It's been called the Silicon Valley of India. But does it really have the entrepreneurialism and creativity of its namesake, or is it destined to remain the low-cost supplier to American and European IT giants?
It was here ... that the East began: in this chaos of uneconomical movement, the self-stimulating din, the sudden feeling of insecurity, the conviction that all men were not brothers and that luggage was in danger.
- V. S. Naipaul, An Area of Darkness
It is raining in Bangalore. For a few hours at least, the normally poisonous air clears in this south-central, high-plains Indian town of 5 million. The capital of Karnataka state, Bangalore long enjoyed renown as the garden spot of India - an affable, leisurely place celebrated for sweet breezes, cool summers, tree-lined boulevards, honeymooners, and retirees.
No more.
Over the last quarter century, as hundreds of corporations have moved in to take advantage of Bangalore's temperate and dust-free climate, cheap housing, and work force educated in information technology (or IT, the popular shorthand here), economic growth has bred a new set of woes. In that time, the city has quadrupled in size, real estate prices have quintupled, and a once gracious metropolis has begun to choke on its own pollution and gridlock.
Not that anyone particularly seems to notice. Certainly not here tonight at the NASA pub, where I am sitting drinking India's best Kingfisher Beer with Ayyagari Lakshmana Rao, technical vice president of Wipro Systems Ltd., a division of Wipro Information Technology Group - India's second largest information technology company and a leader in Bangalore's explosive software-writing industry.
Rao and I are out tonight, undaunted by the monsoon, indulging in Bangalore's second favorite activity after software porting and patching: pubbing. Indeed, one of Bangalore's charms is the nightly cruise among the hundred-odd bars around Mahatma Gandhi Road in Bangalore's crowded central district, Shivaji Nagar. Almost every night in establishments like Pub One, Knockout, Sonia Green's Thumbs Up, Pubworld, and NASA, the young guns of India's software industry gather, drink beer, groove to Hindi disco, and, naturally, talk computers.
As employer of 1,100 software engineers at Wipro Systems, the 40ish Rao takes a cool, professional interest in the scores of young men who crowd into NASA (there are conspicuously few women about, the sexes still being highly segregated in India). The Church Street establishment is one of Bangalore's pubs du jour, though NASA is more like a Disney ride than a bar: it has a futuristic, neon-lit, duralumin-and-black-plastic Star Wars interior; its walls are perforated with portholes containing photos of astronauts and spacecraft; each table comes equipped with its own nose-cone-shaped ashtray.
Beverly Hills 90210 is on Star TV while waiters dressed like United Airlines pilots pass with amiable impatience among the "freshers," or barely postpubescent IT workers. The staff want guests to imbibe, while the guests want to stretch their drinks as far as possible. The dark young men, dressed in slacks and floral shirts, many sporting the wispy mustaches of early manhood, seem more intent on smoking cigarettes and eating chili-fried peanuts than on buying beer. Alcohol is expensive - a beer costs about 35 rupees (US$1) - and while the typical monthly starting salary of Re10,500 (US$300) for software writers is generous by Indian standards, it buys increasingly less in increasingly costly Bangalore.
That Indian professionals will work for so little, with starting salaries four and five times lower than those of their American counterparts, has given the Indian software industry its initial boost. But as costs and salaries in Bangalore escalate, the old calculus is changing. For the time being, however, the fanatical devotion of Bangalore's IT writers - "They chain themselves to their computers," says one industry local - keeps them going.
Even during leisure hours in the pubs on Church Street, IT is the obsession. So many of Bangalore's software houses, pubs, and canteens are located on Church Street, an alley running parallel to Mahatma Gandhi Road (or MG Road, as it is locally known), that the Bangalore industry gossip has acquired its own handle: the Church Street buzz.
This never-ending buzz focuses on escalating salaries at local IT leaders such as Wipro, Tata, Satyam, and Infosys. Talk swirls about Bangalore's expanding multinationals - Texas Instruments, Novell, Hewlett-Packard, Citicorp, and others. Juicy tales abound about how Sun Microsystems just made off with half a dozen IBM/Tata executives in the process of opening new offices in town. Then there are the details concerning which of Bangalore's notorious "bodyshopping" employment agencies is offering the highest-paying contracts for highly prized software jobs in the US, which come with the bonus of a US Immigration and Naturalization Service green card.
But the hottest Church Street buzz tonight concerns Infosys, India's fifth largest software exporter and the most "American" of Bangalore's home-grown software houses; its new suburban campus, workout facility, and stock options rival those of Seattle or Silicon Valley. Infosys has just lost an important contract with General Electric, and speculation surfaces about what this bodes for the future of Bangalore's "progressives."
"In the last few months, there's been a lot of stress at Infosys," Rao tells me over the din, explaining how the lost business and long commute to its location outside Bangalore has sent 120 software writers looking for jobs. Most were instantly snapped up by other local software houses hungry for bodies in a frenzied market that seems to bring in new assignments from overseas each and every day.
