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Bangalore Tigers Kickoff


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October 02, 2006

Bangalore Tigers Kickoff

Steve Hamm

A little over a year ago, when I returned to BusinessWeek’s offices in New York from a reporting trip in India, I found a message on my voicemail from an editor at McGraw-Hill Books. She wanted to know if I would be interested in producing a book about the Indian tech industry. I had never written a non-fiction book before, but always figured I would some day. India was a hot topic, and I knew plenty about it because of my role as BusinessWeek’s software editor. So I began a journey that ended, symbolically, on Sept. 22 when a box containing 10 copies of my book, Bangalore Tiger, arrived at my office.

Bangalore Tiger is the story of the rise of the Indian tech industry. For simplicity and maximum impact, I decided tell the story through the microcosm of one company, Wipro Ltd. I could have chosen any of the top Indian software services companies, which include TCS, Infosys, and Wipro. They all have similar philosophies, strategies, and methods. I chose Wipro because it was most accessible.

The book is a mix of genres. It’s partly a guide for Western corporations who are considering outsourcing software writing, hardware engineering, call center operations, and the like to an Indian company. The book tells them what they’re in for. It’s also a management book. I detail the ideas, management techniques, and business processes that have allowed these companies to disrupt the $650 billion global tech services industry. Most broadly, it’s a human-interest story. Here’s a group of people in a formerly backwater country who have tapped the Internet and other technologies to level the playing field and change the rules of competition in one of the world’s most important industries. They have created a model for other entrepreneurs in other emerging economies.

Bangalore Tigers, the blog, is an effort to track and comment on the events and issues confronting the global tech services industry as the work of corporations is increasingly outsourced and distributed around the globe. I have been blogging for a couple of years on BusinessWeek Online’s TechBeat, but never really evolved into the type of blogger who engages in a conversation with readers. I hope to do a better job in Bangalore Tigers. I welcome your thoughts.

12:20 PM

Off-shoring

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Steve,

It is an interesting and important topic, and I wish you every success with sales. The Indian companies have caused major disruption, requiring western incumbents to re-think business models and the value they add to their customers. That can only be good for everyone (except the lazy and inefficient).

A successful Indian IT industry has not just massively improved living standards within India (recognising it is still depressingly poor - I was there on a holiday only last year, and even within 50 miles of Bangalore, I saw extreme poverty), but has shown to other developing countries that the right combination of policies, entrepreneurism and diligence can lead to extraordinary benefits. And there are so many such countries who need to heed this message if they are to lift their people out of abject poverty.

We all benefit, in aggregate, from freer trade (as David Ricardo showed a few hundred years ago!), and the Indian IT industry is one of globalisation's great triumphs. I look forward to reading your views on this important issue.

Until I get the book, here's a question: these companies have done well largely in services, but have been less successful in building their own applications for sale around the world. Could an Oracle, SAP, Salesforce or NetSuite come out of India based on what you have seen.

Cheers,

Andrew

Posted by: Andrew at October 5, 2006 03:03 AM

iFlex, the banking software applications leader globally, is the only major software applications company to come out of India so far. It is now controlled by Oracle.

There are other small software products companies on the rise, but none are big yet. Until India becomes a sizable market for software itself, it will be hard for them to get traction.

Posted by: Steve Hamm at October 6, 2006 01:25 PM

The skills required ie capital investment, development time, marketing are entirely different for product and services. India's initial entry into IT was based on one competitive advantage - availability of lower cost, high quality IT - which worked only to disrupt the IT services industry. For products, India has no such great competitive advantage. there are locally developed products - such as Tally - which do well domestically. India leads in telecom penetration and there is a possibility that a product around that might emerge. Onmobile, a platform for mobile operators is doing well and retails in Asia.

Posted by: Lilian at October 7, 2006 04:25 PM

Steve,

I have a big problem with your naming this blog Bangalore Tigers. You seem to believe that India is Bangalore, or Bangalore is India. Well, it isn't. In fact, Bangalore is bursting in its seams. There is a lot more to India than Bangalore, and you should take the time to understand that dynamic.

Pleas read my article, Team Of Twenty One [http://sramanamitra.com/blog/58].

Posted by: Sramana Mitra at October 19, 2006 03:48 PM

Steve,

As someone who's a firm believer in the rise of India as the next big thing in the global economy, it was a wonderful experience reading about the "Vegetable-oil to Software" story of Wipro.

It was indeed appropriate that you chose Wipro over others like TCS and Infosys because of at least two reasons:

1. TCS had its beginnings in 1968 as a captive unit for the data processing needs of the Tata group. And Infosys was founded in 1981 by software engineers employed with Patni Computers. In both the cases, there was prior experience in the domain and they were not exactly entering unchartered terrain. [Interestingly, the precursor to Infosys, a start-up called Softronics, ended up as a failure!] Wipro, however, diversified into IT from cooking oil!

2. Wipro is arguably the only company among them that has spawned startups. Ashok Soota's MindTree stands alone as the only offshoot of the venerable triumvirate of India's IT industry. Although the company itself may not have been too happy about the departure of Mr. Soota and Co., it nevertheless demonstrates Wipro's ability to attract top-notch professionals [one must mention Vivek Paul too here] and to empower them. Infosys, on the other hand, is still dominated by the "old guard" and one suspects that it's true with TCS as well. This is indeed a differentiator in an industry that's supposed to pride itself on innovation.

