Another Day in Global Mktplc

/// Bangalore boom

Ever wondered why some of the military classics were never taught to the masses!?
Jiang Tai Gong rule: Never let your future competitors use your knowledge or weapons against you.

In this stage of global economy, we all hope that exchanging knowledge creates a positive state of cooperation and innovation.

US companies brings in foreign workers, hoping that its cost-cutting measures would increase their productivity and performance. @ the same time, they do not think these ppl would not reveal any of their technical secrets to their own countrymen.

US companies have a tendency of missing the long picture. Thinking that they have the market on innnovation.

It's as bad as some of the martial arts teachers thinking that only Asians can do martial arts or read Sunzi AoW.

Always believe at some point of time, the East Indians and Foreign-born Chinese would be tired of the ill-cultured Americans and leave. Remember. ... most of the Japanese businesses has left for South America in the late 90's.

Remember ppl telling the masses that the foreign Chinese and East Indians cannot speak English as good as the Americans. No one speaks e-bonics as good as Americans.
Say, where has those specific English-speaking customer services jobs gone to?

If westerners can master eastern strategy and martial arts, what makes the westerners thinks that "Innovation and branding" cannot be culturally taught.

@ the end, never underestimate your competition.


Regards,

CARDINAL

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Posted on Sun, Dec. 04, 2005

Bangalore boom
TECH HUB ASPIRES TO MATCH VALLEY IN INNOVATION
By John Boudreau
Mercury News

BANGALORE, India - Drive along Hosur Road -- Bangalore's version of Highway 101 -- even at 1:30 a.m. and you'll see sparks from welders working on new buildings to house software companies. Pick up any newspaper and read ads from tech companies seeking -- imploring --
engineers to come work for them. Experience the Silicon Valley-style, masters-of-the-digital-universe attitude permeating Bangalore, from its impossibly jammed roads to the new dot-com-like offices.

"We think we will overtake Silicon Valley,'' said Vineet Shrivastava, bid manager at the Bangalore campus of Dutch tech services and wireless company LogicaCMG. ``You can see it for yourself.'' <<< ====

Bangalore, the tech center of India, is booming as the Bay Area once did, becoming a world-class hub for tech jobs, economic activity and, increasingly, innovation. While Silicon Valley still retains a hold on high-end tech jobs, countless lower-level positions, particularly in software -- and now some sophisticated research and development work -- are shifting to this city of 6.5 million in southern India. The emergence of Bangalore -- and of India -- as a tech power signals a new world economic order that is both opportunity and threat to Silicon Valley.

A new challenge

The opportunity comes from the ability of U.S. companies to tap India's abundant technical brainpower and its fast-growing market for tech products and services. The threat is immediately obvious: Jobs involving a range of engineering and technical abilities, once plentiful in the valley, have migrated to India. The long-term prospect is that India could some day compete with Silicon Valley as a center for innovation.

"Silicon Valley should be concerned," said Rafiq Dossani, senior research scholar at Stanford University and an expert on India's tech explosion.

Bangalore, he said, could ``start to look like Silicon Valley
five to 10 years down the road.''

For now, ``second-level'' engineering work that is not at the top of the innovation ladder is increasingly being done in India, Dossani said. These include customer service, software quality control and general programming. ``All of that is moving out. And that will just continue,'' he said.

Silicon Valley has always thrived when faced with challenges, and most observers believe that will continue to be true. This region is the epicenter of the venture-capital industry, a constant funding source for new ideas, world-class universities and a network of companies and technology brains unmatched anywhere, observed Ash Lilani, head of Silicon Valley Bank's global division.

``In many ways, the success of Bangalore is in part due to the fact people in Silicon Valley are willing to work with them,'' said Christopher Thornberg, senior economist of the UCLA Anderson Forecast.

Last year, companies operating in Bangalore exported $6.3 billion in software and services, more than 35 percent of the total $17.3 billion in software and services exported from India. Such exports from the country are expected to jump by as much as 35 percent this year, said B.V. Naidu, director of government-run Software Technology Parks of India. This year, India's overall tech industry is expected to have revenues of more than $28 billion -- more than triple the amount five years earlier.

Multinational companies have played major roles in the tech revolution. As many as two-thirds of all Fortune 500 companies are estimated to have outsourced operations to contractors in India.