Over an Annie Lennox tune, Rao describes the employment merry-go-round within Bangalore's IT companies. Rao agrees with another executive who suggests that "all you have to do is take coffee in a Church Street canteen to get a new software job." This is a new, unsettling phenomenon for India; Silicon Valley-style upward mobility is shocking to old-line Indian executives brought up in the tradition of nearly feudal loyalty to employers. But it is the taste of free enterprise that endows Bangalore pub life with the tang of modernity and a thrilling sense of being on the technological event horizon.
Underneath it all, however, runs a darker current. Increasingly, questions float about the fundamental viability of Bangalore as the center of Indian IT, let alone as a world leader. Yes, certainly, Bangalore is being painted, in countless news stories, as "India's software Silicon Valley." But is Bangalore, and indeed all of Indian IT, reaching the inevitable limits of growth? Can Indian software, which up until now has competed solely on low price, create the kind of added value, creativity, and brand identity without which - many Indian IT executives agree - some other, hungrier Third World metropolis will snatch the software brass ring?
Church Street even suggests that despite all the brave talk about lucrative, state-of-the-art client-server projects, the big software companies remain mired in coding ancient languages like Cobol for legacy systems that are three decades old. And they marginalize themselves by sending the best and brightest native sons and daughters to work for overseas software companies. Like indentured technoserfs, the workers are paid low salaries - by American standards - and bound to the bodyshoppers by contract.
Bodyshopping is the huge, hidden, and largely denied factor in India's IT successes. One Indian software executive conservatively estimates that Indian workers shopped to companies in America account for at least one-fourth of the Re29 billion (US$825 million) earned from software in the 1994-1995 fiscal year. (NASSCOM, India's semi-official software association, puts the total revenues of India's IT industry during the same period at Re77.4 billion - US$2.2 billion.)
Such numbers, of course, are tiny by US standards. Computer Associates, for example, America's largest business software supplier, did $2.6 billion alone in 1995. And while software is one of the leading exports in this, the early spring of India's new capitalist era, many question whether it has reached a self-sustaining critical mass.
Thus, in the pubs on Church Street, there is a sense that a major shakeup may be coming. The ultimate question, heard even over the amplified rock and roll, is this: Are pockets of sustaining creativity being established that are capable of raising Bangalore out of the bargain basement of software porting and patching and elevating it to the next critical level of IT accomplishment?
My first meeting with Rao, at Wipro's development center off smoggy and bustling MG Road, had been more guarded and formal than our subsequent pub crawl. Wipro is lodged in a peeling seven-story building, set haphazardly off a dirt alley and fronted by a disarray of motorbikes, the vehicle of choice for young Bangalore professionals. The noise and blue smoke from diesel buses and motorized rickshaws hangs in the air as I climb the dingy stairwell up to Rao's fifth-floor office.
In a business continuum that begins with old-line, rigidly hierarchical companies (like the giant Tata Information Systems) and extends to the newer, more American-style companies (like Infosys, Satyam, and Baysoft), Wipro Systems is a middle-of-the-road Bangalore company. Neither too feudalistic nor too avant-garde, Wipro - with Re774 million (US$22 million) in fiscal 1994 software sales - is an enterprise that would rather borrow money from a bank than issue stock. According to one former executive, it's a company that "gives its managers autonomy, but not in terms of sharing ownership or challenging them to grow the company." In other words, it is a central place to at least try to understand the future of the software industry in Bangalore.
While dozens of young Indian men and women huddle over PCs outside his office, the wiry, often-wry Rao recites a Wipro-centric history of technology in Bangalore. His tale begins, as do most such recitations, I soon learn, with the story of how the area's gentle climate and hydroelectric capacity led Indian industrialist Jamsetji Nasarwanji Tata to decree that a science and technology university be built on a 372-acre site in northwestern Bangalore. Founded in 1909, the institute is known today as the Indian Institute of Science. It is India's most important technical school; its graduates are the Brahmans of Indian science.
Educated in preparatory schools all over India, the cream of the Indian technical crop tended to like life in Bangalore, and many chose to stay. With independence in 1947, defense, electronics, and civil organizations were founded and, logically, located in Bangalore: Hindustan Aeronautics, the Indian Space Research Organization, the National Aeronautical Laboratory. These organizations, with the thousands of engineers and scientists who came to serve them, made Bangalore a natural center for Indian technology.
In 1977, under the misguided notion that it would encourage domestic industry, India's socialist government limited foreign investment and demanded that companies such as Coca-Cola and IBM share their trade secrets and best technology. At a critical moment, India's then-Prime Minister Morarj Desai was reported to have challenged a top IBM executive: "Is IBM smarter or is India smarter?" The executive's exact response is lost to history. His company's response was not: IBM politely, firmly, left India.
The result? "A gap," says Rao. "An absence of any indigenous computer manufacturing."
Rao, who was then working on mainframe computers, recalls how he and others helped design small Indian-built micros as a stopgap replacement for what soon became hopelessly out-of-date IBM and DEC machines. These Indian computers were so primitive, Rao remembers, they used Basic - "not even Cobol."
Ironically, as the Indian computer industry limped along through the early 1980s, the isolation led to unforeseen benefits. Free from the stumbling block of old-legacy systems, India leapfrogged obsolete technology. According to Rao, without IBM to dictate computers and programming languages, "there was nothing like a proprietary software base. Everything became open." By default, India became a Unix power.
