Software firms also outsourcing work to foreign programmers.

SOFTWARE FIRMS ALSO OUTSOURCING WORK TO FOREIGN PROGRAMMERS

The software share of world information technology (IT) expenditures is expected to grow from today's 14 percent, to about 30 percent by the end of the decade. During the same period, the total IT market is expected to grow from

The expected doubling of demand for leading-edge software has put excruciating pressure on US software firms to speed up production -- both in the United States and through "outsourcing" abroad.

Microsoft Corp. is developing software in India, Lotus Development Corp. has programmers in South Korea, Apple Computer favors Ireland -- all are finding foreign software development labor to be cheaper, more attuned to foreign market needs, and less subject to tariffs. As a result, foreign workers are now doing everything from simple data entry to mainframe software development.

According to Robert Ackerman of InfoShare Inc. in San Francisco, foreign countries that will be the big suppliers of software development manpower are India, Malaysia, Singapore, Philippines, Taiwan, Poland, Czechoslovakia, Israel, Ireland, New Zealand, and several of the former Soviet Union's now independent republics such as Russia, Ukraine, Byelorussia and Kazakhstan.

But there are many pitfalls. Contracting software projects overseas is no guarantee that costs will remain low and profits high, at least not initially. According to Tom Breen, CEO of InstaPlan Inc. of Mill Valley, Calif., his company's attempt to set up shop in English-speaking India failed because of the difficulties of project management over great distances.

Indian officials say the failure is not automatic and stress that it boils down to choosing the right person for the right job. And many other software firms have set up in India and other English-speaking countries like Ireland and Scotland, where they plan to take advantage of Western Europe's economic integration in 1992 by having production close at hand.

Other US software makers are setting up in non-English speaking countries like Taiwan and China And US firms are not the only ones doing it. Mitsubishi International Corp. of Japan has a partner in Hungary, which is considered to have Eastern Europe's most computer literate society.