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April 22, 2005

Off Coast software development

H1-B visa caps preventing you from shipping software engineers to the US? No problem. Just buy a cruise ship and park it close to a major US port and have your programmers work "near shore".

Sounds outlandish? Well, that's exactly what SeaCode, led by its fomer tanker-ship captain CEO David Cook, is planning to do three miles off the coast of Los Angeles.

From ADT (Application Development Trends) magazine (via .
By stationing the ship in international waters..SeaCode will be able to remain close to U.S. clients while picking and choosing IT talent from around the world—something that tightening H1B visa requirements have made difficult in the U.S.

Depending on your point of view, it may also allow them to pay less than the rate a team of U.S. developers would command...

During off hours, programming teams can partake of the ship’s recreational facilities or head for the lights of L.A. on a water taxi, since each worker will be required to have a U.S. tourist visa, Cook says.

At first blush, admits COO Roger Green, it sounds like they’re trying to avoid U.S. taxes, regulations and pay rates. Not so, he maintains. SeaCode will be a U.S. corporation, and the ship will fall under a number of state and federal regulations. Green, who has managed outsourcing projects before, says just 10 percent of every dollar spent will go to paying developers—most of whom will probably be non-U.S. citizens. Remaining expenses will overhead—for equipment and supplies, fuel and other costs—all purchased in the U.S., the three say.

For non-U.S. developers, “The take-home money [will be] the same as if someone was working as an H1B inside this country,” Cook says.

The company will use microwave and U.S. providers for phone and Internet access, thus addressing a common outsourcing concern: ownership of intellectual property. Under international law, Cook says, the first point of contact with land determines whose laws will apply. “One of reasons we’re doing things this way is so U.S law will apply.”..

The company has secured funding and is ready to launch once they sign on the first client, Green says.

UPDATE: A colleague suggested a new headline for this post: Sea++

Arun Natarajan is the Editor of TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.