Moment of Truth
1/2/3 BHK flats available for sale/lease for IT professionals," scream
large hoardings on virtually every street corner of the city. Sounds familiar?
Perhaps it reminds you of Bangalore in the early '90s, when the Infosys-led IT
boom was catching up in India and the sleepy Karnataka city was on its way to
becoming the country's premier IT destination. History always has that uncanny
habit of repeating itself-the same scenario is enacting itself nearly
frame-by-frame today in yet another sleepy town, whose only claim to fame
hitherto was that it was regarded as a weekend getaway for Mumbaiites. No prizes
for guessing the obvious identity of this erstwhile supine town: Pune. This is
the venue optimists believe will replace Bangalore as India's number one IT
city in the next 18-24 months.
A
realistic assessment of this new phenomenon is in order. With Bangalore's
resources tapped way above the saturation level, simple law of nature demands
the emergence of a second IT hub. But it is also a city ingrained indelibly into
the global IT psyche, it would be not just impudent but also naïve to imagine
that a second city can supersede Bangalore. But then, do we really need to
replace the reigning icon in order to welcome a new one? Instead, it is very
much possible that Pune might become Indian IT's new Mecca, even as Bangalore
remains its hallowed Jerusalem, sustaining its decade-long position.
There are other pretenders besides Pune to the sobriquet of "Next Best
Thing in Indian IT": there are Chennai, Hyderabad and Kolkata. But Chennai
is rather conservative, Hyderabad post-Naidu has lost its IT sheen while Kolkata
hasnt yet fully come out of its Marxist lethargy. Until then, at least, Pune,
the embodiment of Marathi pride, honor and culture, can undoubtedly stake its
rightful claim without real threats from elsewhere.
A Tale of Two Cities
Pune and Bangalore-a tale of two IT cities, one aspiring, the other already at
the zenith, co-existing at the top, something like today's matinee idol
Shahrukh Khan sharing the same screen with the evergreen Amitabh Bachchan. The
story could, however, well have been reversed. Here is what Vishwas Mahajan, CEO
of Compulink, a Pune-based software products company, has to say: "In the
mid '80s I was working for Digital in India, when three of their US executives
came to India scouting for locations to set up operations. Three cities were
short-listed: Gandhinagar, Pune and Bangalore, but their vote went to Bangalore.
Once Digital set up in Bangalore, MNCs like Motorola and Texas Instruments
flocked there, and finally the meteoric rise of Infosys sealed Bangalore's
destiny as the top IT city." If only Digital had chosen Pune then, today
Dataquest might have been doing a special focus story on Bangalore, examining
how it could emulate Pune's success as a preferred IT destination.
While history cannot be changed, one can ensure Pune capitalizes on its
advantages so as not to miss the bus again. First, it is in some ways
reassuringly similar to Bangalore: first, fairly pleasant cool weather all year
round, and, second, a plethora of quality engineering colleges that ensure a
fairly variegated talent pool. These educational institutions in both cities
attract students from all over the country, creating a vibrant student community
in both cities. With most of these students entering the IT industry later, this
cosmopolitanism rubs off onto the job scene too.
Neighbor's Envy, Owner's Pride
However, Pune has features unique to itself too, most important being its
location near India's financial power center Mumbai: proximity to Mumbai's
financial czars and VCs has helped in fostering entrepreneurship in Pune. Even
the lack of an international airport is compensated by the fact that the Mumbai
International Airport is only a three-hour drive from Pune along the Mumbai-Pune
Expressway.
On the other hand, Pune is still relatively untainted by some Mumbai woes.
Real estate prices have soared but they are nowhere in the Mumbai league yet.
These might shoot up, as happened in Bangalore, once the IT habitat gets finds
its feet, but it's gala time until then, Cost of living is still relatively
low, ensuring that attrition levels will not go out of control, though this too
might change once the influx strengthens. And one factor generally ignored by
most is that the son-of-the-soil feeling is very strong amongst Puneites, a
feeling sorely lacking amongst people who leave Kolkata or Mumbai. Even US-based
NRIs come back to the city and become entrepreneurs, like in the instance of eQ
Technologic, Kenati Technologies and Cybage Software.
Historically, Pune has fostered entrepreneurship, especially in IT. This can
be attributed to the fact that in any location where there are fewer
opportunities of job creation in IT, many tend to move towards a sort of default
"forced" entrepreneurship. This probably answers why Pune has so many
first-generation product companies (typically entrepreneur-driven), while
Bangalore has second-generation entrepreneurial ventures. Additionally, Pune's
long tryst with engineering (it housed some of the doyens of Indian industry
like Kirloskar Brothers and Bharat Forge) and automotive industry (Tata Motors,
Bajaj Auto, Kinetic Engineering — the list goes on) resulted in the extensive
involvement of IT companies in these domains. Some like Tata Technologies,
Synise Technologies or KPIT Cummins were directly spawned by engineering
concerns, while others like Neilsoft and eQ Technologic are IT companies largely
specializing in engineering.
The |
||
Companies | 2004 | 2005* |
WNS | 3,000 | 5,000 |
MsourcE | 2,100 | 3,000 |
HSBC | 500 | 1,000 |
Progeon | 400 | 800 |
Oceans Connect |
300 | 600 |
Zensar | 120 | 300 |
*Projected |
None of this has been properly publicized heretofore: not Pune's very
creative entrepreneurs, not their innovative companies. Some feel that it is the
Maharashtra govern—ment's lack of IT focus, a consequence of the high degree
of industrialization of the state, that has led to this situation. Explains
Mahajan, "For states like Karnataka, with limited industrialization,
succeeding in IT was a do-or-die situation. Not so here. Add to this the fact
that, unlike a Krishna or Naidu, most politicians in this state have backgrounds
in the sugar co-operatives industry, and therefore aren't exactly equipped
with visionary IT acumen."
The Billion Dollar Question
Whatever be its pluses or minuses, that Pune has come of IT age became
evident a few months ago when it was widely reported that the city crossed the
billion dollar mark in software exports. However, later some in the industry
hotly denied this, claiming to have fallen short by $200,000, leading to the
resignation of the proactive director of STPI. What everyone seemed to lose
sight of in this melee was that the billion dollar mark was hardly the most
important signpost in Pune's journey as an IT venue of choice. After all, when
you set out to climb the 29,000-ft high Mount Everest, you do let your
expedition stall over whether base camp should be at 50 ft or at 80 ft.
Rites of Passage
But it was this very billion-dollar fiasco that prompted Dataquest to take a
closer look at Pune companies. We interacted with around 50 companies, including
BPOs, though it has not been possible to highlight them all. Our study excludes
all those biggies who have development centers in Pune but are headquartered
elsewhere. Only Pune-based software services players like Zensar, KPIT Cummins,
Tata Technologies or Cybage Software came into our purview. We, however,
included software MNCs whose only or major ODCs in the country are located in
Pune: thus Kanbay India, BMC Software, Selectica and eGain made it into the
list, while Persistent makes it by virtue of its unique model of developing
products only for other software companies.
Our choices were not motivated by sheer desire for economy so much as our
desire to recognize the efforts of a number of small but innovative product
companies: these include Compulink, ESOP Direct, Kalzoom, Seacom, and Synise all
of which chiefly targeted the domestic market. More surprises were in store for
us with companies that had gone for the international market: Pace Soft, Impact
Systems, Cashtech, Kenati, eQ Technologic for business warehousing tools.
Dataquest does not claim that this list is exhaustive, but all the same, it
is a salute to the real foot soldiers who are making Pune a vibrant IT city.