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Can we Re-shore our IT services? – with Robert Douglas


We’re talking about reshoring, not just of manufacturing operations, but something that often goes unmentioned, the movement of critical tech infrastructure, skills, and knowledge to other countries. Maybe there are some types of software, hardware, and people tasks that ought NOT to be shipped overseas? Find out who the Top 10 countries soaking up IT and business services are formerly done “in-house” in 2021. And we disclose the weakest link in your organization’s IT security program and steps to fix it for good.

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Show Notes

EPISODE TITLE: Can we Re-shore our IT services? – with Robert Douglas


This week we interview Robert Douglas, of PlanetMagpie IT Services, 100% Made in the USA. We explore how some companies are abusing the H1B visa system and what the US government is doing to change it. But the larger question is, have we done to our domestic tech sector what we did to our domestic manufacturing secotr…send it overseas for the sake of a larger profit margin. Robert enlightens us on the down-side risk of this for your company and the nation.  

About our Guest Robert Douglas: 

Robert Douglas is the founder and President of Planet Magpie IT Services, and a veteran IT professional, having started two successful consulting companies in his 35-year IT career. He’s consulted for major IT players like Microsoft, SkyTel, Digital Equipment Corp. (DEC), NetCom Online, Tessera, and AOL. His client list also includes companies like Malwarebytes, Analog Devices, the North Texas Commission, Ghirardelli, Demandforce, Boysen Aerospace, Mbroh Engineering, Betterworks, and Urban Remedy.

Robert is that rare IT expert with proven expertise in all aspects of Information Technology – IT consulting, SOX compliance, network architecture, cybersecurity, programming/web development, IT support, and cloud services. Robert is published and/or quoted in: the New York Times, Fox News, CNN Money, Fast Company, ZDNet, InformationWeek, Constructor Magazine, The San Jose Business Journal, San Francisco Business Times, Cisco IQ Magazine, DM Review, the Economic War Room, and national podcasts.

Link to Planet Magpie IT’s homepage:

Notes from the Show:

More Information on the H1B Visa and the Abuse of the Program:

How the H1B Visa Program has been Abused – CBS News (2017)

Lawsuit Seeks to Halt H1B Visa Program, Jul 28, 2021

H1B Visa Program Update 2022


Episode 4 – Robert Douglas – Can We Reshore Our IT Services?

