With the recent spurt of growth in the Chinese IT industry already poised to encroach on India's undisputed position atop the global offshoring dogpile, the latest developments in Bangalore are sure to be unwelcome news to Indian offshore outsourcers.

While unrest and terrorism have not been unknown in India over the past decades, to this point little of the disturbance has touched in Bangalore, the center of the Indian high-tech industry. Last week's bombings, allegedly by Muslim terrorists, did not appear to be targeted on the IT industry, but surely after the hue and cry from industry observers the terrorists will realize their opportunity to take on two birds with one stone: while striking directly at India, they may also inflict significant disruption on American interests.

I have long operated under the theory that terrorists are stupid, and that a great many obvious points of attack are available to them which have remained unexploited, not through our own laughable security efforts, but simply by dint of their own incompetence. So while you may point out that this is an opportunity that has been open to them for some time, I would counter by saying that they may simply have been too stupid to realize it, and now that the relationship has been made clear, IT operations in India are considerably more exposed than they were even two weeks ago.

This is something of a danger with any offshoring operation; there are necessarily many lines of communication which may be disrupted. The Chinese government's historical ability to quickly and efficiently squash any sort of domestic unrest, however distasteful it may be from a human rights standpoint, also gives it a considerable edge in security from the perspective of American businesses seeking to set up or make us of offshore resources.

Geo-political factors are considerable in enterprise decisions surrounding any sort of investment; I've even heard of hosting companies which avoid setting up operations in Canada for fear of some distant possibility of socialization taking over their operations. With such distant concerns taken very seriously, it would be no surprise if more immediate issues such as terrorism were rising to the forefront in corporate decisions over where to outsource IT operations globally.