Silicon Valley `magic'

They also have shaped the tech industry by setting up large campuses. Oracle has a staff of 7,000 engineers and other professionals in India; German software maker SAP invested $1 billion in India in 2004 alone and has nearly 2,000 employees in the country, most doing research and development. Intel employs about 2,800 tech workers in Bangalore. Cisco recently announced it was investing $1.1 billion and tripling its staff in India, from about 1,400 today to more than 4,000 within three years, to develop products for the Indian market.

In the early 1990s, less than $100 million a year in foreign investment flowed into India; today, it's about $5 billion, said Narendra Jadhav, head of economic research for the Reserve Bank of India.

And Silicon Valley companies -- from start-ups to giants like Oracle -- are helping drive the change, scrambling to hire ever more engineers and putting up gleaming new buildings. They are trying to import the Silicon Valley ``magic,'' infusing the new cubicle culture with the risk-taking spirit of innovation and creating colorful offices with recreation rooms for pingpong and yoga.

``Once the Silicon Valley companies came in and introduced stylish offices, Indian companies couldn't be left behind,'' said architect Jessy Jacob, whose business has exploded since the Americans started arriving en masse in recent years. She's been hired to create offices outfitted with polka-dot walls, beanbag chairs and basketball hoops.

Nightclubs are packed with techies: See the young engineers with iPod earbuds dangling from their ears, the young call-center women in low-hugging designer jeans, the recruiters working the scene to snag new talent for their American employers.

To be a young and talented tech worker in India is, well, to have been a young and talented tech worker in the valley in the late 1990s. They are showered with double-digit pay raises and multiple job offers, and encounter headhunters devising ever-more-creative ways to track them down, such as randomly calling extensions at software companies.

"A lot of employers don't want to be located in the technology parks,'' said Rishi Das with CareerNet Consulting, a headhunter firm in Bangalore. ``They can't take the risk of recruiters meeting their employees in the lift every day. Companies are skeptical about putting the names of their employees on their Web sites because they are afraid people will contact them about
a job change.''

By valley standards, where most engineers typically earn between $79,000 and $125,000 a year, workers in India are still a bargain, though escalating salaries could eventually reduce that advantage. Salaries range from about $7,000 a year for the most entry-level engineers -- known as ``freshers'' -- to $25,000 to $30,000 for experienced engineers.

Bangalore has become a critical part of many tech companies' strategies to tap into a large pool of inexpensive workers to compete globally, and mine new markets. India's superb higher-education system, including the prestigious Indian Institutes of Technology, produces more than 100,000 technology workers every year, according to the National Association of Software and Service Companies in India.

Excitement in the air

In the global economy, tech companies, large and small, must have a presence overseas if they hope to sell into different cultures.

"It is, and it will become, a much more competitive world,'' said Bryan Stolle, chief executive of San Jose-based Agile Software, which has operations around the globe, including Suzhou, China, and Bangalore. "That genie is out of the bottle. Nothing is
going to change that."

In late September, Silicon Valley Bank, whose Bangalore operation is dubbed ``Sand Hill Road East,'' sponsored an event for valley venture capitalists. More than 50 showed up. Some were even willing to make the 30-hour trip to Bangalore, whose small and dilapidated airport limits daily flights, in coach rather than first or business class.

"People do whatever they can to get here," Silicon Valley Bank's Lilani said. ``There is so much energy here. There is excitement in the air.''

Lilani often has to pull strings at Bangalore's posh Oberoi hotel to get rooms for VCs flying in to pursue deals; they meet for power breakfasts at the Oberoi's restaurant, an upscale version of the valley's Buck's restaurant in Woodside.

A Bangalore strategy enables companies to grow quickly.

Take NetDevices, a Sunnyvale-based networking company started by three former Cisco engineers. The company, which has created a new type of networking device that combines disparate communications services, does the bulk of its product development in Bangalore. With 125 employees in India, including 100 in Bangalore, NetDevices has been able to hire more employees than it could in Silicon Valley. That has helped the company ship its first product in 18 months.

If most of the jobs were based in the valley, the company would have had a smaller staff and would have needed three to four years to ship the first product, said Vice President Uday Birje.

``The India factor plays a key role in NetD, and not just engineering, but also marketing and services,'' he said.

Smaller companies, in particular, hope to use Bangalore as a base for innovation.