Mitch Kennedy 0:27
Hello, and welcome to another episode of the Factory of the podcast. I’m Mitch Kennedy, co-founder of the Factory of the and with me today is Robert Douglas, President of Planet Magpie IT Services, with locations in both Texas and California. Hi, Robert. How are you?
[00:00:00] Mitch: Thank you so much for spontaneously agreeing to. Do this interview for a factory of the
[00:00:06] Mitch: I did see some things that I really liked on your website. And I just thought I’d call and see if it’s possible for us to could talk for a while.
[00:00:13] Robert: I’ve been doing manufacturing for the first 15 years of my career was in manufacturing.
[00:00:18] Robert: Manufacturing and you name it. But back then I was writing API APIs to, paper machines or aluminum, extrusion machines, stuff like
[00:00:28] Robert: I like that.
[00:00:29] Robert: So I know manufacturing. I’ve been doing this for over 30 years, so yeah. Okay, then you come up with, I have an answer and we’ve worked with some guys out in Chicago on the Reshoring Initiative for manufacturing.
[00:00:43] Robert: And we tried to get them interested in reassuring IT as well. But they invited a bunch of companies that arrived with big IT firms and they weren’t interested. They liked their,
[00:00:54] Mitch: what can I do, right?
[00:00:56] Mitch: I did read You’re a handout on reshoring it. I read through that.
[00:01:01] Mitch: I thought was funny. And I went and looked at the book, sold out, and read through some of the people’s comments on that too. So it was really interesting. I really, I see it because I have peers, who are friends of mine, who are in it, but I didn’t have the sense of the depth.
[00:01:17] Robert: We live and breathe it.
[00:01:18] Robert: And the sob stories we get from people whose jobs are being taken over. I don’t know how we. Being the company, everybody emails, but they send us emails and say, send us a hundred, reshare your it bumper stickers. I’m going to stick them on every car in the lot. I lost my job today after re-training a guy from India to take over my job.
[00:01:40] Robert: And they’re just there.
[00:01:40] Mitch: Of course. So if we could start with how you got started you’d mentioned earlier that you were in manufacturing, so however you want to start your origin story, I like to give people a sense of the background of,
[00:01:54] Robert: so it’s a, it’s a very convoluted story, right?
[00:01:57] Robert: Cause you know, I went to college just like most people and. Took whatever job I could get. Cause it’s like 1983. And so back then, it was all about how much experience you had. So I took a nighttime operator’s position at Alcoa and they were at that place, they had basically paper manufactured.
[00:02:18] Robert: Or aluminum manufacturing and precision products, which was stuff that was produced for the space shuttle. And at that point, I’ve been in school. I was in Practice to be a programmer. I had all these high aspirations, and here I am, nighttime operators started at 11:00 pm at night, finished up at 7:00 AM.
[00:02:39] Robert: And so I’d stay over in the mornings and talk to the programmers who were working on big IBM mainframes and finally talked him into help, Start programming. And so I worked on this stuff, I’d go down on the floor. I had a good relationship with the union guys on the precision product side, and they’d tell me what they needed.
[00:03:01] Robert: And I’d go back to the programmers and say, they’re talking about this and that. And can I work on it? And they said, yeah, sure. Just work on it. You can stay over. Yeah. So I ended up working from 11:00 PM at night to three or four in the afternoon.
[00:03:17] Robert: And As time went on. Someone offered me a great opportunity. This one was for a paper mill and they wanted me to write API APIs between paper mills and IBM’s as 400, which was the newest deal at the point. So I wrote APIs to monitor how much moisture was in the slur and what the paper looked like at this drum.
[00:03:42] Robert: And An offer from the CEO to, optimize what we call detail records, which would be the same as collecting information off of say a paper machine, except it’s in the millions of records per night. And we went from 24 hours to one hour.
[00:04:02] Robert: And what was about 96, 97? The internet was billing by the minute, which is a call detail record. And none of them could bill effectively.
[00:04:13] Robert: Man, we’re building all this stuff for the big guys, but the smaller companies can’t afford it. So we developed a data center in Los Gatos. Califia. And I took everything we built for the big guys changed it around. So it was customer self-service and, log shipping and lived on our servers and all the smaller companies.
[00:04:36] Robert: So I hired web developers and IT guys, and we started this new plan, which was planet magpie, which did one company for small and mid-market business.
[00:04:51] Robert: And so basically we could develop your website. We could develop your e-commerce. We could you got viruses, we take care of that. You need a network built. We do that. It was one company. No, finger-pointing. And the product or the company itself really took off com companies that worked with us were excited about it.
[00:05:12] Robert: We still have companies that started with us over 21 years ago. They’re still our customers. So I think it was the right model.
