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Offshore economics


Someone recently posted that a lot of the problems with offshore work is title inflation.  In other words, you have this developing 3rd world country where everyone has a very small (grade school-ish) education as a child.  Then the jobs come, and people get the equivilant of a one or two semeter course (may one or two whole semesters) of technology courses without context.

So, of course, the hourly rate for the person is 'ridiculously expensive' ($30/hr after 3 kinds of markup and overhead), but you get some one who writes buggy, spagetti code that might not work at all.

Other thought:

Address some high-school computer science classes in the midwest.  Basic theme: "I will pay for some college and give you a job when you graduate.  It's like ROTC for Computer Science."

Here's the program:

Summer of Senior Year in high school: Take 2 courses at local community college (Paid for by Local Outsourcers Inc.)

Senior Year in high school: AP Computer Science, Calculus, 4 more classes at local community college.

Summer After Graduation: 2 more classes.

Immediate after that:  Begin to work 35 hours a week for
Local Outsourcers, Inc. at $15/hour.  Take night courses at local CC until associates is completed.

The courses would be focused technology courses

That's pretty darn good pay for no degree.  I think I could bill $30/hour for someone like that, plus they'd be local.

The only problem is that I probably couldn't be proud of the work they would produce.  The really brilliant kids would just go to MIT on scholarship anyway. :-)

But the point is that if you stack the decks equally, the economic case for offshore doesn't really work that well.

Or, at least, I think so.  Thoughts?

www.xndev.com (Formerly Matt H.)
Sunday, July 18, 2004

>So, of course, the hourly rate for
>the person is 'ridiculously expensive'

I Should have written 'ridiculously cheap.'  Oops.

www.xndev.com (Formerly Matt H.)
Sunday, July 18, 2004

Those who offshored software 5-10 years ago went about it with much more planning and patience, and it was much cheaper back then.  But nowadays the rush to send everything offshore is now driven by fads and the illusions of profits.

Sensible economic arguments and evidence won't sway the decision makers.  There are a dozen ways other than offshoring by which they could save more, but offshoring is the fad so that is what they will do.

T. Norman
Sunday, July 18, 2004

Agree with you Mr. Formerly (can't you keep youri old name how do I keep track of all this). Some companieds already do stuff like this and have no shortage of qualified people. It's also a good way to invest in one's community and tends to pay dividends even if the kids move on.

Dennis Atkins
Sunday, July 18, 2004

Matt H, you're correct. A substantial part of the offshoring push has been from what we would call dodgy businessmen.

I think the different culture and the large distances help to hide things that would be a lot more obvious if it was locals.

For example, if Joe the used car salesman hired five keen guys and gave them a 1-week ASP course, then hired them out as top developers, complete with phoney resumes, it would be easy for us to detect that Joe didn't know the types of things we would expect for someone from the background he claimed. With overseas offshorers, that's not so apparent.

Not all the offshorers fit this pattern of course.

.
Sunday, July 18, 2004

----"In other words, you have this developing 3rd world country where everyone has a very small (grade school-ish) education as a child.  Then the jobs come, and people get the equivilant of a one or two semeter course (may one or two whole semesters) of technology courses without context."----

Can you please let on which 3rd World country you are talking about.

Stephen Jones
Sunday, July 18, 2004

Formerly...

----"In other words, you have this developing 3rd world country where everyone has a very small (grade school-ish) education as a child. ---

If at all you are talking about "India"?
This is the wrong picture you are trying to project.

----Then the jobs come, and people get the equivilant of a one or two semeter course (may one or two whole semesters) of technology courses without context."----

Each Indian state has it's own engineering colleges called REC ( Regional Engineering Colleges) recognised by government. Apart from this we are having many private engineering colleges. They together are producing thousands of engineers in various fields including computers.

Do you want to say here people with "one or two semester technology courses" are getting the job instead of people with engineering degree!?

At present, the job market is such, that no one without engineering degree ( Computer engineering/ MCA - Master's in computer application) is able to get a job.

If at all you are not convinced,

Come on, give the entrance exam for REC ( Regional Engineering Colleges) and IIT's ( Indian Institute of Technology)!
You will know where you stand!?

Some people just can't stop...
Sunday, July 18, 2004

Formerly....