Access to new markets

``The R&D is done here. The development is done here,'' said Nav Bhullar, president of San Jose-based Wyse Technology's India operations. Wyse is creating the software code for a new generation of low-cost, handheld computing devices in its elegant Bangalore complex that houses a staff of 161, including 71 engineers. The Bangalore team is expected to double within a year.

In just three years, Palo Alto-based Symphony Services has grown to a company with more than 2,600 employees worldwide, with 95 percent of them based in India, mostly Bangalore. The company provides software services to U.S. corporate customers, including sophisticated data analysis and modeling.

``This is all leading-edge work,'' said Ajay Kela, president of Symphony Services India, who returned to Bangalore from Silicon Valley two years ago. ``This is innovation. We are moving up the value chain.''

Bangalore also gives companies instant access to new markets.

Santa Clara start-up July Systems provides the software that allows companies to sell content, from ring tones to games, for mobile phones. July Systems develops its product completely in Bangalore, where all its engineers are located. Being in Bangalore is key to understanding the exploding Asian cell phone market, said Guruprasad Krishnamurthy, director of product management.

``We get input from Asia about where the markets are headed,'' he said.

The global economy is bringing new wealth to a historically poor country.

Upscale shopping malls are going up. Housing prices are exploding; in the elite Palm Meadows residential enclave of Bangalore, a California suburban-style home that originally sold for $120,000 in 2001 now can go for $600,000.

``The market will sustain the appreciation,'' said developer B.M. Jayeshankar, chairman and managing director of the Adarsh Group, which developed Palm Meadows, and president of the local builders association. He expects revenue for the Adarsh Group to triple, from $25 million in 2004 to $75 million in 2005. ``The appreciation might slow down slightly, but the demand will continue.''

Tech money is seen in more modest measures, as well: On the streets of Bangalore, new automobiles, from starter Korean cars to flashy SUVs, are crowding out the three-wheel auto rickshaw taxis. In 2003, Bangalore's Trident Hyundai, which sells cars for the Korean automaker, sold 32,000 vehicles. This year, it will sell 65,000, said Managing Director Samir Choudhry. A college degree and a new tech job is all a young engineer needs to be able to do what his father never could: buy a new car, he said.

``There are days when we deliver 100 cars, so we are open until 12 at night,'' Choudhry said. ``The system is stretched. Everyone is going crazy.''

But the new wealth is also creating problems.

Traffic is choking roads. A 10-mile journey can take well over an hour. Every day, hundreds of new cars are added to potholed streets packed with motorbikes, sport-utility vehicles, horse-drawn carts and cows. Hosur Road is an artery overflowing with tech-company buses delivering their workers to the massive Electronics City, one of Bangalore's most prominent tech parks and home to software services giant Infosys Technologies. The morning traffic report one fall day from Radio City Bangalore, a leading radio station: ``I think it will be chaos!''

The instant wealth in a nation with a literacy rate of about 60 percent, and where 25 percent of the population lives in poverty, has increased class resentments. Activists have protested outside the gates of Infosys to demand the company hire more locals rather than just the graduates of India's elite universities.

Skyrocketing housing costs have forced those not benefiting from the boom to move further away from jobs.

``It's the outsiders who work in IT,'' said Srinivas Bhat, a chauffeur for Wyse Technology. ``Fewer Bangaloreans work in IT. Bangaloreans can't afford the rent.''

Bhat, though, has seen his life improve significantly since Wyse hired him. The company is teaching him computer skills. And he can now afford to send his 6-year-old daughter to a much better school.

His dream for his daughter?

Bhat smiles. He hopes she will become an engineer.
Contact John Boudreau at jboudreau@mercurynews.com or (408) 278-3496.

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REPORT FROM BANGALORE
Lush life for returnees
VALLEY ELITES FIND FASTER PATH TO SUCCESS BACK HOME IN INDIA
By John Boudreau
Mercury News

BANGALORE, India - Bob Kondamoori never dreamed of returning to his homeland.

``No chance in hell,'' said the longtime Silicon Valley entrepreneur and venture capitalist.

But that was before the global economy began to shift, turning India into a destination for the tech elite.

Kondamoori, 44, is part of a new wave of highly skilled Indo-Americans leaving the land of opportunity for a land of more opportunity. One that comes with maids and chauffeurs.

India, which for decades watched its best young engineers and educated workers seek their fortunes in the United States, has begun to benefit from a reverse brain drain. It's now luring technologists and managers back home to participate in the tech revolution and help elevate India on the innovation ladder. The flow of returnees has been a boon to Bangalore -- and other Indian cities -- which have a dearth of professionals to lead a talented but inexperienced tech workforce as the world economic order is re- arranged.