This period of technological isolation also meant that Indian computer companies were forced to procure indigenous software. A number of unlikely firms jumped into the business. One of them, Wipro, had been a leading producer of vegetable oils, toiletries, and soaps - India's Procter & Gamble. After developing and selling a multiuser system and database program to large companies, Wipro joined the ranks of the Tata Group, India's largest company, which was producing both hardware and software.
PCs made their appearance in India in the mid-1980s, but tariffs greater than 100 percent on hardware forced Indian software writers to create programs that Rao says "extracted every last bit and byte out of small platforms."
Economic liberalization, undertaken in July 1991 by the Delhi government to lighten the heavy hand of state socialism, provided the impetus for American and other multinational companies to return from their 15-year exile. When companies such as Texas Instruments, IBM, Hewlett-Packard, and Intel returned, they found a home-grown expertise in elegant, economical software writing. Alliances were formed between companies such as Wipro and Intel, Tata and IBM, Satyam and Dun & Bradstreet.
After the government virtually abolished equity restrictions in the early '90s to stimulate India's economy, Texas Instruments, Hewlett-Packard, Fujitsu, Hughes, Sony, Siemens, Deutsche Bank, and others took the next step, setting up their own branches in Bangalore. "A chain reaction set in," relates Rao. "One company came back with a good experience, then a second company, and so on." Today, the number of major IT companies in Bangalore tops 100; some multinationals, such as Novell, spend as much as 5 percent of their total R&D here.
But all is not booming. On four separate occasions during my hour-long chat with Rao, the lights dim and then die. Euphemistically called "load sharing," such brownouts are common in Bangalore. Software houses fill rooms full of generators to take up the slack during these regular power outages.
Rao notes unhappily that lack of power is only one sign of the underdevelopment in Karnataka state. It represents, he believes, the many problems that India will have to overcome before it can take its place as a world-class IT purveyor.
Even more telling to Rao is the lack of top-shelf, noncustom, packaged software coming out of India - the accounting, word-processing, database, and networking products that have made American companies such as Microsoft, Lotus, Oracle, and Novell office (if not household) names. Both Wipro and Tata Information Systems have introduced business products, but they have failed even to win large shares of the limited Indian market - which comprises only an infinitesimal 650,000 computers out of more than 100 million in the world (a particularly bad showing for a nation of nearly 1 billion). India, Rao laments, "has a long way to go in creating a branded software package."
But there is still a glimmer in his eye when the talk turns back to the project-code writing that is Bangalore's métier. "The software boom continues unabated," he notes with an air of satisfaction.
Later, Rao takes me upstairs to the seventh floor; here the Wipro development team assigned to Canada's Bell Northern projects is about to start a teleconference with counterparts in Ottawa, where it is early morning.
Eight people sit uncomfortably around a long table in Wipro's conference room, staring at a large Sony television, atop which is mounted a PictureTel camera. On the screen, a sleepy Canadian from Bell Northern leafs through a printout, talking to a friend next to him and basically ignoring the fact that he is being watched in real time by people on the other side of the world and the other side of the day. While making global small talk, the Indians arrange themselves around the end of the table farthest from the television.
"Would you like to make the introductions?" the Bell Northern supervisor asks his telecolleagues.
"I'm Ragan, you know me," a young Indian man says self-consciously, beginning the mutual hellos.
"Start presenting," the Canadian team leader suggests. "Who's taking minutes?"
"We'll send them to you," one of the Indians reports back. For the next hour, they critique the software coding for a Bell Northern communications package. Both teams settle in, and soon, seated in rooms 12,000 miles and 11 time zones apart, they begin to feel like they're in the same place.
Which they are. A place called cyberspace.
Today's expanded 435-acre campus of the Indian Institute of Science is the cradle of technological education both in Bangalore and, by extension, in India. It is also one of the few spots in the city that has not been overrun by urbanization. With its lush grounds, stone towers, and red-tiled roofs, the institute could pass for a slightly downscale version of Stanford University.
The comparison between Stanford and the Indian Institute of Science - and between the role each has played in developing regional technologies - is one that the school's director, Govindarajan Padmanaban, eagerly seizes upon as he sits behind his grand piano-sized desk in a dim office in the administration building. "You're right about the analogy," the tiny, white-bearded Brahman agrees. "The institute was a catalyst for many of Bangalore's public, and private, sector aerospace and technology industries."
But the comparison, Padmanaban admits, is also flawed. Bangalore, with its still nascent computer-related bona fides, does not quite stack up to the cradle of technological innovation that is California's Silicon Valley. This troubles Padmanaban. While proud that "most of India's technology leaders" are a product of his institution, the director is perturbed by frozen budgets and shrinking government support. One result is that the institute's 435 faculty members are required to spend one day a week serving as consultants to the government or private industry. "Go to the Bangalore airport," he says darkly. "Every flight to Delhi has a professor going to consult."