[00:05:20] Mitch: I’m curious. Did you trend towards manufacturing because of your original start there? Or did you see a customer segment that was underserved or needed support that nobody else was doing?
[00:05:34] Robert: I’d say I have an affinity towards that. And I can understand the process and how to optimize it. And so my first jobs were in manufacturing and so it’s easy for me to bridge the gap into any type of manufacturing.
[00:05:51] Robert: Whereas, a lot of the new guys now they’ve never touched this kind of stuff. So there’s a lot of catch-ups right. Yeah. So it’s something I like really there’s something you’re building something and there’s a product being made. There’s an end result.
[00:06:06] Robert: And it’s very well, it’s interesting. I find manufacturing very interesting.
[00:06:11] Mitch: Yes. As do I, and as one of the reasons why I said. This platform is because you know it and you hear people in manufacturing say this, they say one of two things. They say it’s different every day. I never get bored and I get bored easily.
[00:06:27] Mitch: Or they’ll say something, like you look around everything, has been made by somebody and knowing how to do that is just really fun. And so we’re trying to try to express that enthusiasm. And intrigue two people coming up out of the schools and try to help people find a path because you can be in almost any profession and still be working in manufacturing.
[00:06:52] Mitch: And I think one of the things that, that I’ve tried to say on the podcast in the past is people think if you have a job or a career in manufacturing, you’re out of money. All-day long, but there are so many different segments. And so this is one of the reasons I wanted to talk to because a lot of the people I run into that are younger are like, oh, I’m going into it.
[00:07:13] Mitch: I’m going to have my own startup. And I’m going to be a billionaire, and I’m like okay, fine. Maybe you are, but you, I have other options too.
[00:07:20] Robert: Oh, I do too. I’ve, my focus has been I love manufacturing, right? We work on it. Types of products and companies, I’m a big supporter of American manufacturing. And I really want to see that come back. And I know over the past three or four years, we’ve made a big run at it.
[00:07:41] Robert: But it’s something I think it’s like a lie that’s been told to us since about 1980. Where, when I was in school, the story was, you know what, we’re going to shed manufacturing and we’re going to become the intellectual technology co you know, country of the world. And that was true for a while.
[00:08:04] Robert: And then we started shedding the IT jobs over to China and India. And. Now we have a huge gap between people like me who are CIO level and the next generation. So we have a 10-year gap where we don’t have people. And that they live in India and China and Poland and things like that. So we’ve stepped on our own feet.
[00:08:29] Mitch: Yes, I agree. I want to get into this because it’s one of the reasons you came to my attention is since we’re talking about manufacturing and the IT component of that and security and everything I was wondering if you could talk a little bit about just, that outsourced aspect that this has mentioned on your site, and I know you’ve worked with the reshoring Institute on,
[00:08:53] Robert: right? Yeah. We’ve really been working on the manufacturing piece of it may be a couple years ago. I’ve I flew to Chicago and they brought together a bunch of leading IP firms and me humble.
[00:09:05] Robert: So I don’t think of myself as leading, but for some reason they liked us and And so we had a big meeting and all those companies use
[00:09:14] Robert: H1B
[00:09:15] Mitch: And just for our listeners who may not know what an H1B Visa is if you could give us a nutshell on that.
[00:09:21] Robert: Yeah. So basically an H1B is a foreign employee who the company basically gets a law firm, a grant, or help them get grants for a number of employees who are non us and bring them across
[00:09:37] Mitch: like a Canadian.
[00:09:37] Robert: A Canadian can be an H1B, although those usually typically work Visas this is typically India, China. Poland places like that, the majority of them are from India and there’s a whole racket around it where the Indian companies will set up a shell company here in the US and they monopolize the H1B’s that are available for the year.
[00:10:04] Robert: And then they sell these guys off. For pennies on the dollar to undercut American IT firms. And the guys that whose English isn’t very good. It was a big language gap and they don’t work as hard as the American IT guys. I know my guys did it doesn’t matter what time of day or night somebody calls they’re on it.
[00:10:27] Robert: These guys are done at five and they paid. In their local currency and it goes to a bank often, India or China. We’re not even netting tax dollars on these people. So basically it’s a big loss for the US and then these guys take what they’ve learned and bring it back to India and start their own company, maybe doing tech support or whatever.
[00:10:52] Robert: So it’s really a big loss for it in the US. Can you, I don’t have any problem with the guys. I talked to lots of them all the time. It’s a, you know what the problem is, it hurts. Our technology here in the US it hurts our manufacturing. These guys, typically once they’re back in India, don’t work hands-on, our company and a few others like us, we’ll go onsite. We can see what’s the problem with the robot. Then we can fix it. A lot of that stuff, you can’t fix it unless you see it. So when you can’t depend on the end-user to give you all the information you need.