For the returnees, going home often means a chance to make a bigger professional impact or dive into an exciting, challenging new venture. They also get to be near family once again, and enjoy a lifestyle in a country where their incomes go a lot further. For those going from Silicon Valley to Bangalore -- a city of 6.5 million in southern India -- it even means returning to an area with temperate Bay Area-like weather.

Wake-up call

The return to India has coincided with a stagnant job market in Silicon Valley over the past several years.

The reverse brain drain to India serves as something of a wake-up call to Silicon Valley, which has already lost seasoned tech professionals to their homelands of Taiwan and China, that it faces growing competition for talent from these emerging tech powers.

``To the extent that there is more equitable distribution of brainpower around the world, it is good,'' said David Heenan, a former senior executive at Citigroup and author of ``Flight Capital: The Alarming Exodus of America's Best and Brightest.''

``The downside of it, from a more parochial point of view, is that no country can afford to allow its best brains to walk out the door.''

The talent ebb presents gains and losses for valley tech companies. Santa Clara start-up Ketera Technologies, for example, believes it benefits immeasurably by having its Bangalore operation headed by Indians who once worked in the valley.

``What Ketera has in India is an extension of the culture we have built around start-up companies'' in Silicon Valley, said Stephen Savignano, Ketera's chief executive.

Competitive threat

But, he admitted, the valley could be competitively threatened someday if returnees start their own ventures -- and operate independent of Silicon Valley. ``If it turns out a lot of people go out there and start companies and don't interact with Silicon Valley companies, there probably will be some drain,'' Savignano said.

There are no official numbers on how many Indo-Americans have returned to their native country. But Silicon Valley Bank, which has a Bangalore office, estimates it's more than 100 a month. Sky 2 C Freight Systems in Union City helps move about five Bay Area families back to India every week, said the company's president, Tarun Tandon. Business from these well-to-do families, he added, began in the past year or two.

Former valley residents now in Bangalore occupy high-level positions at Oracle, Cisco Systems, Amazon.com, Intel and Sun Microsystems. They head start-ups and work as venture capitalists.

Kondamoori is chairman and chief executive of Xalted Networks, which relocated most operations to India after failing in the United States. The Mountain View-based telecom company sells broadband equipment in India and Europe and is expected to garner $35 million in revenue this fiscal year. Kondamoori, his wife and daughter sold their home in the Fremont hills and moved into an apartment in Bangalore while their nearby penthouse and getaway farmhouse, are built. ``It's like a rebirth,'' Kondamoori said.

``I moved to the Bay Area in 1982,'' he said. ``I saw the whole genesis of Silicon Valley. I came back to India because I see the same kind of growth starting up here. Something is going to happen big. You can feel it.''

``I get résumés from guys in Silicon Valley, `Hey, can you get me a job in India?' '' said Shekar Rao, director of sales and marketing for Texas Instruments in India who still has a home in the Bay Area. ``There is a shift in the gravity of innovation eastward.''

Late last year, former Silicon Valley resident Nav Bhullar arrived in Bangalore with just a cell phone -- and a mandate to set up a state-of-the-art research and development center for San Jose-based Wyse Technology. Wyse is creating the software code for a new generation of low-cost, hand-held computing devices and now has a team of 161 in Bangalore.

``There is a rhythm to the place -- the frenzy, the mad rush, the number of IT companies coming here,'' he said, looking out his window at a horizon filled with new tech buildings. ``Even the cows understand the rhythm.''

Though the salaries may be lower, the returnees get a significant lifestyle upgrade: Big homes staffed with maids, cooks and drivers, who cost a total of about $200 a month. Kondamoori's 16-year-old daughter attends a private school and has a private tutor, who costs $100 a month.

On a late September evening, Sanjay and Tulsi Swamy, and their 8-year-old son, Ashwin, strolled through their Bangalore subdivision, a new California-style gated enclave called Palm Meadows. They pass the homes of other Indian returnees from the Bay Area -- software executives from companies such as Cisco and Oracle.

Crossing cultures

They walk by the swimming pools and gym to get a bite to eat at the clubhouse. On weekends, the family orders from Pizza Hut or Domino's, which delivers on scooters. ``You can get four personal pan pizzas for something like $5. For an extra dollar, you can get four ice creams and a bottle of Pepsi,'' said Sanjay Swamy, who is general manager of Ketera's Bangalore operations. His wife, a certified public accountant, works as a corporate finance consultant.

