[color=red]IT Fleeing from Bangalore ... Hyderabad ... Next?! /color]
Why are IT firms fleeing Bangalore?
[ THURSDAY, JULY 29, 2004 06:16:16 PM ]
Is it the end of Infotech industry's honeymoon with Bangalore? High attrition rate and poor infractructure are making IT majors rethink their expension plans in the Garden City
NEW DELHI: The first few things that come up when we talk of Bangalore are the 24x7 work and leisure culture of the bubbling city, the modern IT work stations of some of the most respected names in the IT space, the young face of the desi Silicon Valley, the gyrating discotheques and the swinging pubs. Is Bangalore the ultimate identity of a modern, tech-savvy and GenX India?
Well the fact is that two of the biggest scions of Indian IT world who helped Bangalore to steal international headline have conflicting views on Bangalore's present and future though they seem to cherish the city's past. Azim Premji seemed frustrated by Bangalore's poor infrastructure, high rates of employee attrition and fat salary bills as he followed up his company's result to say that Wipro's future investments would be made outside Bangalore for "there are opportunities outside Karnataka where talent is available, infrastructure is better and wages are lower".
But the Infosys think-tank NR Narayanamurthy was not a happy person to digest this outburst against the city that cradled and realised his dreams of setting up the biggest IT conglomerate of the country. Murthy said: "There is no need to get agitated. I am confident that all problems can be solved through discussions. If the government specifies what it wants from the industry, Infosys will be the first to do it. The industry and the government can work together for a better Bangalore."
Though Murthy seems to see the sunny side of Bangalore, the reality remains that the garden city where the average temperature never used go beyond 25c is in one of the worst stages of climatic transition with pollution choking the breath out of Bangloreites. Water scarcity, power failures and a very industry unfriendly work culture are driving IT and BPO firms like Wipro, iGate and MphasiS to look towards cities like Chennai, Hyderabad and even Hubli, to expand operations.
However, it is unlikely that these bigwigs are moving out to other destinations just for these reasons, the undertone to this migration seems to be the rising competition. Around 200 MNCs present in Bangalore are luring the talent away from Indian IT bellwethers with better salaries and truly international work culture and exposure. Some of the MNCs have been sending the salary structure of the city topsy-turvy, offering 150 per cent jump in salaries at the junior and middle levels and up to 300 per cent hikes at senior levels.
TG Ramesh, head of BPO operations of iGate says that the attrition rate is almost 25 per cent higher in Bangalore compared to other cities and iGate is looking at Chennai and Hyderabad as possible sites for future expansion. Most of the IT heads are of the view that the IT pros will be on the losing end in the long run shifting to MNCs that are mostly doing back office job unlike the Indian firms that concentrate on software development and programming work and offer long standing employees with stock options also.
But as Murthy is bullish on Bangalore so is Nandan Nilekeni, his partner in Infosys. The company believes that Indian firms should touch international standards not only in services provided but also in salaries and contribution to the city in which it is based. Nandan Nilekani, who headed the Bangalore Agenda Task Force for five years is stressing on private-public participation to improve civic amenities.
So, is it the end of Infotech industry's honeymoon with Bangalore? Either way it may be good for the Indian economy as this will help localisation of the IT sector which becoming more and more concentrated to a few hubs.
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From "indiatimes"
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