During the last year, Fands has been in a consolidating zone adding newer clients during the slowdown and winning over the few lost in the maddening pace of 07 -08. This has meant traveling across all the major IT centres and getting exposed to the training.
The other day one of Fands' sales executives visited Chennai to meet few of our clients based down south. Seeing the Mahindra city and the excellent suburban train station at Mahindra city SEZ, the overhead train connectivity to Tidel Park, overwhelming presence of new automotive majors namely Hyundai, Renault and Ford it was but natural that he felt that Pune is missing the bus in terms of being a major IT hub in India. It must have been the umpteen times that I had been dragged into the discussion of which is the best city in India for IT organisations.
The fact that after a long time I mean after 12 months (I guess time periods look long in the slowdown) we had an opportunity to undertake a 40 day induction program in Chennai was downplayed by the discussion over which city is best. Enamored by all the other cities our sales team invariably keeps nagging that they would have met their targets easily had they been servicing clients in happening places like Gurgaon, Mohali, and Mysore etc. Telling a young team that you are wrong without sounding either old fashioned or negative is always a challenge. Hence I was looking at some concrete data for analysis and I started wondering about the actual size of the training industry in India and its leading cities. We undertook the resources of few summer trainees from a leading business school in Pune and undertook that project.
The study provided some interesting insights and I thought I should share the same in this newsletter ….
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Most of the old timers in the industry feel that Chennai is the birth place of the Indian IT industry with pioneers including Citibank, TCS and Cognizant. And why should,nt they feel so, for a long time the maximum number of H1 -Bs have always been issued from Chennai. |
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Bangalore overtook Chennai and has a pioneer status for a long time. And while everybody has been cursing the Bangalore infrastructure, Bangalore has silently been extending its market share. Today Karnataka's share in the export kitty is ___% |
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In the late 90's Banglore's exports were 60% more than NCR' exports, while today Banglore's exports are more than 100% as compared to NCR. OOOPs and we thought with central funding as a national capital it always had an advantage over State Capitals. |
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Maharashtra has been a consistent No 2 in the rankings. This is despite the fact that growth of IT industry in Mumbai has slowed compared to other cities. |
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How unfortunate that despite being a long time No 2, neither Pune nor Mumbai is a contender for Bangalore's No 1 spot. As in other spheres of life a long time NO 2 has to do something drastically different to overtake the leader. Can Maharashtra spring a surprise? Looks unlikely. |
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Assuming no growth for Karnataka and a more than modest 15% for Maharashtra, it would still take 4 years for Maharashtra to topple Karnataka as the No.1. |
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In 2002-03, Andhra Pradesh's contribution to the total IT exports was 9.87%. Today the percentage has increased to 14.97%. Soon it can be negligible, if we consider the contribution of Telangana as a state!!! |
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It seems Real Estate prices are not a deterrent to IT organisations. Access to manpower is till a major consideration in selecting IT destinations The so called move to shift to tier 2 and tier 3 cities is not gaining momentum. |
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To cite examples, Kolhapur, Nashik, Vishakapatnam, Vijaywada hardly have exports worth mentioning. According to the grapevines, the only advantage of moving to smaller cities is to recruit locals and bring down attrition levels. |
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On the contrary, tier II cities, where big organisations have set up training centres for Fresh Engineers have shown a lot of traction. To name a few, TCS - Trivandrium, Infosys _ Mysore, EDS- Mangalore |
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The rumour mills state that these cities have been selected to keep the freshers away from the glitz of the metros. And the locals are vociferously voicing their concerns that the Industry is taking the pub culture to the smaller cities. |
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Some how not many Multinational IT organisations have set up development centres in Pune, though it is rated very highly on the cosmopolitan, Education and many other indices |
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Infact big Multinational and Product based organisation have given Pune a skip namely Oracle, Microsoft, Computer Associates, Delloite, Google, Yahoo, Amazon,Motorola etc.. Looks like the lack of approvals for Chakan International airport is hurting Pune tremendously. |
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In spite of considerable increase in Noida, NCR exports have decreased by 9% largely due to huge decrease in Delhi exports which is 66%. The Jaypee groups Noida - Agra expressway will definitely change the landscape for IT companies. |
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According to Nasscom, the revenue of the IT sector has risen from 1.2% of the GDP in FY98 to an estimated 5.5% in FY09. But the revenues of some high end multiplexes, Security agencies and real estate projects have risen substantially because of the IT sector. |
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According to Nasscom, export revenues for the Indian IT-BPO industry are expected to record a growth of 5.5%, to reach USD 49.7 bn in FY 09-10. |