---So, of course, the hourly rate for the person is 'ridiculously cheap' ($30/hr after 3 kinds of markup and overhead)---

In this competitive environment, this is the competitive advantage we are having that is to be " CHEAP"
So what's wrong in that!
It has everything to do with our life-style and way of living.
We are the people who don't spend more, so we don't need more!
We are contended and more than happy with what we are getting/earning!

Will it not be better that you also learn to be contended and happy :-)

---but you get some one who writes buggy, spagetti code that might not work at all---
These sort of criticism will always be there, especially from people who have the fear of loosing job.

And even if you say so,
Tell me why pay you 50$/hr ( I don't know the exact rate) when same buggy, spagetti code is ready for 30$!?



 

Some people just can't stop...
Sunday, July 18, 2004

Many of you here have commented, complained and ranted about how bad and buggy, Indian (mostly) programmers' code is. Could you post the actual code, without revealing the business secrets, of course. It sure must be possible. Loops, CRUD code, generic stuff. Or may be abuse/misuse of tools.

Being an Indian programmer hoping to make it in India, if things are really that bad here, I'd be confident of making it, given my fellow programmers will not be able to sustain themselves locally. Or is somehow the proof of the pudding not in the eating over here in India, by your standards?

Just asking you indulge me in some self gratification.

.
Sunday, July 18, 2004

Do we really want to talk about the quality of the indian elementary education system? Because I have really been itching to bring it up given, that how unbelievably  shitty it is has made front page news all across the US today.

Are we ready for this?
Sunday, July 18, 2004

The difficulties with outsourcing to India, from what I've read, is not buggy code it's:


a.  Programmers don't have domain knowledge, so you have to spec out every little detail. Programming is about making decisions.  What color to make a button, where to put the button, what icon to put on it.  If you've spec'd out in incredible detai.... you've practically got a program.  The Mythical Man Month points out that only 20% of a project is actual coding. The rest is spec'ing (30%) testing (30%), etc.

b.  Programmers aren't creative problem solvers.
This probably relates to (a) above. If you're not comfortable with your domain knowledge (i.e., how a medical office works and will use your Medical Records software) then you won't creatively solve problems b/c you don't UNDERSTAND the problem.

BTW, the above are NOT just problems of the Indians. They're problems that MANY US programmers have.  That's why a lot of the leading software was created by people with domain knowledge (JASC Photo shop- amatuer programmer, Intuit , etc.).  (Not always an amatuer programmer, but always having DOMAIN KNOWLEDGE).

And, guess what? If you're from a foreign country, you're not going to have domain knowledge of how a Dr. use Electronic Medical records.

But, then, neither will a PhD in computer science that doesn't have a clue about how a Dr.'s office works.

Mr. Analogy
Sunday, July 18, 2004

"Tell me why pay you 50$/hr ( I don't know the exact rate) when same buggy, spagetti code is ready for 30$!?"

Let's say that's true. The advantage locally would be that the guy writing the crappy code is at least present locally to ask how it works and tell him to fix it and he will be able to because it is his code. With an overseas project, the people that wrote the code are no longer available and not even identifiable by the time problems have been identified and something needs to be fixed.

Have you got that?
Sunday, July 18, 2004

I think the problem with most big companies is they put their faith in paper rather than people, lets face it,  most companies can get just as much dones with 1/10th the  it staff (offshore or not) if they

a) eliminated all the unneccessary levels of management, and were selecting people on actual  ability rather than paper titles

b) consistently sought to reduce complexity in their it systems (i.e. mmmm LDAP looks good lets use that to replace our perfectly good oracle system, but have a seperate synch process anyway, type stuff)

c) limited software projects to things that would actually benefit the company (i.e. be very judicious about infrastructure projcts, buy the absolute minimum of software that requires 400/hr expert services consultants from the vendor...)

the way I see it, in Large corps L1/B1/Off shored can be very very sharp or dumb as a rock, but to a big company an ee/cs degree is all they see. And why should the vendors care whether the sharp person or the rock gets sent, they are not in the business of shipping code, they are in the business of finding people the CS/EE degrees with a pulse, and until american IT orgs get serious as customers, there is no hope that indian or american IT pimps will get serious as vendors.