To Padmanaban, this imposed bureaucracy symbolizes how India has failed to adequately leverage the brainpower of the world's largest English-speaking population. "Our system of education doesn't breed originality at all," he complains, referring to what he calls "the watertight compartments" of Indian schooling. Padmanaban believes that years of rote learning have led to "undergraduates who are so straitjacketed they need to go through a process of unlearning."
"What really happens," he says, "is that all the brightest students in the 12th standard go into medicine or engineering." Padmanaban blames Indian parents for succumbing to social pressures and pushing children into careers that are safe and transferable abroad.
The thing that most galls the director, a devoted man of science, is the tendency for students to receive undergraduate degrees in technology and then go to business school. "Students flock to management education, they just flock toward it," Padmanaban shakes his head, convinced that the current system is not building India's technological base.
Indeed, he downplays the popular notion that India can become a serious technological competitor any time soon. India is still a nation "not yet secure it can play the game," he suggests, pointing to the fact that fully half of Indian graduate students coming from the most prestigious universities leave the country after school.
Padmanaban does, however, see hope in a new phenomenon of "people who graduate, don't go abroad, and start their own technology companies here." These small entrepreneurs, he believes, "will want the help of this institution."
Church Street is crowded at lunch time. Dozens of young workers from neighborhood software companies congregate in clots on the busy road. The bachelors are the ones who don't pack lunches: you can spot them buying their food from thali-wallahs who carry stacks of nested stainless steel containers filled with steaming dhosai.
A hundred yards down Church Street on the right is a small white sign whose sailboat logo reads "Baysoft." Through a gate and down at the end of a long driveway is a house, spaciously upper middle class by Indian standards, set incongruously in the heart of Church Street's commercial sprawl. Baysoft headquarters started out in the adjoining garage before expanding to its current office.
The company is largely the creation of Joe Vithayathil, a Bangalore-bred, Harvard Business School-educated Indian software executive who gave up a lucrative Silicon Valley job and a comfortable California life to move his wife and four children back to his childhood home.
A warm, expansive man with solid features, Vithayathil is standing in the yard in front of his garage when he shouts out a greeting to me. Sticking out a large paw, he welcomes me with a firm, American-style handshake.
In 1994, Vithayathil, a rising marketing star at Philips Semiconductors, caused a stir in Silicon Valley when he announced that he was returning to India. His move was an aberration: he was going back to a place that talented Indians with marketable skills couldn't wait to flee.
Vithayathil's rationale for returning had as much to do with his children's heritage as it did with his business. "It's important to get experience in another culture," the ebullient Vithayathil explains, "but I felt if I didn't do something, the kids would think the world begins and ends in Fremont, California." The four Vithayathil children, especially the eldest, Anne, were not happy with his decision to pull up stakes. Vithayathil had to promise to take them regularly to the closest thing Bangalore had to a McDonald's - a restaurant called Mac Fast Food.
In early 1995, after a short stint as chief executive officer of ITTI, a mid-size local software house, Vithayathil took an even riskier step - he decided to start his own business focused on client-server software and named nostalgically after the San Francisco Bay area, his former stomping ground. "What the hell," Vithayathil laughs, recalling his second leap in as many years. "I was having so much fun, I said, Let's do our own company." Tapping Harvard friends (among others) as investors, Vithayathil quickly and privately funded Baysoft.
His timing was fateful. With many business restrictions already wiped out by the 1991 economic liberalization, Vithayathil was certain that the Indian market was "ready to go through the roof." He was already impressed with the work Indian software coders were turning out: "characteristically more methodical, vigorous, structured, disciplined, and according to the rules" than the American version. What was holding the country back, he felt, was philosophy and structure. "Creativity is suppressed here," he often told acquaintances. "People are not allowed to express themselves; they learn by rote."
Vithayathil's vision was to build a business that blended the best of Indian coding with the best of American business values. And Vithayathil's first law, "We don't have employees, we have owners," led to a stock-option plan that pushed the envelope of Indian business practices and regulatory law.
Baysoft began with a human resources plan to find software engineers who were comfortable with a more open and thus less Indian way of doing things. Vithayathil's first move was to hire a human resources company, which in turn came up with some fairly nontraditional, and un-Indian, hiring plans. One of these was to gather together job seekers for an orientation about the company. Baysoft representatives would then excuse themselves, leaving behind a company employee disguised as one of the job seekers. The undercover employee would take notes on the applicants' behavior. "We'd leave and see who spoke up," Vithayathil says about what he laughingly admits was a slightly underhanded tactic.
But the rationale was sound. "People who are more open want to work in a place where they can speak up," Vithayathil says about the mostly younger candidates who passed the test. Once employees were hired, however, there was still an awkward adjustment period for a work force that lived by a generations-old code that Vithayathil expresses as "If you speak up, you're a fool."
His secretary learned a fundamental lesson one day when she presented Vithayathil with the day's stack of mail. Vithayathil handily dismissed the Indian business practice of routing even routine correspondence through the CEO, sending her away with the dictum, "Bring me only what is important."
It was one of many shocking moments in Baysoft's early life. Vithayathil faced even more of an uphill battle dealing with Indian discomfort over confrontation, particularly when it came to quitting a job. The Indian notion of "giving notice" seemed to mean an apologetic call from the airport right before an employee, too embarrassed to tell a boss directly, boarded a flight for an arranged job in the States.