[00:11:29] Robert: So it’s a whole different way of thinking of things. It’s think locally, act globally. We think locally, we think locally.
[00:11:36] Mitch: Yeah. That’s one. And it’s one of the focuses of our site to where we’re certainly pro-trade but we are also pro regional.
[00:11:45] Mitch: Because regionalism decreases supply chain length and decreases his carbon footprint and amount of time people have to spend in a car and all these different things. So it has, yeah,
[00:11:56] Robert: what’s it cost to ship all that stuff from China, like just in carbon footprint. Oh,
[00:12:01] Mitch: it’s enormous. Yeah. It’s enormous. So
[00:12:04] Robert: for us, it’s very easy.
[00:12:06] Robert: We can get to our customers. We have an office in Dallas. We have an office in California and we can get to all our customers.
[00:12:13] Mitch: That’s important. That’s the FaceTime is important and I’m not talking about Apple iPhone. Can you just list maybe a few of the downsides, like I’m thinking, okay?
[00:12:23] Mitch: Manufacturing company, maybe it’s a multinational or maybe it’s. A regional company, that’s got multiple plants in the us and they say, oh, this sounds good. We can maybe save some money by outsourcing our IT to this big company that has all these H1B people. Can you go through a scenario that, that you either experienced in in-person or that, you can conceptualize why that wouldn’t work?
[00:12:54] Robert: Yeah. We’ve had some of these, right? There was a company in Santa Clara that we worked with and they outsource to a, basically an India. And they gave us a call because they just couldn’t take it anymore. The support they got from the Indian contract was terrible, extremely slow response times.
[00:13:13] Robert: They’re working on, in a different time zone. Do you put in a call and 12 hours later, you get a response? So basically it was the. I wouldn’t make it like the Indians were not concerned with the business itself, but. They live in a different country, they have different culture.
[00:13:32] Robert: And they weren’t really ignoring people’s support issues. It’s just that they weren’t awake yet. And some of the ways, I don’t know if you’ve ever talked with people from other countries the way they react to an issue from a US standpoint can be insulting. And it’s not that they’re trying to be that way.
[00:13:52] Robert: It’s just a different culture. From the contractor’s perspective, but they’ve got, they’re basically gobbling up clients, right? Cause it’s all about volume and they really don’t have the same value in the relationship that say a company here in the U S has where I have to, if there’s a problem, I have to go over and meet with the CEO.
[00:14:15] Robert: They don’t have that. So they don’t really have the same investment. They’re half a world away. So what do you do as a company that is relying on, offshore. Typically some of them stomach it because they think it’s cheaper. But in this case in Santa Clara, they came to us and said, Hey, what can do for us?
[00:14:34] Robert: And I said, I laid out what we would do as far as supporting them. And they said, we’re going to give you a. We’ll give it six months and if it doesn’t work out, then we’re coming back to off shore. They never went back. They’re still our customer. So the other thing you have to worry about is your data, right?
[00:14:53] Robert: So some of these companies, they’re manufacturing things that have intellectual property. Yes, absolutely. Now these guys have access to. And we’ve all seen in the news where people have basically gobbled up intellectual property and then sold it off to China and whoever else. So our guys, they’re all, they all work for me.
[00:15:14] Mitch: I wanted to talk a little bit about, if you have a cloud-based service, a software as a service program, say it’s like a CAD cam program or something that is.
[00:15:24] Mitch: Resident in the cloud. What kinds of things have you seen happen with those where it might be hosted in a country that is not the country? Like I will just play, say a plainly, not the U S it’s, if you’re say United technologies or something, you probably have everything locked down, but if you’re a fortune 1000 company or a fortune 3000 company, you don’t necessarily have that ability.
[00:15:49] Mitch: And so you’re using these software as a service platforms and this who knows where the servers are. I’ve tried to find them just because I’m curious about
[00:15:58] Robert: I have to figure it out. Back in 2000, We started a, what I called back then private business hosting. And it was what eventually became the cloud.
[00:16:10] Robert: They just, they couldn’t put in all the fail safe. They needed. So we built this private cloud and we started hosting companies, whole networks inside our data center that we built.
[00:16:22] Robert: And it’s fantastic, but it’s not Azure, it’s not, Google and it’s not AWS built. It’s built to that capacity in that. It’s a smaller footprint, but everything they have, we have. And then on top of it, there’s no ad-ons right. So if I host it say AWS and I really want to secure my environment then I have to buy a virtual left five and I got to buy virtual junipers and things like that.