Think of the analogy this way, it took us as customers to realize (after many years and some bloodshed) that american cars were inefecient, unsafe and not very reliable, and american cars have improved (still drive japanese though) after we started voting with our wallets. The same thing will happen in IT, all big outsourcers (HP,Insurance Companies...) are doing in outsourcing, is simply finding a cheaper way to throw away money. The problem is they are still throwing it away, and that will hurt them enough that they will have to change, and then real competition will be on (i.e. who really does it better rather than who's in)

the artist formerly known as prince
Sunday, July 18, 2004

Good point Mr. Analogy.  When you're that far away, your work doesn't immerse you in the domain knowledge and you don't have easy access to domain experts.

The same sort of difficulties would happen if US programmers wrote software to run an Indian bank or hospital.

T. Norman
Sunday, July 18, 2004

"The same sort of difficulties would happen if US programmers wrote software to run an Indian bank or hospital."

Most of the business software used in countries such as India is American made. Even when you exclude consumer software.

And how do there American companies operate. They build it once and then add in these internationalization modules (that are mostly about language).

<sarcasm>Customer needs do not come into play there I guess. Its only US customers who need to be understood by US software engineers. Everyone else can make do with internationalization add-ons. </sarcasm>

rs
Sunday, July 18, 2004

Are we ready for this?:

Do we really want to talk about the quality of the indian elementary education system?
Yes,I agree! India is in real bad shape. We are having not just one problem but many.... Hopefully things will improve for the better!

Now, should we talk about the crime rate, divorce rate, suicide rate of elderly people because no one really cared about them-not even their own children, school shoot-out's, moral conduct of your citizens including your president, moral conduct of your soldiers, lack of dicipline in your armed forces and above all your authority to go on WAR and kill other's ????

So do you want to say, you have no problems!!!!!
 

Some people just can't stop...
Sunday, July 18, 2004

The problem in India is that a large proportion of the school age population doesn't go to school, and in plenty of cases even if the parents wanted them to, the teachers don't go anyway.

This means that there is a vast difference between the education of the urban elite and the rural poor.

However, programmers do not come from the latter. As has been pointed out Indian programmers nearly always have a degree in the appropriate field.

Hell, even the call centre guys there are graduates, whereas in the States or UK they're much more likely to be graduates of the local pen.

Stephen Jones
Sunday, July 18, 2004

I insist.

Irrespective of the educational qualifications, notwithstanding socio-economic status, leaving aside political repercussions, what is the code that you have seen, worked with, torn your hair over, that makes you a) brand Indian programmers as inept, if not incompetent b) so sure of it that every 3rd post on JoS has a comment on it.

.
Sunday, July 18, 2004

"Most of the business software used in countries such as India is American made."

Including software custom-written to run in a specific Indian company? If Indian developers are so good and so cheap, why would an Indian company want to deal with the hassles and costs of sending the work to America?

T. Norman
Sunday, July 18, 2004

> Now, should we talk about the crime rate, divorce rate, suicide rate

Sure if you think it relevant to the matter of educational qualifications of developers. And then we can talk about wife burning, dowries, the caste system, cholera from dirty water supplies, dead bodies in the Ganges, cobra and tiger attacks, and villagers killing people who they suspect of being possesed monkey-men. :-)

Dennis Atkins
Sunday, July 18, 2004

I forget train bombings of hindus my muslims, ransaking of muslim villages by hindus, religious persecution of christians, and the nuclear bomb saber you're rattling at pakistan.

Dennis Atkins
Sunday, July 18, 2004

Maybe we can each make a list and put it on some sort of web site somewhere and people can vote on it! It might even make a fun strategy game like SimCivilization. I'l be the New World and you be India. We'll see which one of us develops space colonies on distant planets in time before we destroy our own planet!

Dennis Atkins
Sunday, July 18, 2004

Dear other dot, I and probably others wouldn't post code here because code is big and bulky and discussion of it here would be hopelessly irrelevant. I'm not interested in discussing minutiae of 10,000 lines of code.

A few things I've seen in Indian programmers' code is giant functions where horrible amounts of functionality is mashed into a single thing, as if the guy had never done much programming, and was just applying some recipe approach to his work.

Other examples are the so-called "God classes" approach to object orientation, where the programmer simply stuffs everything into a single class like an App class, possibly with a few irrelevant bits and pieces. Those characteristics mark an incompetent programmer.