"People are afraid to tell you they're leaving - they won't even spend 15 minutes turning over a project," complains Vithayathil about bodyshopping, which helps account for the nearly 25 percent annual turnover in Bangalore.
When he first returned, Vithayathil learned his lesson the hard way. "I got a letter from an employee saying that his father was ill and that he was going back to his village for a few days," Vithayathil chuckles. "I told my staff that I'd send a bouquet. Everybody burst out laughing." Turnover generally is just one nightmare of Bangalore's software industry. "At 6 o'clock, all your assets walk out the door," Vithayathil notes.
Still, Baysoft continues to win contracts and staff up. After importing a favorite Silicon Valley business practice - running his company out of his garage - Vithayathil is finding himself following in the footsteps of many of his California counterparts: he's moving to a larger compound. Whether this little chunk of Silicon Valley in India is the wave of the future has yet to be determined. But the benefits of starting small and working at home have given Vithayathil one of the shortest commutes in Bangalore and what he claims is "the biggest conference room in the city" - a picnic table set outside in his front yard.
I am having lunch in the home of attorney M. Ram Bhat in the Vasanthnagar district, just north of Vidhana Soudha, the magnificent, and totally noncomputerized, neo-Moghul knockoff that is the Karnataka state capitol building. Bhat is the father of Shiba Bhat Hariharan, whose husband is a software engineer at Baysoft.
In addition to family, the Hariharans have invited along a friend, Sirajudin Salahuddin, who bills his firm as "The Friendly Consultants." Living in Madras, about 200 miles east of Bangalore, Salahuddin is in the process of setting up a Bangalore office for his booming business: finding people software jobs in major cities all over India and abroad.
An MBA, Salahuddin hit a rough patch after school in Bombay in the early '90s. "I did 50 to 60 interviews with no job, so I decided to get people jobs," Salahuddin says with gusto. By placing ads in a number of newspapers and computer publications, he was able to build up a database of software professionals seeking jobs for clients including employee-hungry software houses and overseas bodyshoppers.
Salahuddin quickly caught on to the tricks of the recruiting trade, particularly in the gray world of hiring for US firms. Bodyshoppers procure a recruit's visa applications and pay for travel and housing costs. The "bodies" then go to work for American companies, more or less indentured to the bodyshopper, who takes a fee from an employer and pays the recruit a certain percentage.
Although Salahuddin differentiates his practice from the crasser aspects of the business - "my relationship with the candidate ends the day he leaves India," he tells me - he is well versed in the blacker arts of bodyshopping, having worked with some of the largest bodyshoppers, including Software Technical Services, an Atlanta-based company that brings software writers to the US to work on-site for clients such as IBM, MCI, and Oracle.
According to Salahuddin, high-level software writers are paid between Re88,000 and Re141,800 (US$2,500 and $4,000) a month, which is between 25 and 40 percent of what the bodyshopper is paid by the client. And while this is a tremendous salary in India, it is a bargain compared with the pay Americans receive for equivalent work.
Salahuddin does not see this arrangement as unfair in any way. Considering the initial outlay of funds for travel, visa, and living expenses, bodies don't really start to make the shopper money until the second or third year. Salahuddin reels off the names of a half dozen other bodyshoppers headquartered in New York, Detroit, and elsewhere in the US.
The bodyshopping arrangement naturally invites employees to jump ship as soon as possible in the States and go out on their own. And, just as naturally, the bodyshopper will do whatever possible to prevent that body from doing any shopping for itself. So software writers are often forced to pay a huge indemnity if they break the contract, or they are stripped of their green cards if they leave. Bodyshoppers are not above harassing relatives back in India, either. Sometimes they coax workers into dormitories, the better - and cheaper - to keep an eye on potential deserters. The lowest of the low bodyshoppers charge clients huge amounts upfront or send them to the States without a set job and then pay $15 a day until they are employed. Salahuddin's advice about bodyshoppers like these: Avoid them.
By contrast, the domestic employment scene is tamer. Placement services inside India take a fixed amount, usually two to three months' salary, to place people in software houses with an overload of work. These aren't bodyshoppers, Salahuddin says, but "business partners."
Salahuddin pulls out several local computer journals containing his ad - and others. Ad after ad requests experience in such highly sought-after skills as PowerBuilder, Oracle, C++, and Sybase. The most prominent ads have something else in common: they include the enticement of working in the US.
No tour of the modern technical culture in Bangalore would be complete without the noisy ride along Hosur Road in an aging, seemingly springless Ambassador, the workhorse Indian sedan that has not changed its style or technology in the last 30 years. The road leads southwest, out of downtown to the new Infosys campus in the Electronics City.
Getting to Infosys Technologies Ltd. requires a ride through Bangalore's crowded streets, which by midmorning are tinged gray-blue from the carbon monoxide pouring from auto-rickshaws and unmuffled diesel engines, past shantytowns with dogs, sheep, and pigs rummaging freely about the garbage-strewn roadside. The weight of colorfully dressed humanity moving along the road is both oppressive and compelling, as are the endless bazaars and stalls selling shoes, wood, kitchen goods, and everything else imaginable to men in white dhotis and women in orange saris. It is out of this seemingly primordial chaos that a world-class technical culture is trying to evolve.
