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Where software is king: IT in India

• By David Chappell
• July 1, 2001

India's core advantage is well known: the country has an enormous pool of low-priced but talented and well-trained people. What's less well known is a more recent advantage: the rise of a pervasive IT culture. With the possible exception of cricket, software is what most excites Indians today. The cachet of working in technology in the Bay Area, the heart of the American software beast, doesn't come close to what it is in India.

It's impossible not to be impressed by how mainstream software development is in Indian culture. The Times of India, a major national daily newspaper, runs large ads on page three promoting training in C# and ASP.NET. Banners hang from lampposts in Mumbai (formerly Bombay) for courses in Java and J2EE. Hotel bookshops are full of serious technical and technology business books. IT is hip—everybody wants to be in software.

Even people on the bottom rung of India's economy are players. Stuck in a taxi during a Mumbai traffic jam, I was approached by a barefoot boy who tried to sell me a book. What was it? Bill Gates' latest, Business @ the Speed of Thought. While the contrast was striking—a book by the world's erstwhile richest man being hawked by one of the world's poorest—the seller's choice of product didn't surprise me at all.

InfoSys, India's largest publicly-held software company, has a campus in Bangalore, the heart of India's Silicon Valley. The complex is reminiscent of Microsoft's Redmond campus, right down to the numbered buildings and flocks of casually-dressed twenty-something developers. It's rainy and humid, too, although much hotter than Seattle. I had dinner with a founder of InfoSys who informed me that the company had hired more than 4,000 developers last year. The really remarkable thing about this was that these new hires were chosen from some 400,000 resumes the company had received that year. And these resumes weren't from unqualified people—all of them were engineers. True, they weren't all software engineers, but InfoSys puts new hires through a rigorous training program, anyway. India's universities don't (yet) have enough places for all the people who want to be software engineers, so those who don't get into the program often study other varieties of engineering instead. Yet for many of them, the ultimate goal is IT. Nothing else in the country has the attraction of software.

I spoke with some Indians who were worried that IT was sucking in all of the best and the brightest in their country today. "We need doctors, too," they said, "and lawyers and civil engineers." But there's no obvious reason why the lure of software should diminish anytime soon.

Many large organizations in North America and Europe have turned to India for help in completing development projects. Computers and software tools cost about the same in India as they do everywhere else, and doing offshore development means that a firm in North America or Europe will spend significantly more on telecommunications costs. The big savings is in people. An experienced developer in India might make a quarter of what an equivalent developer in America would be paid. Because salaries make up such a large percentage of development projects, Indian firms can present an impressive cost advantage.

Still, some parts of a software project must be done locally. Gathering requirements, for example, means talking with the people who will actually use the system being developed. Yet modern tools let people working in Boston automatically replicate their use cases to Bangalore. And because North America and India are on opposite sides of the world, development can take place around the clock. India even has more reliable electricity today than, say, northern California. Unlike most American firms, Bangalore companies tend to have their own generators—they're used to power outages.

Yet despite all of these advantages, many Indian developers I spoke with were scared. Their work comes largely from North America, and the bursting of the dot.com bubble, together with the American recession, has them worried about the future. I was told that in India B2B stands for "Back to Bangalore," reflecting the number of developers returning to India after the American dot.coms for which they worked folded. However, the main source of demand for new software has never been bubble-riding dot.coms, but instead large firms that need custom systems, the need for which will not go away. And Indian firms such as InfoSys have proven their ability to deliver these kinds of systems on time and within a very attractive budget.

The scarcest resource in the world today isn't gold or silver—it's competent software developers. Whatever temporary setbacks exist at the moment, India's future as a capital of IT looks bright. In a connected and competitive world, talented, trained, capable developers won't sit idle for long. And right now, India has a culture that's producing more of them than anywhere else.