THE SILICON WALLAS : Software genius is brewing in India -- by Mark Drajem Back   Home 

Hyderabad, this ancient Muslim capital at the southern end of the subcontinent's vast, dry Deccan plain, is typically Indian. The streets of this city are filled with 8 million people. Buses and motorcycles blare warnings as they weave around bullock carts and rows of bicycle riders. Holy men, cripples, lepers, and polio victims compete for space along the roads, hands outstretched, silently pleading. Vendors in turbans, long beards, and deep, sun-fed wrinkles scoop out plates of savory biryani, a spicy meat and rice dish, from large mobile vats. But in the rock outcroppings that skirt this city, a shimmering glass skyscraper called the HiTec City has been built by the state at a cost of $375 million. One of the chief promoters of HiTec City is Chandra Babu Naidu is Chief Minister--the governor-of the state of Andhra Pradesh. He sits in his office with his top-end IBM Think Pad 770ED, an electronic tool with which he successfully wooed the World Bank, Lucent Technologies, Oracle, Toshiba, and Microsoft. Naidu is proud of the fact that Bill Gates decided to locate his first software development site outside of Redmond, Washington in HiTec City, India.

"I'm using information technology as a tool to do better development," says Naidu, who believes information technology will help 980 million people leapfrog the nation's chronic poverty. So far, the record is impressive. India now has more qualified computer professionals than any country in the world except the United States. Take, for example, Rakesh Eligapalli, a secondary school student who got together with some classmates and developed a CD-ROM of Hyderabad, its sites, its history and its popular events. It comes with music, graphics, and video clips. They formed a corporation, Jade Microsystem Pvt. Ltd., and Eligapalli became its chairman and chief executive officer. "This is just something I do for fun," he said. With entrepreneurs such as Eligapalli, India's software exports rose from about $1.7 billion in 1997 to more than $3 billion in 1998. And no one laughed when the government said it expects India to have $50 billion in software exports 10 years from now.

Despite the promises of Naidu, though, it's not clear how India will translate computer exports into development for all. Possibly, the opposite will occur: Just as Brahmin priests dominated ancient India and their heirs won the slots in the post-independence engineering and medical universities, high-tech development seems set to further divide India within itself, exacerbating the stunning divide between rich and poor. Despite its renowned university system, for example, India has more illiterate people than all of sub-Saharan Africa combined, according to a recent United Nations report. Massachusetts Institute of Technology professor Kenneth Keniston says India's high tech boom has left out an important section of society, a group he has labeled the "forgotten 95 percent."

The gaps in India are enormous. Indians live in different eras, not economic levels, Finance Minister Yashwant Sinha said recently. Examples aren't hard to spot: Eligapalli, who lives in an expensive, air-conditioned home in the high-rent HyTec City hills, can dabble in computer programming and contemplate a future doctoral degree at an American university. But outside his house, women pad cow dung into small dried cakes as fuel for cooking their dinner.

While Hyderabad is working fast to become India's computer mecca, its cosmopolitan southern neighbor, Bangalore, calls itself the "Silicon Valley of India." Long a research center, Bangalore is home to more than half of India's software exports and much of that is due to Narayana Murthy, who founded Infosys Technologies Ltd. in his garage in 1981 with a small state loan. Infosys is now one of India's largest software firms, developing software for more than 30 Fortune 500 firms, the retailer Nordstrom, and the cellular telephone giant, Adept. The price for a share of Infosys stock quadrupled in the past year, and its ads dominated the front pages of Indian newspapers in mid-March when it became the first Indian company to go public on an American stock exchange with a Nasdaq listing.

The world is taking notice of India's promise. Of the half-dozen company offices awarded Carnegie-Mellon University's Software Engineering Institute's high-quality ratings, four are in India. Last year, the Bombay Stock Exchange reworked its version of the Dow Jones Industrial Average and replaced a few of its ailing heavy manufacturers with Infosys and NIIT, a computer training company. Some of India's information technology successes are so confident that they takover bids from U.S. firms.

India's software companies hire young college graduates and have built in a pool of high-quality software engineers second in size only to the United States. These Indian companies pay as little as 10 percent of what these engineers could make in the United States. In India, IBM pays its local employees about 20 percent of what they would receive in the United States. Infosys starts engineers at $4,300 a year, and some Indian companies pay less. Rohit Nagpal, 26, graduated with an electrical engineering degree, and for three years made picture tubes before joining Infosys. "Software seems like the job of the future," Nagpal told me.

