Pioneers of a global economy

Date: Monday, October 14, 2002 8:35 AM

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I copied some factoids from these two articles that are quite interesting.
The first one is my favorite:

*** For those who stay in India, the Microsoft work environment is the next
best thing to being in Redmond.

* Hewlett-Packard employs 2,600 people in India. Dell Computer has a staff
of 800. They are just two of more than 1,000 high-tech companies --
including Cisco, IBM, Intel and Microsoft -- that have call centers,
software development units or other operations in Bangalore, a southern city
in an area known as India's ``Silicon Valley.''

* On average, Indian programmers work for one fourth what their American
counterparts do. For example, an Indian software coder with three years'
experience makes $17,000 compared to a U.S. salary of $67,000, according to
statistics published in April by Forbes magazine.

* From its headquarters in New Delhi, Microsoft India now employs 350 in
seven cities, including two -- Bangalore and Hyderabad -- where the company
is expanding.

* ``The next five years,'' Kaul added, ``should see India emerge as
(Microsoft's) third largest subsidiary in Asia'' -- one that could become a
``.Net offshore superpower.''

* At home, Microsoft has also led the charge to bring Indian nationals to
work in the United States. Between October 1999 and February 2000, the
company obtained 362 H-1B visas from the Immigration and Naturalization
Service, making it the U.S.'s sixth-largest importer of Indian employees for
that period.

* In Hyderabad, a city in the country's south-central region, Microsoft's
India Development Center employs 120 young programmers -- few older than
23 -- who enjoy the same free pop and private offices that their American
counterparts do.

* ``The replication of Microsoft's culture has been possible because many
people who worked in Redmond for many years have moved back to be part of
the India Development Center,''

* Known as India's ``Silicon Valley,'' the burgeoning city of Bangalore is
home to India's largest software technology park and more than 1,000
high-tech firms -- many with familiar names such as Cisco, Dell,
Hewlett-Packard and Intel.

* The average salary for a programmer in India today is one fourth what it
would be in the United States.

http://www.eastsidejournal.com/sited/story/html/106839

Pioneers of a global economy
2002-10-01
by Cydney Gillis and Sakina Sadat Hussain
Journal Reporters

Need help with a new Hewlett-Packard or Dell computer?

If you dial the number for technical support at either company today, a
person will answer and start walking you through your computer problem one
step at a time -- possibly from a call center 12,000 miles away in
Bangalore, India.

Welcome to the global economy: Hewlett-Packard employs 2,600 people in
India. Dell Computer has a staff of 800.

They are just two of more than 1,000 high-tech companies -- including Cisco,
IBM, Intel and Microsoft -- that have call centers, software development
units or other operations in Bangalore, a southern city in an area known as
India's ``Silicon Valley.''

Bangalore and other high-tech hubs such as Hyderabad, another city in the
south, are success stories that India has worked hard to create.

In 1991, India threw open its doors to foreign investment and now offers a
bonanza of benefits and tax incentives to software companies such as
Microsoft, which employs 350 people at an Indian subsidiary it founded in
1990.

``Microsoft was one of the first multinational corporations to open shop on
Indian soil,'' Microsoft India's managing director, Rajiv Kaul, wrote in an
e-mail.

``Way back in 1990, when we started operations in the country,'' Kaul added,
``the information technology industry was still at a nascent stage. We were
among the first few players in the field that helped define the landscape by
investing in people and the channel/distribution network.''

Those investments and the partnerships built around them have ``helped
create an entire industry around our business,'' Kaul said.

The results are dramatic.

Today, with software shipments up 23 percent over last year's gross of $5.1
billion, India is one of the world's largest software exporters and one of
the top spots for companies to outsource programming, Web services and other
functions.

Kaul credits the growth to India's highly educated information technology
(IT) work force, which has nearly doubled to 430,000 professionals from
220,000 just two years ago. It's the second largest pool of technically
qualified, English-speaking workers outside the United States -- and, Kaul
noted, they're available at low cost.

On average, Indian programmers work for one fourth what their American
counterparts do. For example, an Indian software coder with three years'
experience makes $17,000 compared to a U.S. salary of $67,000, according to
statistics published in April by Forbes magazine.

How is it that India, which only has a 50 percent literacy rate and a huge
rural population, has become a global source of software engineers and one
of the world's top three software exporters?

The foundation was already there. India's schools emphasize mathematics and
use English as the primary language of instruction. Then, with privatization
of education in the south, a multitude of undergraduate institutions sprung
up specializing in computer and information science.

``To top it all, these cities have the advantage of a `network effect,'''
said Santhosh Matthew, 35, a software engineer from Bangalore who now lives
in Bellevue.

Matthew added that Bangalore's emergence as the ``Silicon Valley of India''
prompted other cities in India -- including Hyderabad, Pune (in western
India) and Noida (in northern India) to recognize that investments in
information technology can create jobs and wealth.