Even after the morning rush, it takes nearly an hour to reach Infosys, less than 15 miles outside the city. The campus, with its three red-brick and concrete buildings set on five acres of grassland, has been occupied for a year now. But like so much of Bangalore, the stained masonry makes the exterior seem decrepit and unfinished at the same time. Infosys was the first of the major software houses to leave Bombay for Bangalore in 1983 and also one of the first Indian companies to set up a Silicon Valley-style campus on the outskirts. The long commute is just one sign of how far Infosys, the most western of Bangalore's software companies, has pushed the Indian paradigm.
?Notwithstanding the naysayers, Deputy Managing Director Nandan Nilekani insists the adjustment to the new site has been fairly smooth - aided by a trio of blue Infosys buses parked in a bare dirt field to shuttle employees back and forth from town.
Nilekani, one of Infosys' seven founders, takes me on a tour of the landscaped campus, a handsome site containing a gym, basketball and volleyball courts, a large library, a videoconferencing center, and classrooms named after Nobel laureates. Its computer room is stuffed with NT and Sun servers, an IBM RS/6000 Unix system, and two Hewlett-Packard 9000s.
Dozens of young Infosys employees move through the high-ceilinged hallways conversing noisily, like college students between classes. Nilekani surveys the scene as he describes the typical Infosys employee: "early to late 20s, from the best colleges, with an engineering background, comfortable with mathematical constructs."
Infosys is betting that younger Indians can continue in the ancient tradition of philosophical inquiry that, Nilekani suggests, "gives us a good comfort level with conceptual things like software," while they also adapt to the wired way of doing business. This dialectic, Nilekani believes, has been bridged by an increasingly adaptable employee base, able to accept new ideas and ways of doing things "without a lot of preconceived notions."
"Most Indian software companies are either multinationals or part of a larger company," he says, taking pains to differentiate the young-thinking Infosys from other Bangalore software houses. "Software is all we do." Wandering through Infosys' landscaped courtyard, he ticks off the progressive clients - Reebok, Nordstrom, AT&T, and Nestlé - that have ongoing contracts with Infosys.
Most importantly, Nilekani suggests, Infosys differs from traditional Indian companies in a customer-first orientation impossible in the restrictive, even feudal environment that has been the tenacious motif of Indian business life over the last 40 years. "Those companies got ahead not by satisfying customers but by preempting their competitors with intricate government licensing agreements," he says. Nilekani is neither the first nor the last to characterize as pernicious the dance between the government and generally well-established companies.
Nilekani tries to answer the critical conundrum of why India, with its deep traditions of education and English-language skills, has had such difficulty absorbing First World business practices and technology when similarly endowed cultures, such as Singapore, have done so well.
Part of the answer, he tells me, lies in a static, don't-take-risks attitude. He also believes that one of the major problems, a "government impedance that was a significant part of our business cycle," is being stripped away. "No question - in the last three to four years, this country has not only changed its laws but also its mind-set."
As an example of one who is breaking the government logjam, Nilekani singles out Srinivasa Varadan, the head of the Bangalore Software Technology Park. "Varadan is more dynamic than most people in the private sector," Nilekani says as he points to the Infosys microwave tower. It is trained on Varadan's satellite Earth-station, one of Bangalore's links to the infosphere.
This critical connection, Nilekani says, makes the Infosys campus an equal to any other wired node on the planet. "We sit here on the Internet, CompuServe, the World Wide Web, with the same real-time connection as New York, San Francisco, and Dallas."
The same Varadan is sitting in his Danish-modern office, two miles from the Infosys campus on the other side of Electronics City. Outside his window is a pastoral scene: goats graze contentedly while, in the distance, workers use rudimentary tools on a construction site. Varadan, a tall, elegant man with slim hands and a crooked smile, is explaining how the concept of the Bangalore Software Technology Park has changed since its 1991 inception as a scheme to promote IT start-ups by pro- viding discount office space, computer time, and satellite links, along with incentives such as duty-free import of computer equipment.
"Originally, the STP started out as a physical entity, which meant you had to hire space and do your software exporting from here," he explains. "But because technology changed so rapidly, we had to adapt to suit conditions," he says about the concept of the "virtual STP."
"Now," he says, "they can stay where they like, and we can provide them with the same benefits from here."
Necessity - in this case the gridlock that made it highly undesirable to locate this far outside Bangalore - may be the mother of reinvention: here the result works especially well. "We realized the entire business of software depended on how fast you communicate with the outside," admits Varadan. "We said, We'll create that infrastructure and let people stay where they are."
Companies within a 30-kilometer radius can now simply aim their microwave antennae toward the STP and connect by satellite uplink to clients anywhere in the world. And only a few of the 120 companies taking part in the STP scheme are now located inside the park.
