Friday, April 27, 2007

As Bangalore falters, Hyderabad, Chennai, Pune vie to be tech Eden

FAVOURED DESTINATION - As Bangalore falters, Hyderabad, Chennai, Pune vie to be tech Eden
Other cities cash in as top IT firms, citing poor administration, say they have no expansion plans in Bangalore


I t’s official now. Bangalore, India’s tech capital, has fallen behind in the race to play host to the new offices be- ing set up by leading software and back-office services com- panies in India. Chennai, Hyderabad and Pune are the biggest gainers of such expansions.

Bangalore’s administration has been criticized by top managers of Infosys Technologies Ltd and Wipro Ltd, the second and third-largest tech vendors in India, respectively, for the city’s crowded roads, rising pollution levels and deteriorating infrastructure in the last five-six years.

Chennai leads the new crop of destinations in India, with the port-city expected to house more than 73,000 workers of the top three Indian information technology companies—Tata Consultancy Services Ltd, Infosys Technologies Ltd and Wipro Ltd—in the next three years, overtaking the number of employees these firms have in Bangalore.

The trio, which together have around 55,000 employees in Bangalore, do not have any expansion plans in the city.

Infosys’ 25,000-seater facility in Mahindra City on the outskirts of Chennai, which is slated to run at full capacity by 2010, would be the company’s largest office in India. About 3,500 Infoscions, as programmers at India’s second-largest tech company like to call themselves, already work at the office.

Similarly, TCS’ upcoming facility, which will be completed by the end of 2008, would have a capacity of 22,000 seats, according to Viswanathan, Ravi and vice-president head of Chennai operations, TCS. The first of TCS’ six buildings in a spe- cial economic zone complex will be completed by July or August, and will house 3,500. around TCS expects to “one complete building per quar- ter” over the next six quarters. TCS, businesslargest software India’s process out- and sourcing services firm, already has its strongest presence in Chennai, with about 16,500 employees, followed by Mum- bai with nearly 11,000, and Bangalore that has over 10,500. Infosys has about 6,500 peo- ple working in Chennai cur rently, says Sujeet Oommen, the regional manager for the company’s Chennai facilities. This includes 3,000 people in one facility at Shozhinganallur and 3,500 people in the work- -in-progress Mahindra City fa- cility, he said. When it reaches full capacity, it would overtake the company’s Bangalore facil- ity located in Electronic City, on the southern outskirts of the tech capital, which seats about 18,000. Infosys human resources director T.V. Mo handas Pai said Infosys was at- tracted to Chennai because it “has good talent, the environ- ment is conducive, and infra- structure is good”.

Hyderabad, At TCS announced plans last week to spend Rs400 crore to set up a 15,000-seat facility in an upcoming special eco nomic zone promoted by the state government, growing the company’s workers in the city more than five times.

The company’s chief finan cial officer S. Mahalingam says the new office will be ready in three phases in 2009, 2011 and 2013, adding 3,000, 5,000 and 7,000 workers more at the completion of eachnew offices phase. The location of TCS’ are driven by “availability of quality talent pool and sound infrastructure”, Mahalingam said. He expects Chennai, Mumbai and Hyderabad to have 25,000 workers each in the next few years.

Pune has attracted Infosys and Wipro as well. Infosys will not reveal details but its latest financial results reveal a ‘work in progress’ of a 14,400-seater in this western industrial city.

Earlier this month, Wipro chairman Azim Premji an nounced a new facility in Pune, its second in the city, at a cost of Rs400 crore. The com pany plans to nearly triple its workforce in the city to over 17,000 by 2008-09. Premji has been among vocal critics of the Karnataka government for ig noring Bangalore’s woes.

In anticipation of further ex pansion of tech firms in the new upcoming tech cities, prices of commercial space have shot up. Lease and pur chase costs in Chennai, for in stance, is more expensive than in Bangalore, said Ramesh Nair, south India head of mar kets at realty consultant Jones Lang Lasalle.

Recent administrative im provements could help stem the tide at Bangalore. New commercial land has been ac quired and released by the Bangalore authorities within city limits attracting commer cial developers.

“If the Tamil Nadu govern ment can release some land here, then Chennai could also bring prices under control,” Nair added.


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