The result is that software centers now flourish throughout southern India,
backed by an influx of foreign investments.

Matthew likened southern India's emergence as a hub of technology activity
to Detroit's reputation as a major car-manufacturing center.

``Once a support system is established it attracts new businesses, which all
feed off each other and develop a symbiotic relationship,'' he said.

Apart from education, government support and infrastructure are vital for an
economy to thrive.

These were exactly the factors that Sharmilli Ghosh, considered when she
left her job at Microsoft to launch her own company in 1998 -- an Internet
consulting firm in India.

``My one and only choice was Hyderabad,'' Ghosh said. ``Not only was (the
state of Andhra Pradesh's) chief minister Chandrababu Naidu's government
offering tax breaks and efficient infrastructure, but he was personally
taking time out to meet young entrepreneurs like me and hear us out even
when our businesses were at a nascent stage.''

This attitude has brought both political and economic gains for Naidu, who
even today is leading the state along the IT path, vigorously promoting the
establishment of high-tech industries, and applying information technology
to create what he calls a ``SMART (simple, moral, accountable, responsive,
and transparent) government.''

Hyderabad's emphasis on training skilled technology workers has attracted
many U.S. companies who are looking to outsource IT work. The fact that
English is widely spoken in India as well as the country's time-zone
difference has also helped.

S.M. Krishna, the chief minister for the southern Indian state of Karnataka,
has also been instrumental in ushering the technological boom in the
Bangalore area.

But it is not all about infrastructure. Some think culture too, has a role
to play.

``I think that the mindset and attitude of the people of south India is an
important aspect to consider,'' said Narayana Allampallam, who works in one
of the Bellevue offices of Microsoft. He traces his roots to Tamil Nadu, a
southern state.

Most South Indians are inclined to study pure sciences and pursue
well-paying and challenging jobs, he said.

``I think as a people we are career-oriented professionals with good work
ethics -- and we like the idea of being financially comfortable,'' he said
with a laugh.

INDIA LURES BUSINESSES WITH ECONOMIC PERKS

India's technology sector received a boost in 1991, when the nation adopted
economic reforms to attract foreign investment.

Since then, encouraging technology growth has been ``an action point (that)
has consistently enjoyed the government's support,'' says Rajiv Kaul,
managing director for Microsoft India.

Among key programs and tax incentives Kaul cites:

* Software Technology Parks: India's Department of Electronics has set up
autonomous organizations, the largest of which is in Bangalore. They provide
benefits to foreign software companies, including a reduction in what the
firm is required to export (normally 100 percent of what it produces in
India) and exemption from a Minimum Alternate Tax.

* Export Processing Zones: Inside a government-created export zone, a
company can be 100 percent foreign owned. Firms are expected to export 75
percent of what they produce and can sell the balance in the domestic
market. Other incentives include cash subsidies, a tax break for five years,
and exemption from income tax on export profits.

* Piracy protection: Authorized sellers of imported software are allowed to
reproduce software in India and sell it without import duty. Local software
manufacturers are exempted from excise taxes.

* Depreciation on products: Firms can take 60 percent annually to compensate
for quick obsolescence of software.

* Customs duty exemption: All software used within the high-tech sector is
100 percent exempt from customs duty.

INTERNATIONAL ECONOMIC RELATIONS TECHNOLOGY DESCRIPTION STUDY TEACHING
COMPUTER SCIENCES EASTSIDE IMMIGRATION EMIGRATION PHOTOS by Maxwell
Balmain/Journal: 1) J.A. Chowdary, a leading proponent of India's technology
industry, is also president and managing director of PortalPlayer, a company
that operates in three high-tech centers, drawing on the benefits of all
three: Hyderbad, India; Santa Clara, Calif.; and Kirkland. 2) The soaring
interior of the Hi-Tech City in Hyderabad, India, shows how far India has
come since throwing open its doors to high-tech investment just 10 years
ago. Today, India is one of the biggest software exporters in the world.

http://www.eastsidejournal.com/sited/story/html/106981

Pioneers of the global economy: Part II: Microsoft India changes landscape
2002-10-02
by Cydney Gillis
Journal Business Reporter

The road to Microsoft's future travels through the ancient lands of India.

That future is a $10 billion initiative called Microsoft .Net, which the
Redmond software maker started rolling out this year to automate computer
processes over the Internet.

Key pieces of the new system have and will come from India, where Microsoft
was one of the first outside corporations to open an Indian subsidiary in
1990.

>From its headquarters in New Delhi, Microsoft India now employs 350 in seven
cities, including two -- Bangalore and Hyderabad -- where the company is
expanding.