Varadan, a graduate of the Indian Institute of Science, is one of a new, and still rare, breed of government officials who have taken the 1991 economic liberalization seriously. He works for the Department of Electronics, possibly the one Indian federal entity that has done the most to throw off the numbing history of entrenched bureaucracy. Varadan throws the compliment back at the businesses he supports: "The software industry has made the best use of this liberalization of any industry in India," he says.
Like many Indian scientists, Varadan has a strong mystical bent and is a devotee of Ganesha, the elephant-headed son of gods Shiva and Parvati. "Ganesha takes care of obstacles," he says, sounding both proud and a bit embarrassed. "Every day, I get up and pull a card with Ganesha from the cupboard. I do it religiously" - he pauses to laugh - "to overcome obstacles."
As we make our way out of his office for a tour of the STP network operations building, Varadan suggests that the Hindu religion is at least partially responsible for the Indian propensity for writing software. "Software is like following a religion," he says. "From the beginning, you learn to be systematic in your approach to both software and Hinduism." He may have a point. Indian holy books suggest that there are 330 million Hindu devas, or gods - around the number of lines of code written in Bangalore in a good month.
We walk behind the STP building across a windy plain and through a wrought-iron fence into the network operations complex. Outside are two satellite dishes - one for the domestic Insat system and the other for the international Intelsat consortium. Inside the center is a mission control with glass panels protecting US-built computers and switching devices; a series of monitors controls the uplink and network connections.
Five of Varadan's assistants are on duty inside. Not hugely busy, they gather around to watch a demonstration of satellite access to the Internet on a Sun Netra server. They show me the STP homepage and then troll through cyberspace, finding the White House homepage, People magazine's "Celebrity Weddings '95" cover, and a live multicast from NASA in Houston. Pictures and sound crackle over the ether: "This is mission control Houston. On-time landing for the Shuttle Endeavor is predicted for 6:53 a.m."
Varadan is impressed with the display. And a little miffed. "I wish we had shown this to the minister when he came to visit yesterday," he says sadly, shaking his head.
There is something strangely familiar as I walk through the angled, cutout atrium of one of Bangalore's newest, plushest office buildings, on the road to the airport. It is afternoon, and the young men coming back from lunch move together in groups. They seem, somehow, to belong together. You add it up: clean-cut faces, dark suits, white shirts, rep ties, backs appropriately straight. Actually, you spell it out: I-B-M.
I am on my way up to the seventh floor and a meeting with John Whiting, who is a pleasant, white-haired, Gary Cooper look-alike, an IBM lifer on temporary assignment as president and managing director of Tata Information Systems Ltd.
TISL is a co-venture between Tata, the IBM of India, and IBM, the Tata of America. Begun in 1992, it marked IBM's official return from exile. When I slip, suggesting that IBM had been invited out of India, Whiting interjects pointedly: "The government changed the rules. IBM had the opportunity to stay; we chose not to."
Nor was the choice of Tata - India's largest, most prestigious company - as a partner coincidental. "When we came back, we wanted a quick start," Whiting says. "It made more sense to form a joint venture, especially because we know that Tata is very compatible with IBM."
Whiting - whose comfortable rosewood office, with its recessed lighting and subdued art, could as easily be located in Armonk, New York, as in Bangalore - is happy to tell you why Tata and IBM make such beautiful music together. He mentions Tata's chair. "The first time I came out to India, I met with Ratan Tata, and we saw the business in similar terms," Whiting says in flat, Midwestern executive tones. "We see the world in the same way; I can predict how Tata will respond to issues I raise."
One of the things IBM and Tata agreed on when they began TISL was that Bangalore was the right place to be. "To a lot of Indians, Bangalore is ideal," says Whiting. Also chair of the American Business Council in Bangalore, Whiting sees tremendous similarities between the current software rush here and the 1960s Southern California aerospace boom when, he recalls, "engineers went from Northrop to McDonnell to Lockheed and back to Northrop."
Whiting laughs impatiently as he modifies the analogy. "Actually," he says, "Bangalore has the characteristic of the US's freewheeling Wild West, with its freedom and looseness." He is not altogether pleased with those qualities - and even less pleased about a recent raid by Sun Microsystems. "Sun opened in January, 1995, and hired my vice president of marketing as managing director. He took four people with him."
"It's one of the things I have trouble with," Whiting admits. "At IBM, we have cultural loyalty up and down. Here, I wonder where the loyalties are." There is just a touch of malice in Whiting's voice as he laughingly suggests that unlike the US aerospace industry of the '60s, "the door may not swing both ways. We don't rehire."
In any event, TISL is growing so fast pinpricks are quickly forgotten. "Fine," he laughs, "the same month the four left, I hired 50."
Whiting likes the cut of the people TISL has hired in recent months. And he sees a budding sense of entrepreneurialism he thinks may pull India out of the contract-software doldrums. "They have a real interest in going out on their own," he says. "The kids who join us tell us that they want to be here five to eight years, then head up their own software company."
This is where Whiting believes the country must head. "India needs to get into more products. Products are more financially rewarding and riskier," he says. "For every successful product, there are a dozen or more not accepted." "But where will that creativity come from?" I ask. "Creativity comes from a need." Whiting thinks for a moment. "It is a spontaneous insight," he answers. "They saw the need and offered a solution. But it's hard to predict from where it's going to come."