This large pool of cheap talent has attracted major western firms. "There's a drought of software professionals in the world," said Deepak Mukerjee, the head of Lucent Technologies' one-year-old office outside of Bangalore. "We go where the resources are readily available, and India is at the top of that list."

The global talent shortage Mukerjee describes and the wages paid here and in many western countries has drained India of many of its bright young programmers; Indians will receive more than 60,000 six-year U.S. visas limited to computer programmers. "Every engineer will want to go to the United States," said S.V.L. Narayan of Hyderabad's Satyam Computers. "That's just part of our business."

India's higher education system-dominated by a set of fiercely competitive schools-created this large software talent pool, and 90 percent of it is male. Western companies come here to take advantage of the numbers. In Houston, Texas Instruments hired Sham Banerji to come back to Bangalore and assemble a team of 35 engineers to update their digital signal processing system. Digital signal processing is the drag car of processors. It goes fast and straight. It's used in cell phones, modems, and speech recognition software. In just two years his team developed what they now call Ankoor. "We couldn't have done it in Houston," he said. "We couldn't have found enough quality engineers to work on the project."

India's software engineers can work cheaply and quickly, but the rap against their industry is simple and damning: Few are probing new frontiers. About one-fourth of the work at Infosys and Satyam Computers is making code changes for the year 2000. Many companies are simply converting European programs to count the new Euro currency. They talk of "moving up the value chain," but it's clear that for a long time India will remain a low-cost, low-thought "across the border" computer country, performing mid-level work designed by high-paid hotshots in Redmond, Washington, and in Houston.

India's success is dependent on low wages and low levels of invention, says Sunil Sherlekar, a vice-president of Silicon Automation Systems. But Sherlekar is trying to reverse India's computer brain drain by offering new technological challenges and higher pay at a new kind of Indian company.

The offices of Silicon Automation Systems are protected by prickly guards who stand 24-hour duty. Staff swipe their identification cards to enter and to leave. Bags are checked and rechecked. No disks in, none out. Youthful-looking staff are dressed casually and move with an urgenct informality, much like their counterparts do in California. A chandelier hangs in the foyer above black leather couches. The woodwork is dark, lush. Just off the reception room in a small shrine to Ganesha, the elephant god, a lamp burns in homage. Engineers here work long, but flexible hours. Whatever it takes to get the job done. The rooftop cafeteria serves three meals a day. Dinner is at eight.

Sherlekar's 400 employees are doing research usually associated with pimply MIT grads in California garages. Founded 10 years ago by a group of 17 doctoral grads from India's prestigious Indian Institutes of Technology, SAS is one of the six companies in the world to hold a patent for a new, high-speed modem, that is 200 times faster than what is now available. The product created by SAS is sent through its high-speed data links to customers in Singapore, California, and New Jersey. The company expects to sell its modem technology rights to American-based multinationals, but Sherlekar won't name them.

On one floor, the networked computers of the company's signal processing project are building the cutting edge of new speech recognition software. Nearby, others design new microchips.

But that's not even the half of it. On another floor, the American regional telephone company Nortel has installed floor-to-ceiling cabinets packed with what look like the back of stereo receivers all joined by wires, a replica of Nortel's central telephone switches in the United States on which SAS checks out new telephone switching technology as it is written.

After visiting Sherlekar's company it's clear to me that Indian companies can do more. Other Indian industries, such as steel fabricators, are handicapped in the global market by bad roads and cumbersome customs regulations. In the computer design industry, however, location is unimportant. Any disadvantage of being in India is minimized by high-speed telephone lines and direct-data links. SAS can be a Silicon startup that happens to be based in Bangalore. For SAS, location only matters at lunch time, when rotis and lentils, not ham sandwiches, are on the menu.

Still, many of the job opportunities are in India with international companies. International Business Machines searched India for a year before choosing to open offices in the water-stained Stalinist buildings of the prestigious Delhi campus of the Indian Institute of Technology. IBM staff boast that in 100 days they gutted the classrooms and white-washed these walls. Last year, ITT students working with the local IBM staff developed two products for which patent applications have been filed.

A few dozen IBM staffers are developing improved software to track India's dangerous and unpredictable monsoons, and much more. But their meetings here are a mirror of those run at the company's main research station in Watson, N.Y. "We're all speaking English with our Indian accents," said the office director, Alok Agarwal.