``India is definitely one of the fastest growing subsidiaries for Microsoft
in Asia,'' Rajiv Kaul, managing director of Microsoft India, said in an
e-mail.

``The next five years,'' Kaul added, ``should see India emerge as
(Microsoft's) third largest subsidiary in Asia'' -- one that could become a
``.Net offshore superpower.''

At home, Microsoft has also led the charge to bring Indian nationals to work
in the United States.

Between October 1999 and February 2000, the company obtained 362 H-1B visas
from the Immigration and Naturalization Service, making it the U.S.'s
sixth-largest importer of Indian employees for that period.

The INS requires H-1B visas for companies to bring high-tech workers into
the country. Companies have to apply for the visas on behalf of the workers,
a process that can take several months.

For those who stay in India, the Microsoft work environment is the next best
thing to being in Redmond.

In Hyderabad, a city in the country's south-central region, Microsoft's
India Development Center employs 120 young programmers -- few older than
23 -- who enjoy the same free pop and private offices that their American
counterparts do.

Founded in 1998, the IDC, which is supervised directly from Microsoft
headquarters in Redmond, is only the second programming unit the company has
opened abroad. (The first opened in 1991 in Haifa, Israel.) It takes up half
a floor of a futuristic building in Hyderabad's Hi-Tec City, one of India's
government-created ``software technology parks.''

The IDC is currently undergoing a three-year expansion at a cost of $50
million. Plans call for doubling the number of today's programmers, whose
neighbors at Hi-Tec City include some 12,000 employees of General Electric,
Oracle and Vanenberg.

``Think about (the IDC) as Building 1001. It happens to be 10,000 miles
away,'' said Sivaramakichenane Somasegar, corporate vice president for
Microsoft's Windows Engineering Services Group.

Microsoft's offices at Hi-Tec City not only recreate the look but also the
feel of Microsoft's headquarters. In an e-mail from Hyderabad, Srini
Koppolu, the IDC's general manager, said each programmer is free to take an
idea to top managers at any time -- an open-door policy not common at Indian
companies.

``The replication of Microsoft's culture has been possible because many
people who worked in Redmond for many years have moved back to be part of
the India Development Center,'' Koppolu wrote.

That culture extends to a new .Net Technology Center founded in August 2000
in the southern city of Bangalore at a cost of $4 million.

Known as India's ``Silicon Valley,'' the burgeoning city of Bangalore is
home to India's largest software technology park and more than 1,000
high-tech firms -- many with familiar names such as Cisco, Dell,
Hewlett-Packard and Intel.

That includes the .Net Technology Center and its 20 consultants. Equipped
with computers provided by two partners, Unisys and EMC, they work to assist
Indian firms create Web services that run on .Net.

By the end of 2003, the center plans to train 1,000 programmers in .Net
through courses run by India's Institute of Science.

Kaul and Koppolu -- another Louisiana State graduate who joined Microsoft in
1989 -- say India was a natural choice for Microsoft not only because of the
high level of technical education and command of English, but the many
advantages of the no- or low-tax technology parks and other government
programs for foreign companies.

India's lower wages also played a role. The average salary for a programmer
in India today is one fourth what it would be in the United States.

It's a salary, however, that puts a programmer in the growing middle class
of India, where the majority of the country's more than 1 billion people
live in extreme poverty.

``Technology is the agent of change, there is no question about it,''
Koppolu said of India's computer industry.

When the country threw open its markets to foreign investment in 1991, he
added, ``That brought better technology at reduced prices, which resulted in
more people being able to afford products.''

``The cycle of market forces in action has begun,'' he said. ``We can see
this in consumer goods like televisions, VCRs, stereo systems (and) washing
machines ... The Indian middle class is now able to afford many of the
things that only the rich people could afford before. You can see this
impact not only in the cities but also in the smaller towns and in some
villages, too.''

Still, ``India is an amazing contrast of poverty and prosperity,'' Koppolu
added. ``No place or person is isolated from this'' -- one reason why
Microsoft India contributes to programs geared toward education,
particularly for the disabled.

India's high quality of education, and the emphasis parents place on it, is
a prime reason for the success of the country's programmers.

The result, Kaul said, is a national success.

It's a story, Kaul wrote, that ``has made the Indian middle class more
prosperous and has given birth to the dream of a software engineer in every
home.''

INTERNATIONAL ECONOMIC RELATIONS EXECUTIVES PROFILES PHOTOS by Maxwell
Balmain/Journal: 1) Rajiv Kaul, managing director of Microsoft India in New
Delhi says in the next five years India should emerge as Microsoft's third
largest subsidiary in Asia--one that could become a .Net offshore
superpower. 2) Srini Koppolu, managing director of the Microsoft Development
Center, Hyberdad, India. Koppoluis well known by all involved in the
computer industry in India. He also makes regular visits to the Redmond
Microsoft campus.

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