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News Updates - 26
March 2001 Hi, I'm in Bangalore (but I Dare not tell), New York Times A new kind of software company - New York Times Indian tech managers go west! - TIME The next big thing in Tech India - TIME Indians have set up companies worth $235b in the US - ET
BANGALORE - With frosted glass and funky amber lights playing off the turquoise walls, the offices of Customer Asset look more like a Santa Fe diner than a telephone call center in southern India. The cultural vertigo is complete when employees introduce themselves to a visitor. "Hi, my name is Susan Sanders, and I'm from Chicago," said C. R. Suman, 22, who is in fact a native of Bangalore and fields calls from customers of a telecommunications company in the United States. Ms. Suman's fluent English and broad vowels would pass muster in the stands at Wrigley Field. In case her callers ask personal questions, Ms. Suman has conjured up a fictional American life, with parents Bob and Ann, brother Mark and a made-up business degree from the University of Illinois. The point of this pretense is to convince Americans who dial toll- free numbers that the person on the other end of the line works right nearby - not 8,300 miles away, in a country where static-free calls used to be a novelty.Call centers are a booming business in India, as companies like General Electric and British Airways set up supermarket-size phone banks to handle a daily barrage of customer inquiries. The companies value India for its widespread use of English and low-cost labor. "India is on its way to being the back office for the world," said Shriram Ramdas, one of the founders of Bangalore Labs, which manages Web sites and other information networks for companies from a futuristic office in the International Tech Park on the outskirts of Bangalore. Doing back-office chores for advanced economies may not sound glamorous, especially for a nation that has created an $8 billion computer software industry virtually from scratch in the last decade. Unlike Taiwan or South Korea, which became known as low-cost producers of computer hardware, India made its name as an unparalleled customer service agent. While their American clients sleep, software writers churn out code, which is then beamed by satellite to the United States. Call centers are only the low end of a much larger industry of Indian software developers, transcribers, accountants, Web site designers and animation artists who work on projects for foreign companies from Indian offices. But by 2008, such assignments will generate 800,000 new jobs and $17 billion in revenue for India, according to the consultants McKinsey & Company. These services became so valuable that the founders of Infosys and Wipro were able to take their companies public at dot-com-like valuations. Mr. Murthy became a billionaire, and stock options showered unheard-of riches on even low-level employees. The man who serves tea to Mr. Murthy recently cashed in his options to buy a $100,000 house. His driver bought his own car. About 2.8 million people work in India's technology industry, even with a steady exodus of top software developers to Silicon Valley or suburban Boston. Yet the industry, despite its breakneck growth, still accounts for only 2 percent of India's total economic output of $450 billion. For technology to make a dent in the pervasive poverty of this country, Mr. Murthy contends, it must account for 10 percent of India's gross domestic product. At current growth rates, India will have a $900 billion economy in 2010; technology would then have to be a $90 billion industry. "We need to broaden the base of technology in India," Mr. Murthy said. "This new business will be very valuable as a way to generate jobs for people who are not as skilled as software programmers." Jobs in call centers are coveted in Bangalore. While the salaries are hardly lucrative by technology industry standards - anywhere from $1,600 to $2,100 a year - they beat those for most clerical positions. "In the U.S., these jobs are taken by housewives or kids who haven't decided what they want to do with their lives," said K. Ghanesh, 39, the founder of Customer Asset. "Here, they are career jobs for college graduates."The back-office business may help cushion India from the economic slowdown in the United States. As companies cut their spending on new computer systems, Indian software producers are likely to feel the pinch. But routine work, like processing insurance claims or settling credit card bills, goes on no matter what the economic climate. Indeed, as companies look for ways to cut costs, more of them may send such work to India, where wages often run half those in the United States. In the last two years, India has installed reliable high-capacity telephone lines in most of its major cities. That makes it possible for people in this country to communicate with customers in the United States, by phone or over the Internet, with no discernible difference from a calling center in Nebraska. The improved telephone network has essentially erased the advantage of other countries that offer back-office services - notably Ireland, one of the growth leaders of the expensive new Europe.India's greatest strength in this business may prove to be its ability to adapt, chameleon-like, to its customers. For a decade, Infosys, Wipro and others have run development centers in the United States to reduce the anxiety of American companies in dealing with foreigners. In recent years, the best engineers and programmers left India for the United States. But as India's industry has matured, émigrés are returning home to apply the lessons of the American market in local companies. In some cases, they bring home the culture as well. At Customer Asset and other call centers, Indian trainers who have lived in the United States drill new employees in phonetics, American pop culture and colloquialisms. And what happens if a caller asks too many questions? "When the conversation goes too deeply into Chicago," Ms. Suman said, "you just ask politely, `Can we get back to business?' " Top of the page