I have seen this in some Indian programmers, but never in working Americans. An American who can't program well can be detected, but there's an infrastructure that lets 5-minute Indian programmers hide, and even actively works to hide them.

This doesn't apply to everyone or everything, of course.

.
Sunday, July 18, 2004

Dennis Atkins:

Original Poster wrote:
<<< you have this developing 3rd world country where everyone has a very small (grade school-ish) education as a child. >>>

Are we ready for this? wrote:
<<<Do we really want to talk about the quality of the indian elementary education system? Because I have really been itching to bring it up given, that how unbelievably shitty it is has made front page news all across the US today.>>>

Stephen Jones rightly pointed out! The indian programmers are all mostly from good schools and are having decent education.

Now what has the " primary school education of India " to do with their skills. If you try posting things which are not_ at_all related and is just to demean a country.

Then I have every right to do the same!
It is better before reacting, you see the context and reason why Idid so!

Some people just can't stop...
Monday, July 19, 2004

We are talking about education in india. If you think education has nothing to do with having a pool of programming talent to draw from, then you are nuts. Education is certainly directly related to this and your claims that it is not are specious.

Rather than addressing the legitimate points made, you decided to take a broad swipe at american social issues. Completely irrelevant to the matter at hand and the desperate tactic of someone who is inable to use reason or logic to defend their position - the refuge of a desparate man who has run out of ideas. My response regarding indian social issues was simply to point out the stupidity of your own response. But thank you for participating. Idiot.

Dennis Atkins
Monday, July 19, 2004

or perhaps we should address these issues.

> the crime rate

Crime is lower than it has been in many decades. The crimes remaining are simply because people are desparate because foreigners such as indians have taken their jobs.

> divorce rate

It is better to divorce your wife than to burn her, which is the custom in india, showing what animals they really are. Wife burnings are extremely uncommon in the US and the rate of domestic violence is much lower, very likely BECAUSE we have a high divorce rate rather than insist that people who are not a good match stay together until one sets the other on fire like the baboons in india do.

> suicide rate of elderly people because no one really cared about them-not even their own children

Do you have statistics on this alleged suicide rate by adults? IS it less than the rate of adults in india who starve to death because of neglect? I have heard that is a serious problem.

> school shoot-out's

Because of poisonous pharmaceuticals which do not work but were designed and then marketed by indians both working at pharmaceutical companies where there is a hotbed of dishonest indians who have come over here to commit their crimes.

> moral conduct of your citizens including your president

I fully support all actions of our president. A lot better than the endemic corruption and payola that exists in the sh*thole known as india.

> moral conduct of your soldiers

I fully support our armed services.

> lack of dicipline in your armed forces

Discipline and morale are both fine.

> and above all your authority to go on WAR and kill other's ????

A bunch of idiots want to attack us, we will track them down and kill them and their families and their pet dog. We will kill their neighbors, their friends and those who sympathize with them. We will keep killing until the people who attacked us and everyone who agreed with them have given up or dead.

If you disagree with this policy, then you are free to launch an attack against the US and see how we deal with you.

Thanks for participating and you go and have yourself a real special day.

Dennis Atkins
Monday, July 19, 2004

Actually that's a bit rich of the Indian guy to talk about suicides and armed forces.

India has an endemic of hundreds of farmers every year committing suicide because they've being screwed by greedy money lenders. These poor guys go and drink weed killer because they're getting charged 30 percent interest and so on.

Re the Indian Army, one of the divisions on the Kashmir line of control was recently found to have been routinely inflating their body counts by 100 to 200 percent, sanctioned up to very high levels.

.
Monday, July 19, 2004

I was not aware of those facts. Very interesting.

Dennis Atkins
Monday, July 19, 2004

Dennis and dot clearly show the superiority of the American education system when it comes to courses on irrelevant insults and gross stereotyping :)

Stephen Jones
Monday, July 19, 2004

I'm sorry Stephen, where was the modern free democracy launched?

Where was the transistor invented?

Which country was the first to send a man to the moon?

Deficient educational system my ass! Name someting invented recently by your beheading-happy friends in Saudi Arabia!

Dennis Atkins
Monday, July 19, 2004

----"where was the modern free democracy launched?"-----

Errr, Athens, Switzerland, Runnymeade?

