The Nearshore model for the delivery of IT services has gone through some remarkable technological, demographic, and macro-economic changes that have taken the industry far beyond labor arbitrage. One of the best examples of this shift is PeerIslands, an IT consultancy which delivers cloud digital transformation (DX) services from the Cayman Islands.
“I saw an opportunity to rethink how a cloud services company could operate,” says Narayn Sridharan, CEO at PeerIslands. “I had formerly worked on cloud transformation with Cognizant, and saw how the big companies did it. Much of the piece work that relies on an algorithmic approach to app development is now automated. This has opened up an opportunity to hire the best talent and allow them to adopt a heuristic approach to delivering solutions.”
Sridharan was first introduced to the Cayman Islands in 2012, when an India-based speciality hospital expanded to the Caymans. The hospital wanted to enhance their processes with path breaking technology in intensive care units. During the process, Sridharan met with investors who were confident the Cayman Islands was a viable option for Nearshore delivery of IT services.
“The Cayman Islands is vying to become the Singapore or Hong King of the region. It’s a very desirable place to work.”
To staff his company, Sridharan has brought seasoned associates to the Cayman Islands from around the world. Most of these – about 75% – come from India, with another 20% from Latin American countries like Brazil, Colombia, and Argentina. The final 5% is rounded of with associates from the Cayman Islands, Canada and the US.
“We pay our talent a rate that might be equal to Dallas, Houston, or Washington, DC – essentially one level down from San Francisco or New York City. That’s basically what the cost of living is here, so that’s how we baseline our salaries.”
At over $85,000 a year, the Cayman Islands has the 8th highest per capita GDP in the world. However, while it is true that this not a low-cost jurisdiction, the GDP number is inflated by the Islands’ role as an offshore banking center. The jurisdiction is a self-governing British Overseas Territory with an active investment promotion agency, InvestCayman. Another organization, TechCayman, provides support services for incoming tech companies.
“The government has been very welcoming,” says Sridharan. “We get help with all the visas, and all the logistics of relocating to the Cayman Islands. The lack of income tax is also appealing to our employees.”
“Many of our employees are here with their families and are thinking of staying on. There are about 25 children here – from a few months to 7 or 8 years old. And some of our employees have brought their parents, too.” — Narayn Sridharan
At present, PeerIslands has 65 employees, with a planned increase to 75 by the end of April. At the end of the year, Sridharan expects that number to rise to over 100.
“We’ve been here for three years, and not many of our employees have gone home. They’re on open-ended visas that get renewed every year. Many of our employees are here with their families and are thinking of staying on. There are about 25 children here – from a few months to 7 or 8 years old. And some of our employees have brought their parents, too.”
Before PeerIslands got started in 2019, Sridharan spent a year and half developing the proof points that would translate into the company’s present business model, wherein it can charge a 10% – 20% premium over other cloud services companies. This is primarily due to the type of work – and the specific qualifications of the company’s employees.
“The newer cloud tools do two things,” he says. “They make it easier to develop software because the simpler aspects are automated. But these tools are also very complex to implement and involve completely new ways of programming. They require people who are willing to learn all the time.”
This is central to PeerIslands’ appeal to its employees, in that, according to Sridharan, 80% to 90% of the work is of great interest to the company’s developers. It’s a critical factor, given global wage inflation: developers in India that were making US$30,000 annually only a few years ago can now command up to US$60,000.
“We typically hire from multinational tech companies or some of the Indian unicorns, where salaries in the US$40,000-US$60,000 range are normal,” says Sridharan. “People are willing to relocate because the money is good, but it’s actually more important for them to be doing good work, and to be advancing their careers.”
A significant portion of PeerIslands work comes from its partnership with MongoDB, a global, publicly traded database company. PeerIslands, which was named MongoDB’s “Boutique System Integrator Partner of the Year” in August, 2021, works directly with MongoDB’s clients.
“Large tech companies have dozens of applications, and they want to transfer those to the cloud. Our customers are global organizations, usually in the US, with large IT groups. We play the role of trusted advisor, especially in the context of newer tools.”
This requires a mix of people who understand how older systems work, but who are also up to date on the latest technologies. With this in mind, for PeerIslands the central component – from a resourcing perspective – is that its employees be willing and able to acquire new skills.
“This is absolutely critical and can’t be overemphasized. We have employees with a wide range of experiences, but the most important thing is their ability to adapt and to acquire new skills.”
As a location for Nearshore investment, the Cayman Islands also has the advantage of economic and political stability, as well as proximity to the United States, with multiple daily flights.
However, for a company like PeerIslands, which mostly imports its skilled workforce, the Cayman Islands has the added advantage of delivering access to high quality education and healthcare in a safe environment, with a welcoming culture. This is a huge plus.
“The people we were working with here in the Cayman Islands were confident that this would be an attractive location, and we were happily, pleasantly surprised,” says Sridharan. “It has turned out very well, and we are now looking at making hires from Eastern Europe.”