Online retailer Amazon.com is to open a UK software development centre to extend the capabilities of its systems, contrary to the trend of outsourcing such operations offshore.

The move comes as analysts warn that some companies that outsource such software development may find they are in a weaker position to create competitive systems.

Amazon predicted the move will help it remain at the forefront of UK e-commerce. The centre, which will become operational in the second half of this year, will focus on developing new and innovative web site features, largely aimed at helping users find what they are looking for online.

Matt Round, managing director of the centre, said its staff would have an opportunity to shape the future of e-business. "E-commerce has much further to go. It would be naive to say that we have arrived," he said. "There are lots of ways that offline businesses do things better than we do."

The centre is also likely to develop new personalisation features, web services, and the use of mobile platforms.

Amazon's announcement comes as new research from analyst firm Forrester reveals that 38 percent of global firms with more than $500m in revenue are poised to move application development offshore.

However, Liz Barnett, research leader at analyst Forrester, argued, "Even if the ultimate result of choosing an innovative approach to software development includes the use of an offshore resource, in-house IT has to remain in the driver's seat of innovation."

Forrester also advised firms to encourage their developers to gain business skills as well as technical ones. It also argued that key roles such as those of enterprise architects, application security architects, database designers and integration architects, should not be outsourced.

Amazon is looking for about 40 staff with C++, Java and other skills.