The returnees fill critical roles for U.S. tech companies in India, which need experienced managers and tech professionals, people who understand both cultures.

India's economic reforms in the early 1990s, which stripped away regulations discouraging the growth of tech companies, combined with its strong educational system, led to the explosion in its outsourcing industry that writes software and does back-office processing for U.S. and other foreign companies. Now, returning Indians hope to help the country move further up the innovation chain.

The move back to India isn't without difficulties, though.

The India they are returning to is not the India they left. The gap between the educated and the poor is even more stark.

Beggars holding babies huddle at the security gates of a shimmering Intel office tower on Airport Road. Tech workers with money to spend are driving new cars, adding to roads already choked with every vehicle known to humanity: bicycles, motorbikes, trucks, horse-drawn carts, as well as wandering cows. Two-lane roads become six lanes of traffic as commuters haphazardly force their way forward.

``The road infrastructure, you'll think it's like 25, 50 years behind everywhere else in the world,'' said Ajay Kela, who left the valley about two years ago to head up the India operations of Palo Alto-based Symphony Services, a software company. His Bangalore commute of less than 10 miles takes 1 1/2 hours.

The returnees also learned the hard way that the valley's individualistic work world isn't easily replicated.

``It was a culture shock for me to see how little Indian software engineers are geared to think outside the box,'' said Anand Adkoli, who once held senior technical positions at Oracle and now runs his own company, Liqwid Krystal, which trains and tests programmers online.

`Mercenary mentality'

``I was used to Oracle -- you brainstorm something, you white-board it, then each one picks up a few tasks. You think it through and build it,'' he said. ``Here, people are used to being given a design, an actual document that says this is how things are going to work.''

They also weren't prepared for the difficulties of hiring and retaining talented engineers. The frenzied demand for tech workers has created a job-hopping culture that surpasses anything Silicon Valley has experienced, the returnees say. ``In Silicon Valley, people say, `We want to change the world.' In India, the guy says, `Change my paycheck,' '' Kondamoori said. ``It's a mercenary mentality.''

Sanjay Swamy admits he's always on the lookout for seasoned engineers to hire. He recently recruited one while waiting in line at a cricket match.

Swamy, 41, said he's been given more responsibilities much earlier in his career than he would have had he remained in Silicon Valley, where he was an executive at Cupertino-based Portal Software and Xerox PARC. He manages an office of 80 engineers in Bangalore for Ketera of Santa Clara.

The job means having an always-on internal clock. It's not unusual for Swamy to be working on his home computer late at night -- so he can be in sync with his Silicon Valley counterparts. And he feverishly taps out e-mail on his BlackBerry during his daily chauffeured ride to and from work. ``I go to bed at 1 a.m. so many times,'' Swamy said. ``It's a strain on everybody's life.''

The returnees miss Fry's Electronics, Barnes & Noble, the Bay Area's accepting social milieu.

``There are a lot of unwritten cultural rules here,'' said Sasikala Kondamoori, wife of Bob Kondamoori. For example, it is not acceptable for a woman of her age, 40, to get a drink in a bar, she said. ``I have taken a lot of steps backward.''

On the other hand, she loves Bangalore's warm culture and shopping in the street markets, which sell everything from saris to spices. In the Bay Area, she was a graphics designer. Now she is pursuing her love of food by writing cookbooks, including one on low-fat Indian fare.

``This is a culture in transition,'' Bob Kondamoori said. ``There is the orthodox culture, and now the Western culture is coming in. We are a lot more free with people in their 20s than people our age.''

The returnees are still adjusting to the idea that home has become home again.

``Fifteen years ago for me, it wasn't even an option to not go overseas,'' Sanjay Swamy recalled. ``The only reason I would not have gone overseas is if I couldn't get a visa to the U.S.''

He and his wife took a sabbatical to their homeland during the downturn in Silicon Valley before they made their move back in 2003. They had just remodeled their ``dream'' home on Lucia Road in Cupertino. They were stunned to see the profound transformation occurring in Bangalore.

``The world changed,'' Tulsi Swamy said. ``All of a sudden, we are here.''
Contact John Boudreau at jboudreau@mercurynews.com or (408) 278-3496.

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