2 2 I E E E S O F T W A R E M a r c h / A p r i l 2 0 0 1 0 7 4 0 - 7 4 5 9 / 0 1 / $ 1 0 . 0 0 �� 2 0 0 1 I E E E communication technologies, but this is not our focus. Rather, we examine tactics that go beyond communication technologies��� tactics aimed at reducing intensive collabo- ration, national and organizational cultural differences, and temporal distance. The phenomenon of global software development Only a decade ago, the number of enti- ties engaging in global software develop- ment was small���but this has rapidly changed. Today, 203 of the US Fortune 500 engage in offshore outsourcing.1 In a recent study, we found that within the largest US firms, the median ratio of IT work out- sourced���but consumed largely in the US��� is 6.5 percent.2 Meanwhile, in the much smaller Netherlands, about 250 Dutch companies of various sizes engage in some kind of offshore work.3 Upwards of 50 nations are currently par- ticipating���at least minimally���in collabo- rative software development internationally. In India, there are now 800 IT service firms competing for work globally.3 Many Ameri- can firms are in the process of a radical push to send their key software processes off- shore, and critical centers of software R&D are growing outside the traditional centers (such as the US)���in Ireland, Israel, Singa- pore, Finland, and many other nations. Fi- nally, the marketplace is responding to the in- creased demand for IT labor through the construction of new commercial mecha- nisms. IT business-to-business intermediaries, such as ITsquare.com and IT-radar.com, serve as exchanges between worldwide IT services vendors and small- and medium-size busi- nesses with IT needs. There are two critical, strategic reasons for moving to offshore software develop- Tactical Approaches for Alleviating Distance in Global Software Development Erran Carmel, American University Ritu Agarwal, University of Maryland The authors describe three tactical approaches to reducing intensive collaboration, national and organizational cultural differences, and temporal distance. T o overcome the problem of distance in global software develop- ment, various managers are experimenting and quickly adjusting their tactical approaches. We discuss some emerging approaches and explain their motivations from conceptual and practical per- spectives. The most intuitive approach for alleviating distance is to apply global software development