I'm not attacking the US education system; it seems you Americans are capable of doing that all on your own.

The thread started because the original poster made a very stupid comment about India (though he didn't bother to name it). As far as I can tell, nothing you have posted here has anything to do with the original post, or the quality of offshored code.

Stephen Jones
Monday, July 19, 2004

Dennis Atkins,

-----the refuge of a desparate man who has run out of ideas------

hahahahaha....
I don't know, I am finding "you" more desperate. Just relax and take a deep breath!

----or perhaps we should address these issues.-----

So, you want to compare everything with India. Will that make wrong, right. I really pity you,Dennis!

-----A bunch of idiots want to attack us, we will track them down and kill them and their families and their pet dog. We will kill their neighbors, their friends and those who sympathize with them. We will keep killing until the people who attacked us and everyone who agreed with them have given up or dead.

If you disagree with this policy, then you are free to launch an attack against the US and see how we deal with you. "----------

I don't have to do it! And yes, if you represent the attitude of general American public then I would surely SYMPATHIZE with the attackers! I don't know, but I have seen many good, decent Americans here.

--------My response regarding indian social issues was simply to point out the stupidity of your own response. But thank you for participating. Idiot -------

Have you read my response! You seems to me a desperate young /old man.

Stephen Jones, I am used to these sort of comments and criticism.
I just feel "sorry" for "Dennis Atkins". You know there will always be the criticism of the people who lead constructive life. ;-) Unlike Dennis!


Some people just can't stop...
Monday, July 19, 2004

Anonymous Indian fellow, I'm glad you haven't seen 5 minutes of a US latenight talkshow. Because I'd get even more embarrassed than I already am. (We have problems just like you, and some of them are so frustrating.)

What can you say about offshoring? Seems to me the cardinal sin about programmers is treating them like some homogenous group. What causes bad code? People who're just in it for the money and don't care about their work. What lets it infect your codebase? Bad hiring and management practices.

An org that does not check its CVS once a blue moon is beneath contempt. I'm helping a friend with a project, and I'm in a different country, and you can bet he's looking at my modifications. Not because he doesn't trust me, but out of pure understandable curiosity.

This topic is just sheer intellectual masturbation. When do you use Java? When Ruby? When asm? When lisp? Fortran? When do you combine? Linux, Windows, QNX? Some are strategic, some are just kind of forced on you as a tactical choice. But many people take pride in using only one language. Like fad-driven companies, these guys are first against the wall when change comes. Same with orgs which take a mindless approach to offshoring.

Tayssir John Gabbour
Monday, July 19, 2004

Dennis wrote:
"A bunch of idiots want to attack us, we will track them down and kill them and their families and their pet dog. We will kill their neighbors, their friends and those who sympathize with them."

Who attacked us?  Radical Muslim fundamentalists from AFGANISTAN.

Who did we most recently invade? IRAQ.
And we performed that invasion using arab-speaking Special Forces that we pulled OUT of Afganistan.  So, by attacking IRAQ (which has no proven link to the terrorists) we LET THE AFGAN terrorists escape (into Pakistan?).

I don't thnk ANYONE opposes the invasion of Afaganistan. Your logic applies to THAT invasion. It does not apply to the costly, bloody invasion of Iraq.


-An American

Mr. Analogy
Monday, July 19, 2004

The other thing of course is that there weren't that many AL-Qaeeda members from Afghanistan. They were mainly Arab fighters sent there by the CIA to fight the Russians.

Stephen Jones
Monday, July 19, 2004

Stephen Jones: "The problem in India is that a large proportion of the school age population doesn't go to school, and in plenty of cases even if the parents wanted them to, the teachers don't go anyway."

Indeed, the large, uneducated, poor population is largely by design - the caste system. People are poor and uneducated and limited to menial (and often filthy) jobs because they were born to lower-caste people, and they will always be low-caste, and their children will be low-caste.

Keeps wages up for the higher-caste people, who only have to compete against a small fraction of the people they would have to if there were no caste discrimination.

Jon Hendry
Monday, July 19, 2004

----Indeed, the large, uneducated, poor population is largely by design - the caste system. People are poor and uneducated and limited to menial (and often filthy) jobs because they were born to lower-caste people, and they will always be low-caste, and their children will be low-caste.-----

1: In every college and technical institute through-out India we are having minimum 33% reservation for lower caste people.