BANGALORE - At a time when the term start-up evokes images of crashing stock prices and collapsing business plans - here as much as in the United States - Ashok Soota, 58 might not seem to be a man to watch. It would not be the first time that America's misery is India's opportunity. Ashok Soota, the ex-vice chairman of Wipro, recently started his own software consulting firm, noted that India's high-technology industry was born in 1991, a recession year, when American companies first looked overseas for skilled, but cheap, programmers to update their computer systems. "This slowdown will force us to explore new markets," Mr. Soota said.But most of the excitement stems from Mind Tree's ambition: Mr. Soota wants his new company to leap several links up the technology food chain and graduate into the more advanced, lucrative realms of the technology industry. Rather than supply programmers for the humdrum work of writing routine software code, he wants to design and build sophisticated computer networks for customers.From the start, it behaved differently from a typical Indian company. First, the founders (Soota and the other Wipro refugee, Subroto Bagchi) pledged to donate 3 percent of Mind Tree's after-tax profits to primary education. The company's initial donation went to a center in Bangalore for children with cerebral palsy. The company logo, a stylized tree, was designed by the children, and their artwork adorns the walls throughout the headquarters, which are two glass boxes in a clamorous residential neighborhood." We will attract a certain kind of employee, which in turn will attract a certain kind of customer," Soota said. So far, Mind Tree has won assignments from Lucent Technologies, Avis and BP Amoco. The company is designing a Web-based reservations system for Avis, a unit of Cendant. It is also advising Harvard University on ways to promote sports events on the Internet. In addition to e-commerce projects, Mind Tree advises equipment makers like Cisco Systems, Alcatel and Fujitsu on network management issues. To be close to its mostly American clientele, it has built a development center in Somerville, N.J., and a branch office in Santa Clara, Calif."We're not building a small company," said Mr. Bagchi, 44, "We've built large successful companies for other people. We're comfortable with growth." So far, Mind Tree has hired 437 employees. It plans to add 1,000 more in the next year. The company has a five-year revenue target of $231 million. Yet Mr. Soota said he would not pursue a stock offering for three years. He also wants to have 100 clients before going public. But, his philosophical side showing, Mr. Soota sees a lesson in starting his company in such an unforgiving climate. "It's a good reminder for India's I.T. industry not to take what we have for granted, or become too greedy," he said. Top of the pageGo West! India's tech managers are moving to where the
action is: the US Within the next few weeks, Subroto Bagchi, chief operating officer of MindTree Consulting, will relocate from the software consultancy's Bangalore headquarters to its operations in New Jersey. The beginnings of this trend started with Wipro: the company hired and then based the CEO of Wipro Technologies, Vivek Paul, in Santa Clara, Silicon Valley. Now, companies here are blurring the line between India and the United States further. Mr. Ramdas of Bangalore Labs plans to relocate to Northern California so he can live among his customers. "We see ourselves as a next-generation company that is neither Indian nor American," Mr. Bagchi said.At the same time as Bagchi, Ajit Balakrishnan, CEO of India's best-known dotcom, Rediff.com, is making a similar move to the Valley. "What we're seeing is the first signs of a corridor being built between India and Silicon Valley," he says. Balakrishnan sees the importance of being where the action is. He has been able to tie up with the same company that is developing tools for Yahoo. "How else would I be able to achieve that?" he says. Rediff's plans are to break even in the next few months - and the revenues will flow from the U.S. market. For now, having top management move to where the markets are seems to be only the beginning of a trend. It won't be long however before most Indian companies will be pushed into it. It will be a survival issue, rather than a mere management decision. Top of the pageThe
Next Big Thing - The race to develop local language content on the
Internet is on One of India's most enduring pastimes, chewing paan, has been immortalized on the web. Visit Muchhad's paan shop (paan.com) and you can order the Indian delicacy by e-mail, or you can help keep Mumbai clean by "Playing the Muchhad Game" in your Internet browser. Soon the Internet in India will no longer be the sole terrain of the English-educated urban yuppie.Earlier this month, Network Solutions announced that they would provide domain names in local Indian languages. This means websites in most of India's official languages: Hindi, Tamil, Kannada, Telugu, Gujarati, Malayalam, Oriya and Bengali. But local domain names are only the beginning. It must be quickly followed by standards for local language keyboards, as well as localized content in a variety of languages. Not that it is easy to cater to a population of one billion Indians speaking a bewildering array of languages and dialects. But some companies have already started developing Indian language software; Indore-based Webdunia is billed as the world's first Hindi portal. And the government-run C-DAC (Center for Development of Advanced Computing) provided the language software used during the recent national census. India already has an unparalleled success story in creating localized content - the cable television industry - and the Internet industry should take cue from it. Today, the country's cable television operators boast 40 million users. India will have a projected 50 million Internet users by 2003, some eight times more than today's six million users. Of these 50 million, at least half will be non-English speakers. The local language Internet market is going to be India's Next Big Thing. Top of the pageIndians
have set up $235 billion worth companies in US: Report WASHINGTON - A new report now states that Indian immigrants have been credited with establishing companies in the US that account for $235 billion in market value. The CED (Committee for Economic Development) report, formulated by a group of over 220 US business leaders and educationists, says that some 32 per cent of Silicon Valley’s science and engineering workforce is foreignborn, the vast majority of which is either Indian or Chinese. Indian and Chinese engineers run one-quarter of all Silicon Valley high-tech business. In 1998, these firms employed 58,282 workers, comprising 14 per cent of the technology workforce. They raked in over $16 billion in total sales, says the CED report.In this context, it refers to the Valley’s two Indian groups: Silicon Valley Indian Professionals Association and The Indus Entrepreneurs. These organisations were created "as a means of bringing Indian immigrants together for social as well as business reasons." Once established in the US, these highly skilled immigrants often lend their knowledge and success to their kin. Top of the page |
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