's Wollin. Gosling says he encounters Emacs, a 25-year-old bare-bones coding tool, "a lot more than I think is reasonable."

The question of programmer productivity--and the cost of that work--is getting closer scrutiny with the increasing interest in offshore outsourcing. While new languages and tools keep raising the output of U.S. developers, the same products are available to engineers in India, Russia, and other overseas software centers, where upstart companies promise quality code at lower costs. Local developers do have some advantages in working for U.S. companies--day-to-day proximity to the business counts for a lot--but there's no escaping the fact that a growing number of CIOs look at offshore development as a way of lowering costs for at least some projects.

Where does that leave the large base of U.S. developers? For many, the skills required of them may change. Borland's Shelton says U.S. software engineers will have to manage more, develop less. "They're going to be coordinating and controlling quality and making sure requirements are fulfilled rather than writing lines of code," he says. "The lines of code are going to be written somewhere else."