2: In every Government job we are having reservation of minimum 33% for lower caste people.

Yes, this sort of reservation is limited to public sector not the private sector. And even you can't and shouldn't expect this from private sector.

3: You are having a wrong picture in mind that lower class people are only in rural India. Those who are well educated are well settled in large metro's.

4: A lower caste person has to pay half the fees which we have to pay in colleges and technical institutes.

5: A lower caste person if applies for a job, admission or any thing of this sort then he is charged half the application form fees. 

If the form is for Rs 900 for us then they are charged Rs 450 or even less.

So nothing happens in a day, it takes time.

So 33% of the programmers/engineers you fear are from lower caste. :-)

Here is the truth.....
Tuesday, July 20, 2004

And do not forget, pretty soon you 33% of programmers will be female as well! Oh! The term is "Minority", not "Lower Castes".

.
Tuesday, July 20, 2004

So how can you tell when people are lower caste in these situations? Is there a special card that they have to carry identifying their caste?

anon
Tuesday, July 20, 2004

Scheduled castes are registered.

When the British ruled India they even passed a law registering some castes as criminal. They held the wacky idea that if there were priestly castes and warrior castes and shoemaker sub-castes, then the Indians must also have murderer castes and burglar castes, so they gave the district commissioners the right to declare whole communities criminal!

The law was scrapped in 1952 but a lot of the stigma of this particularly benighted piece of colonialism is still around.

Stephen Jones
Tuesday, July 20, 2004

The stigma starts the day a person is registered as SC or lower caste and he/she carries this throughout his/her life.

I am personally against any sort of reservation. Whether it is for women, muslims, SC/ ST and other backward classes.

Reservation is and will always be a TOOL in politician hands that guarantees VOTES.

Poor of the poorest will still not be able to get the benifits of reservation, anyway!

I give you an example:

Christians are minority in India, mostly having poor backgrounds. I am a Hindu who studied in minority college ( Christian). I am having many christian friend ( from my college days) ,who really belonged to very poor families and now are at good job and earning like anything.

Muslims in India have the same Minority status. The constitution of india gives them right to open up there institutions.Why can't Muslims here in india do the same!? Why can't they open up institutions ( Schools/Colleges) that imparts real education!?

Point is people here have started expecting everything fron "Government" without themselves making effrots to uplift their community.

As far as I know Christians here have never asked for reservation, instead they are running many good schools and colleges which are benifiting their community as well as hindu's like me. ;-) 

It's my view..but you may differ
Wednesday, July 21, 2004

Thanks my view, that's food for thought.

My understanding is that there is some opening of islamic schools worldwide that are funded by the fabulously wealthy saudi religious grups, but that these schools don't focus so much on generalized education, but have just one course of study being religious studies, which perhaps doesn't have the same ability to lift the general community up economically. Also, of course, those schools do not allow non-believers to enroll, like you are saying the other schools do. Possibly having an integrated student body in schools such as yours promotes diversity and tolerance?

anon
Wednesday, July 21, 2004

Anon;

<<<Possibly having an integrated student body in schools such as yours promotes diversity and tolerance?>>>

Yes,it does. 

---First day, just after our winter holidays, we hindus use to run after Christian classmates...."Come on give us the Christmas Cake.This is not fair."

---Many of my Christian classmates were living in college hostels. I was living with my parents. Many a times ,I use to bring home_made_food for them .

But ofcourse, I never use to give them, the food, so easily. Guess what! If you made me run after you, now it's your turn!!!
Tit for Tat ;-) 

Yes Anon, when you study together, share meal together, share festivals together, copy the notes together and ofcourse cheat in the examination together  ;-) ...it promotes tolerance. 

And now, I can NEVER think of hurting the sentiments of people, just because he/she belongs to a different religion!

It's my view..but you may differ
Wednesday, July 21, 2004

"Sorry", for so many grammatical and punctuation errors in my previous post.

And above all anon, the teacher I admire and respect the most is also a Christian. He supported me at times when I had no one to consult and talk.

So ofcourse, I have to show a face to him! 

It's my view..but you may differ
Wednesday, July 21, 2004

if the indians are stealing the business from the west with schoolish degrees, what would they do when they get their university degrees?

Throwaway
Thursday, July 22, 2004

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