It is my last night in Bangalore, and until now, I have privately engaged in a fruitless search for someone who might fit the mold of a Bill Gates, a Marc Andreessen, or an Indian version of Singapore's Sim Wong Hoo of SoundBlaster fame. I have scoured the floors of Connectivity India - a conference sponsored by MicroLand, the budding, business-oriented CompUSA of India - for my technoprotagonist, only to find an utter absence of the teenage computer jocks who haunt computer fairs, whose presence is synonymous with high-tech First World status, who act as shock troops for each succeeding wave of computer technology.
I have learned one reason for the dearth of computer-crazed kids in India: the lack of a reasonably priced Indian PCs. With computer hardware tariffs only recently down from a staggering 120 percent, the prospects that India will be energized by the same kind of personal computer revolution that swept the US in the late '80s seem remote. And though India has a huge middle class, the rupee equivalent of US$2,500 is hard to come by for any but the upper-est of upper-middle-class Indian households.
I can't even find traces of the lust for computer horsepower that is a feature of wired life in the US, Japan, Singapore, and other First Computer World nations. When I ask one young software graduate if she would like to have a computer to take home, she looks at me as if I were one of India's shockingly neglected dogs. "I never had a computer of my own," she sniffs. "Why carry office work home?"
Instead I have found those who are at their roots canny, conservative businesspeople. It has come to seem fruitless to cast around for the kind of anti-establishment hacker who might create the insanely great products to blast Bangalore out of its golden porting-and-patching software-project ghetto.
Then I hear of Bharat Goenka.
He works in a woody, comfortable office in the downtown Raheja Arcade shopping center for a company with the totally unmarketable - if intriguing - name of Peutronics Pvt. Ltd. Goenka is a virtually self-taught developer who has created Peutronics's bestselling product: a ledger-accounting software package called Tally that has the ability to seamlessly interpret and adapt to a wide variety of product classifications and inventory specifications. India's leading accounting software package, Tally claims a 45 percent market share, compared with 32 percent for EX, which is produced by the venerable Tata.
I arrive at Goenka's office at 6 p.m., only to find that he is still at home, just waking from a day's sleep after having been at the computer all night. Within 10 minutes, the shambling, shy, self-deprecatory creator of Tally is sitting across from me on an office couch, explaining how he came to create India's sole shrink-wrapped hit. "Don't mind if I look a little silly," he tells me as he scratches his heavy beard and looks down at his open shirt and sandals. "I'm not a marketing kind of guy."
After a relatively undistinguished college career, Goenka, now 34, began working for the family textile-supply business. Interested in computers, he went in search of inventory software he could adapt to the varying and arcane lengths, measures, and weights used for cloth and silk in India. Goenka didn't like what was on the market: "What we saw was deplorable," he says.
Self-described as the family's black sheep, Goenka put his autodidact's software skills to work and in a matter of months came up with the product he named Tally. With family money, he introduced it in 1988. Although the Goenkas had been selling textiles for 35 years, by 1990, word of mouth had made Tally so popular that textile operations were shut down in order to concentrate on the software accounting package.
Easy to learn ("I offer to train accountants in four to five hours"), Tally is run in more than 12,000 Indian businesses. Close to 50,000 units of Tally's 13 upgrades have already shipped, and a version 5.0 has just been introduced. Spurning a buyout offer from Tata ("it didn't have a good gut feel"), Goenka and his family were content to allow the product to grow on its own with little marketing or advertising.
More interested in the technology than the business, Goenka is happy to let his father run Tally's day-to-day operations while he concentrates on improving the software. "I will be unhappy if we don't deal with technology," Goenka suggests about Peutronics's prime directive.
"His father will be upset if they're not interested in market share," a colleague pipes in.
"We intend to be aggressive in the next three to four months," Goenka admits sheepishly, mentioning that Tally will be available in the United Kingdom by mid-1996. But doubt creeps into his voice when he mentions finding a partner for the American market. "If we do a bad job introducing it," he hedges, "we won't have a second chance."
Goenka is eager to see India get its chance to become a world IT player, but his doubts simply seem magnified when he begins to talk about India. "India doesn't believe in itself, so how can you expect customers to believe in the industry?" he asks. As an example, he cites the unwillingness of hardware and software suppliers to keep items in stock. "It's a joke," he says. "A big dealer picks it up in lots of 100."
He admits to feeling a little bit exposed when big Indian companies such as Wipro and Sonata have tried and failed to make successful software products. But he attributes those failures less to the quality of the product than to the fear of putting money into a venture that might fail. How much safer it is, he suggests, to invest in the far less risky business of writing contract software.
"If you believe that all you're good at is low-cost programming conversion," Goenka continues, "why get into products?"
Unsure that things will turn around any time soon, Goenka blames this technological failure of nerve on what he calls The Indian Conundrum, a deeply ingrained belief in the finality of karma.
"Will this be Bangalore's epitaph?" I ask. Goenka shrugs. "You can't be bigger than you were meant to be."
__Richard Rapaport __would like to put together a group of investors to build a low-cost PC for India. He can be reached at rjrap@aol.com