Incidentally, it is also heartening to note that the new Indian story is not just confined to IT or to Bangalore alone. The proposed acquisition by Tata Steel of Corus [which is about five times its size] is a pointer in this direction. As and when the deal goes through, Tata Steel would become the 5th largest steel maker in the world. No mean achievement indeed!

Best,

Rinu

Posted by: Rinu at October 26, 2006 10:32 AM

Hi Steve,

I agree with your analysis on WIPRO strategies and way of working. But I'm not sure whether have you observed at ground level realities. I read introduction of book and noticed one line

"One of the keys to Wipro's early success was its ability to tap into India's vast pool of young technology graduates willing to work for wages as much as 80% lower than those in the West. But labor arbitrage is only part of the story".

But if you would have tried to communicate any of these young developers probably you could have known the true secret behind success.

### Youngsters are not willing to work on less pay. ### They are attracted by Brand name WIPRO and one MS degree. SO 3 - year graduates don’t find anything best option then this and they join this organization happily but later thy know reality that they have to work like other employees who are being paid higher amount. Even then these youngster work harder and smarter then regular employees still paid very less. Unfortunately they cant quit because as they already have passed one-two year here so again they cant go for higher degree outside.

In single world I'll say nothing is happening genuinely, it is happening at cost of thousand of youngsters who have been pulled intelligently and are working under pressure and with less pay. All these youngsters are offered a MS degree which has not worth quality wise. I agree people see $ dollar only as you might have seen in WIPRO success , apart from quality only $dollar has major role in decision of western companies to heading towards INDIA for labors.

WIPRO has no responsibilites and good intention towards these youngesters, only thing they are getting cheap labour. It is like Western compines grabbing INDIA for cheap labour and Indian companies like WIPRO fooling intelligent young generation of INDIA and increasing their Dollar count.

I believe you need to reinvestigate ground reality apart from Process, Priciples.

One Youngester From Same Companies

I cant give my identity I'll be thrown out as it happens here.

Posted by: One Youngester at October 27, 2006 06:21 AM

For all the IT work that the Indian tigers do, ultimately it is work for hire. Show me one major software product that they have been able to introduce in the US or India (barring iFlex and a handful of companies. All it takes is the US market to tighten and you will see the severe backlash in India - it is a social disaster waiting to happen. And the Indian tigers are happily living off the fat of the land by providing cheap labor without any product or technology innovation.

The US software companies -lead by IBM, Accenture and others do not have the innovation and guts to use available American labor. Don't tell me that you cannot hire programmers/IT people and get them to work in Albuqueque or St Louis or other Midwest/Southwest states where costs are low and perhaps as cheap as India. Municipal and state governments in the US will happily provide infrastructure and tax relief if you setup development centers even in "rural" western states. With the prevalence of Internet broadband, low cost hardware and open source software tools, all it requires is good old American ingenuity. Alas, these companies (IBM et al) lead the way for other mid sized companies who follow them like sheep and setup overseas outsourced centres. Leadership is lacking in the US - be it technology or political - it is time we awaken and see where we are headed with our future being bartered away to India and China.

Posted by: Goleez at October 31, 2006 01:38 AM

I see the Indian Software Tigers in all major European business centers even in colder places like Helsinki, Finland. It is a global phenomenon. The western companies have to adapt to this concept. They shouldn't mind about the outsourcing trend. Do they mind toys & other stuff 'Made in China'?

Posted by: Sivakumar Narayanasamy at November 2, 2006 06:45 AM

Steve,

I am an American now in my 6th year of living and working in the Bangalore area. Some comments:

Most Bangalore Techies and BPO employees work (and travel) 60-80 hours a week. How long can they continue at that pace? I have my own firm and offer 40 hours a week and everyday, I am asked "do you need any help?

From countless comments, everyone starts looking for a new job as soon as the get hired. Most HRD bosses blame "looking for better salary" as prime reason for leaving. Funny, most people tell me the reason the quit jobs is very simply lousy supervisors.

Drive around Bangalore, the "tiger" is no where to be seen, just masses of under employed and poorly paid people. Some few will do well but for the rest. well.

I can't begin to tell you how really bad most job canditates are. 5th rate rural Masters Degree and zero communication skills.

It is not all roses here, drive all around and talk to those who missed the tech boom. Go 50 miles from town and it is another world, go see it.

Steveexpat

Posted by: Steve at November 13, 2006 03:49 AM

Dear Steve,

Sridhar Mitta recently informed me about the Bangalore Tigers and I immediately bought a copy.

I am only part way through it, but am really impressed. I also appreciate being mentioned in the book and I will inform my friends who were also at Sentinel. If you ever need additional information on the start of Wipro into the computer world I may be able to help. I have written my recollections after visiting Bangalore for the 25th reunion. The changes in Wipro and in Bangalore have been truly remarkable.

My organization, the Center for Economic Initiatives (CEI), conducts study tours for business executives in developing countries and we now offer them to Bangalore. It is a great opportunity for others to learn how this industry operates and to meet industry leaders.

Thanks for the mention and keep up the good work.

Lee Cole

Posted by: Leland Cole at November 26, 2006 09:48 AM


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