Making of Another Bangalore

What makes Pune the hub of research and innovation?
What's common between CalSoft, AccelTree, Jopasana, CashTech and rapidEffect?
Well, apart from being five of the 21 short listed companies for Innovation at
the Nasscom annual event this year, they are connected by another common thread.
Interestingly, all the five are based out of Pune. This makes Pune the other
largest center. There were five nominations from Bangalore as well but then
Bangalore is a name that is synonymous with IT in any context. Compulink,
another Pune-based product development company was short listed last year at
Nasscom.

So what makes Pune one of the hottest hubs of product
development? While a lot of people believe that it might be too early to reach a
conclusion, the fact that Pune has emerged as an important center for
technology and innovation is beyond doubt. Says Vivek Mannige, CEO, AccelTree
Software, “Pune has a large number of good quality institutes and attracts
good quality students from all over the country.”
Incidentally, Pune had more than 38 engineering colleges a couple of
years back. The number has grown further in all probability. Adds Ajay Phatak,
managing director and CEO, Jopasana, “The close association of educational
institutes, research and development institutes and the industry give Pune a
winning edge as compared to many of the other cities. The educational institutes
ensure the availability of plenty of local talent.”

In Its Stride

The quality of research and product development that is happening out
of Pune is significant. Take for example CashTech Solutions, a leading global
organization focused on delivering robust cash management solutions for
financial institutions and corporations worldwide. Placing strong emphasis on
research and development, CashTech's core belief is held in innovation through
technology. The company was first started in Mumbai, but was moved to Pune in
1996. Says RN Iyer, one of the founding directors of CashTech, “Pune was less
expensive as compared to Mumbai, had a good talent pool and provided the right
eco-system for small product companies like ours.”

Today CashTech is a Rs 25-crore company and with the
banking industry on a high growth lane, Iyer expects to close the current fiscal
in the Rs 35-36 crore range. In 2004, Fund Tech, a cash management company
acquired a stake in CashTech to get access to the Asian market. CashTech has
also been rated as the best cash management solution by Euromoney, an
international publication, in its financial technology user's survey and
awards last year. While there are around 28 customers, including   14 international clients, CashTech managed to bag three
large projects till February this year.

Then there is AccelTree Software. This Pune-based company
is the youngest in the pack. Founded only in 2002, AccelTree was showcased as an
IT Innovation Company for the development of the FRED Mobile Framework which is
a rapid application development framework for building and deploying mobile
enterprise applications on the simple cell phone. The framework significantly
reduces time to build and modify mobile applications and provides a high
performance and low cost operating platform that runs on many server
environments, including Linux. As the mobile-client portion of an application is
a “thin client” with little or no logic residing on the phone, the
applications can be easily adapted to new handheld technologies. The mobile
applications are focused on being used in India, particularly in rural areas.

Says Mannige, an alumnus of IIT Kanpur with a history of
entrepreneurial startups like Indus Software before AccelTree, “We invested
the first three years in building the framework.” The earnings that came from
the test sites were rather insignificant. “The objective was to build a strong
reliable framework,” reasons Mannige. AccelTree produced its first mobile
solution for Mobile Collections in March 2005 and got its first customer for a
derivate of that product, for the microfinance industry, in May 2005. Since then
Mannige and team has acquired a total of four marquee customers on the framework
and expects to acquire another two by March 2006. These are expected to form the
base of reference customers. The growth so far has been sweet for the company.
The target set for the next fiscal is Rs 10 crore, which is expected to double
in 2007-08.

Advantage Pune

Historically, Pune has been known for the engineering talents it has
produced. This continues to be an edged for Mumbai's relatively low-profile
first cousin. This advantage coupled with its proximity to Mumbai is what makes
Pune an elite center, as compared to other wannabes. 

Digital, which was one of the first companies to set up
shop in Bangalore in the 80s, had sent three of its US-based executives in
search for an ideal destination to set up shop in India. While Pune, Gandhinagar
and Bangalore were shortlisted, it was Bangalore that won the race. This move
saw the likes of Motorola and TI flocking to Bangalore and was followed by the
rise of the India giant Infosys. The rest as they say is history, which could
have been significantly different had Digital chosen to settle in Pune.

Last 10 years have seen Pune spawn more product development
companies than any other region in the country which have seen a surge in IT
services companies. Says Phatak, “Pune surely has the potential to emerge as
the R&D hub of India.” Adds Mannige, “While I do not see any obvious
connection between Pune and R&D, the presence of a large number of
engineering and technology institutes have definitely facilitated the huge focus
on product development.”

Jopasana, for example, helps organizations with speciality
engineering and business applications in the areas of automotive electronics,
apart from networking and data communication, semiconductor, industrial
software, life sciences and chemical analysis. Founded in 1990, Jopasana has its
development center in Pune, India with subsidiaries in the US and UK. That Pune
has a strong base in automotive is a known fact, something that was leveraged by
Jopasana for growth in its initial years. 

Several factors energize Pune to be the hotbed for
innovation-pleasant weather; its proximity to Mumbai; and now the
international airport as well; fairly low cost of living; lower real estate
prices in comparison to Mumbai; and the presence of quality engineering
colleges. The presence of a booming job market now completes the eco-system.

Bhaswati Chakravorty

bhaswatic@cybermedia.co.in