Monday, November 29, 2004

Destination Brandalore — but how long?

Destination Brandalore — but how long?
Times of India

Bangalore: Shanti Ramaswamy came here two years ago. Lured by an MNC call centre, all set to feel the throbbing pulse of the city and later return home to Chennai. Changed her mind, settled here and now calls this city her home. Shekar Gowdar’s California-based IT firm, EBAS, sent him to Bangalore to check out if Indian operations were possible and later return to the US. He did not return. Moved his wife and kids here and now heads the expanding Indian operations. Franco runs a granite business in Italy, He came to India to source granite.Now he has bought a house in HSR Layout, plans to settle down here with his Spanish wife and twoyear old daughter. These are snapshots of people arriving in the 24/7 silicon capital, enticed by its siren-like vibrancy and opportunities. Unwilling to leave.

Million-dollar question

What is it that draws people here despite the constant litany of pathetic roads, sky rocketing real estate, shockingly high wages and frustratingly high attrition? Says Vivek Paul, CEO, Wipro, “Bangalore remains a beacon since the concentration of technical talent in Bangalore is like no where else in India or perhaps even in the world, and the climate continues to make it an attractive city for expatriates.” It has become quite fashionable for foreign CEOs at cocktail party chatter to say, “Last week I was in Beijing and Bangalore”, with the mandatory add-on “Don’t know how they can get away with such high hotel prices”.

Unrivalled brand

Home to over 300 MNCs among the 1200-odd IT companies, generating about $4 billion of software exports (about 30% of India’s IT exports), Bangalore is way ahead of other cities in the country. As the world’s fourth largest technology hub, it employs about 225,000 techies, including 70,000 people in the BPO/ITES segment.

An unrivalled brand Bangalore has become. Not ready yet to relinquish its hold on IT. “Roads and infrastructure can be built within 3-4 years but you have a brand here that has taken about 14 years to build. No city in India has been able to do that,” Kiran Karnik, Nasscom president, says. More important, the tech hub of India is tenaciously backed up by world leaders. Think of any IT company and you will find its logo on gleaming structures of tinted glass and hidden concrete.

Whether it is an Intel or Texas Instruments, Microsoft or HP, IBM or Sun, Motorola or Philips, Oracle or SAP, Cisco or Nortel, the Bangalore stamp is immutably plastered in the DNA of their products or services.

“When I was doing my MBA in Texas University, my first class on macroeconomics was on how co-location was the best strategy for success. I found that very hard to believe but it was true. There would be four gas stations at an intersection or three to four fast food joints like McDonalds, Pizza Hut, Burger King or a designer jewellery cluster - all in one area. The reason - people would converge here, either fill the gas, grab a bite, or buy jewellery - in a short time and move on. Now, you see the same thing happening here in Bangalore. You get everything a tech company needs - you just have to come here and get your business needs filled, no waiting and you move on with your plans,” explains Bobby Mitra, managing director, Texas Instruments, India, one of the first IT MNCs to set up operations about 20 years back.

Talented manpower

Unquestionably, Bangalore’s economy has taken off during the last few years due to the quality of its workforce which has the right mix of skills and capabilities to provide world class products and services Says Shankarlinge Gowda, Karnataka IT Secretary, “Every year 30,000-35,000 engineers graduate in Karnataka. Moreover, we are also focused on quality and have set up an IT education standards board which decides the curriculum and sets it to industry standards.”

Unbeatable weather

And, the weather is equally seductive. No other city in India can beat the weather here. “When I came here with my family, we used to complain about the narrow roads but that used to pale into significance when we used to go back to Delhi’s extreme climate when the kids had holidays in summer and winter. We, along with the kids have become addicted to this weather,” says Kingshuk, a software engineer, originally from Delhi.

High-end tech charisma

But, when it comes to high end tech work, this is the place to be. For instance, last year, Intel’s Bangalore R&D centre filed 63 patents, and has emerged as the most important research base beating Israel and Malaysia. Similarly GE’s R&D center has 20% of its resources on 5-to-10-year fundamental research in areas such as nanotechnology, hydrogen energy, photonics, and advanced propulsion. TI and IBM too have one of the highest number of patents being filed from here. In the past 6-8 months this year, over 100 companies have set up shop here. Says B.V. Naidu, Software Technology Parks of India, Bangalore (STPI- B) director, “Majority are foreign equity companies while the rest are BPOs. Many are still coming.”

Sheen might fade

But one cannot merely wish the infrastructure woes away. Cautions Sridhar Mitta, co-founder, e4e Labs, a VC company, “ There is something called a delay factor. Most of the companies who are coming here are executing plans drawn up 12-18 months ago. New ones are going to look elsewhere. Undoubtedly, Bangalore’s brand has been built over the past decade, but over the last year or two it has begun to decay. However, it will take a long period of neglect for it to fade away. The tech hub Bangalore has definitely achieved a certain recognition. Visiting global CEOs do not see the infrastructure problems in their short visits, and so generally feel pretty good.

“However, no brand lasts forever without the requisite investment and there are always scrappier contenders wanting to usurp that position. As things stand today, Bangalore is depleting, not building upon, the capital it had already created,” warns Wipro’s Paul.

But hope lingers on

Rama Rao C, who heads Capgemini, a $6-billion provider of consulting and outsourcing services, which recently set up its development centre in Bangalore has the last word, “Some of our global customers told us that for offshore projects, it would have to be Bangalore.” And, for those like Philips, Texas Instruments and others who have invested heavily, there is no other place to expand. “We have recently increased our investment and we feel that this is the place for our kind of development work,” says Bob Hoekstra, CEO, Philips Software.

No wonder then the Shantis, Shekars and Francos are congregating to this city that never gives up on IT.


1700 IT firms 300 MNCs 2.25 lakh techies 75,000 call centre agents 92 companies set up in last 2 months


Real cosmopolitan flavour Great expats infrastructure Nail-biting shopping experience Hateful graffiti missing on walls Extensive foreign language skills Distinctive pub culture Hotels go houseful but service apartments make up for it.


Kerala CM, Oommen Chandy with his entourage came to Bangalore to meet industry players like Infosys, Wipro, Intel, Accenture and others, suggesting new investment in the God’s own country. Tamil Nadu is always nipping at Banglore’s heels.The Jayalalithaa government has announced several fiscal incentives for IT companies and in the past few months many Bangalore-based companies have indicated their willingness to set up new businesses in capital Chennai. Hyderabad is perpetually in the race, vying with Bangalore – giving the IT capital a run for its brand, making sure that its ‘Cyberabad’ revolution quietly continues CMs from Punjab, West Bengal, Goa and Chhattisgarh too had come calling - urging the Bangalore IT community to invest in their states.


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