In these offices, Agarwal says employees are writing electronic commerce software that IBM expects will create a $200 to $400 billion worldwide business in five years. Automakers and carburetor manufacturers will track inventory on line, just as supplies are sold. Paper manufacturers and paper buyers will conduct on-line auctions.

I remember seeing a Reuters photograph of a delivery man, face is set in grim determination and head wrapped in Sikh's turban, walking down a Bangalore street. One arm is reaches high to steady a hand-woven basket that is balanced on his head. A keyboard and a computer screen stick up over the rim of the rickety basket. More images offer similar Indian juxtapositions: satellite dishes on mud-tiled roofs, a rickshaw passenger talking on a cell phone. A Kenyan diplomat recalled seeing ox-carts stacked with computers on Bangalore streets. Reporting on India's rural reaction to the government's nuclear tests last year, a Washington Post reporter found villagers milling grain with roped-up oxen. In a documentary film, a Bombay stockbroker prayed to a drawing of the goddess of wealth, Lakshmi, which was taped to his computer screen.

As India competes in the information technology field, these images are only multiplying. In sparkling, climate-controlled offices on the edges of each of the country's major cities, international software giants and Indian companies are fighting it out in the global high-tech marketplace. Sitting in their smooth, white offices, India's computer entrepreneurs speak of bandwidth and bytes, just as easily as their colleagues and competitors do at Stanford and in Manhattan. They are primed for the new millenium; they are proactive, they optimize their time, they move up the learning curve. They know the buzzwords. They know the Chicago Bulls.

As a visitor, it becomes easy to nod along, discussing the great possibilities for India and Indian computing. When Agarwal says IBM's electronic commerce will be more than a $200-billion business in five years, I say to myself, "Why not?" It's only walking past the cows eating out of trash bins that an Indian context hits: India's GDP is only $350 billion. Some people here hope that as they enter the electronic age, India will be fully developed as any western nation. All of this activity in the computer industry may, however, just be the latest tool to divide rich and poor in India.

Out of an estimated 900 million people now living in India, 50 million are English-literate. They control the nation's government, education, and economy and they are the beneficiaries of a system set up to help them. To progress, the country's first Prime Minister, Jawaharlal Nehru, said they needed technological expertise. The country invested in higher education, and turned out doctors, engineers, economists, and novelists in great numbers and of great quality. The education system gave India a nuclear program it loudly trumpets as indigenous. It provided the research for the Green Revolution. And it gave the world Salman Rushdie and Nobel laureate economist Amartya Sen. Despite those successes, the country still stumbles along. Despite those successes, India's per capita GDP is about $400 a year.

The government has kept its engineering and science schools exclusive and effective, but by concentrating its limited resources on higher learning, the country has neglected primary education. When Narayan told me every family wants a child working in India's promising computer industry, he was only talking about the 50 million who are English literate. He overlooks 95 percent of India's people.

In Hyderabad, where these juxtapositions are strongest, Chief Minister Naidu said the immense economic possibility means that India has to push the high-tech possibilities, with the hope that the benefits will cascade down. "If you have information, you can make the right decisions," Naidu said. His state will soon be linking each village to the Internet. Farmers can find the best prices for their crops, and without books the children can find information as easily as a child in a U.S. classroom can. Andhra Pradesh has also just computerized its land records, allowing people to register a land sale in minutes, not days or weeks as it took before. Computerization will speed up government action, simplify procedures and, even, control corruption, he said.

In the new Institute of Information Technology outside of Hyderabad, built with help from IBM, Microsoft, Oracle, and Satyam, an S/390 IBM mainframe rests on cool marble and hums along in a central, glassed-in altar. The training center's manager, Dr. Ravi Gorthi, beams as he sips on a Coca-Cola and says their goal is to make sure skilled computer personnel are always available here in India. The noise of construction continues outside his door, as it does all over India. When I left Gorthi's office, I met a road crew supervisor named Rakesh, and asked if any of the children working on the road went to school.

"No," he said. "It's their caste. They only build roads."

A few Indians have hit the hyperspace button. For them, the stars have turned to streaks in the sky, and who knows in what galaxy they'll end up. The other 95 percent of this nation continues to still hold baskets on their heads, or pad dung into tomorrow's fuel.

The author is a freelance writer in Delhi. His article, "Nuclear Kharma," appeared in the Summer 1998 issue of WorldView. He was a Peace Corps volunteer in Zaire from 1990 to 1991.