[00:16:52] Robert: At our place, that’s all included. We keep it all maintained up to date. Three years go by and the servers rollout and we put new servers in. So it’s like an AWS on steroids in that. It’s not the same size, but security levels it’s way better.
[00:17:10] Robert: And you don’t have to guess at what you need. You don’t have to hire somebody to figure out what you need. So the way it looks on that kind of footprint right now is people purchase, say an AWS contract. Or a Google contract or an Azure contract. And you cannot find out from the provider where your.
[00:17:31] Robert: Resides. And typically then you have to hire someone like me to figure out how you secure that data. But it’s it’s like a pig in a poke, right? It’s fantastic right now. I don’t have to buy new hardware. I don’t have to go out and shut down servers and, buy new memory, things like that, but I don’t know where it lives. We’ve seen, and. We’ve seen reports in the news where, it’s apple employees that are not here in the us and, pictures of movie stars or whatever.
[00:18:06] Robert: So it can be as trivial as that down to things. We don’t hear about yeah. Maybe it was Intel and it was some intellectual property. They’re not going to talk about that right now.
[00:18:19] Mitch: Of course not. There’s a lot. We don’t hear about I’m. Sure.
[00:18:23] Robert: Yeah. The key thing is for me, if I were, I own my own data center, so my stuff lives in there.
[00:18:29] Robert: But if I was a company and I was going to look to the cloud, I’d be looking for a company in the U S who I can tell, tell me where my data lives and my applications. And they can assure me that the employees work in them that are all American citizens. Yeah. And that doesn’t, you could get a rogue American citizen.
[00:18:50] Robert: But for the most part, I haven’t seen that. Yeah.
[00:18:54] Mitch: And is there anything else that you, that we haven’t talked about that you think is an important issue for either manufacturing or the it professionals working in manufacturing?
[00:19:04] Robert: Yeah, so manufacturing. And it’s not typically, it’s not the manufacturer per se.
[00:19:10] Robert: So there’s lots of machines we use out on the floor that may have been written on a windows XP. The machine is a machine. The management system is on XP. The guys who develop those products that live on the manufacturing floor are not always fast about changing. And so we have all sorts of stuff.
[00:19:34] Robert: We have to run through to secure those machines and segregate them from say the corporate network. So the one thing I would love to see is people who are developing. Hardware or manufacturing products for manufacturers is that, they put a little money back into their product line and bring it up to, windows 10 or windows 12.
[00:20:00] Robert: Cause it does, it creates a significant risk for the manufacturer. And a lot of. Because we have to secure those devices from the. So that’s like a big area in manufacturing. That’s kinda been a, like a black hole. And it’s everywhere everyone we talk to, how can I make sure these XP devices don’t hurt our network.
[00:20:21] Mitch: Yeah. I you started out saying mentioning the AS 400. And I chuckled to myself because the last facility I was in, they still have one. It’s still running their production scheduling and everything. And we were talking about, going into sort of a industrial internet of things scenario like I don’t know, is it going to interface with our ASP 400?
[00:20:46] Robert: So I did a lot of work on a S 400. I’m surprised at how many I run into, they’re still there. They’re still running the back end of many manufacturing companies.
[00:20:57] Mitch: Which is, as a Testament, the Testament to the hardiness of the of the system,
[00:21:01] Robert: IBM builta really great platform.
[00:21:03] Robert: And it’s had a lifespan , you can’t surpass it. Yeah,
[00:21:07] Mitch: In internet life it’s practically ageless,
[00:21:12] Robert: right? Dinosaur.
[00:21:13] Mitch: This has been fascinating.
[00:21:15] Robert: Me a dinosaur.
[00:21:16] Mitch: Oh no. Maybe,
[00:21:17] Mitch: Maybe a wizard or something, someone with vast knowledge Robert, I thank you so much for taking time out of your day to talk to myself and our listeners affected the and we will put a transcript of this In what’s called the show notes on the podcast page, as well as the the two documents that you were generous enough to offer up to my listeners, which is one is about this whole H1B outsourcing issue.
[00:21:45] Mitch: And the other one was like the top six things you can do to protect your own it infrastructure. From ne’er do Wells. And I have to say also, I really like the dogs. Oh on your company’s website, you have the
[00:22:01] Robert: dog. That dog started the company. My employees laugh. And when people ask them what’s with the dog and they say she’s actually, she’s founded the company.
[00:22:15] Robert: It’s good. But give give the reshoring initiative a plug. I love those guys and what they.
[00:22:19] Mitch: We, yeah we love the reshoring Institute and they work hard. And so is the National Association Manufacturers. They also are allied with them. And so we’re there, they’re on our list of possible podcast guests as well.
[00:22:32] Robert: Alright Mitch, great talking to you. Yes.
[00:22:35] Mitch: Yes, likewise. And thank you again so much.

Tune in again next week for another episode and thanks for listening!

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