Bangalore the Buzz Is Back!

‘‘Those really were the glory days,’’ confesses Vivek Mansingh, head of Indian operations of Ishoni Networks. Founded by two Bangalore boys — one of whom rose from the obscurity of a riverine Karnataka village — Ishoni pulled in about $ 90 million in funding. It may sound like a lot. But for a four-year-old company that hopes to break even only by the end of 2003 — perhaps — and has only one customer in distant Taiwan, this isn’t exactly how it was meant to be. As 2001 rolled in, Ishoni struggled to cut expenses: travel budgets were slashed, and staff at the US office was laid off. In the depths of the downturn, cash-strapped telecom giants were infinitely wary of an unknown Bangalore company.

‘‘They told us the tech is great, but how do we know you will survive?’’ recalls Mansingh, a fast-talking, energetic man. Relief came from the semiconductor arm of Dutch multinational Phillips. Convinced that Ishoni’s tech was invaluable for its future plans, Philips pumped in $25 million into Mansingh’s company.

Today, the future is still uncertain, but Mansingh is more confident. Ishoni is hiring again, travel is on too, except Mansingh still does not fly business class. ‘‘We’re top of the line, but the markets are difficult,’’ he muses. ‘‘I think we’ll make it. So will Bangalore. The city has what it takes.’’

One floor below, Vijaya Verma, managing director of India operations of Alopa Networks, believes her company and her city will pull through. ‘‘Ten months ago, when we really needed a third round of venture capital, it looked like we couldn’t get it,’’ she says. Verma, a pleasant, neat woman with short hair, found that leading-edge tech and a good team was no longer enough. ‘‘We just didn’t have paying customers — well, we had one, and that was Broadcom (the American telecom giant that spiralled into bankruptcy),’’ chuckles Verma. ‘‘It didn’t cut ice with the investors.’’

It had taken Alopa just over a month to get its second round of $10 million before the tech crash. But the third took half a year and lots of convincing. Now, hawk-eyed VCs have granted a third round of $12 million, and with eight paying customers, Verma is newly confident. ‘‘There are still billions out there with VCs, but a vision and passion is no longer enough; we all need to prove that we can translate vision into money.’’

On the ground floor of Broadband Hub, the luckiest of the lot, Sam Mathan, has flown the coop. Amber Networks was bought up by Finnish giant Nokia for a staggering $400 million last October, the worst of times. When The Indian Express caught up with him then, he was planning to ‘‘take some time off’’. Today, a blue Nokia sign doesn’t tell you that Mathan was once here.

From the stories at Broadband Hub, you can glean what’s going on in Bangalore, indeed to all of India’s big hope, technology. Home to more than 1,000 companies — big, small, home-grown, foreign-owned, transplanted, transnationals, whatever — Bangalore was indeed staggered by the tumult of 2001-02. In March, an engineering degree was no longer a guarantee to riches, and many software sweatshops were closing down. Today, it’s quite clear that if the tech and team is good enough to attract customers, there’s still money available for visionaries.

‘‘It is a difficult market, it takes time to raise money, but on the positive side, companies are raising money,’’ notes K.P. Balraj, a venture capitalist. His firm, West Bridge, now looks at funding medium-sized companies that try to make unique products instead of sweathouse coding. If you’re starting out and want a million or two, you’re unlikely to get it. ‘‘This is unfortunate, but a reality,’’ acknowledges Balraj. The deal size: around $ 5 million.

Promise of the Night

SANGEETA Kinariwala dreads the jangle of the phone. The calls come through the night — from Spain, UK, Korea, US and Delhi, where her husband’s team works through the night. ‘‘I’ve just got used to it,’’ she sighs.

Kinariwala’s husband, Amit, works with LG Soft, the software arm of Korean multinational LG. He began life as a software whiz without a college degree. His innate talent has transformed his life from an ordinary scooter-riding software worker to a business head, globe-trotting 15 days a month on average.

For Kinariwala, the downturn was barely a blip. LG Soft’s business of web-enabling enterprises is flourishing, just one of the myriad global niches available if Bangalore looks hard enough. Companies becoming more efficient in the West, and expanding in the East — their technologies needs aren’t reducing, just changing. As these global markets grow, Bangalore techies, VCs and its next generation realise they must intensify the conversion of their salubrious nights into one long 24-hour day.

That could be a problem. The biggest hurdle for India’s most buoyant industry isn’t competition from the Philippines, or the anger of American and British workers who lose their job to graduates in Gurgaon or Bangalore. It’s amma and appa. It’s the midnight shifts. It’s boredom.

K. Made Gowda watches anxiously as his daughter Nalini, 20, listens to a presentation on a training programme for articulate young graduates, the main resource of business process outsourcing, the industry that hopes to make India the back office of the world. ‘‘If you speak in Tamlish or Banglish or Hindustani English, our customers in England or America won’t understand a word you’re saying,’’ says Ravi Kiran, training head of PeopleOne Consulting. He’s addressing Nalini and 20 others crammed into a cabin in the BPO pavilion at the Bangalore IT.com, the city’s annual reaffirmation of tech faith.

Over five days, thousands of students speaking in English merged with a babble of southern tongues thronged the exhibition, set beside a 115-year-old faux Tudor castle. The castle, still owned by the Wodeyar princely family, cost Rs 10 lakh to build — or 1,000 times less than the average contract awarded by American corporate giants to Indian software companies last year.

PeopleOne is offering a 10 per cent discount if you sign up for the training course right now. It will also throw in a Timex watch for free. Made Gowda, a graying, state government health official is worried to the core of his middle-class southern sensibilities. ‘‘It all sounds very good I say,’’ says Gowda with a frown, ‘‘But how will she come home at 4 am?’’

After the presentation, Nalini’s face is flush with excitement. She echoes some of her father’s concerns, but she’s clear about what she wants from the BPO industry. ‘‘It will be difficult working at night,’’ she says, ‘‘but then I don’t want to do this for more than two years.’’

Within the infotech sector, BPO is the rising star. Mainline IT firms held their own and grew at a healthy 22 per cent in this year of international turmoil, but India’s BPO sector expanded at an astounding 67 per cent, helping western customers with everything from credit-card payments to starting a newly brought computer. BPO is also hugely encouraged by governments like Karnataka because of its potential to employ thousands of India’s graduates who increasingly find work hard to come by.

But in Bangalore, where southern conservativeness still coexists uneasily with the city’s global face, BPO’s most critical resource-people-is in very short supply. According to estimates gathered by The Sunday Express, Bangalore needs more than 8,000 call-centre and other executives every month. What’s available is no more than 2,000.

‘‘The work ethic, commitment and education of the people here is a great, great skill,’’ enthuses Andrew Petersen, head of America Online (AOL), which in five months has gone from a staff of six to 1,000. ‘‘But we need more of them.’’ In July, AOL’s call centre centre in Bangalore got its first call from a suburban housewife in Brooklyn, New York; it now serves any of the company’s 35 million US customers.

While raw graduates need to be expertly trained — changed accents and names are just the start — the high-pressure environment, repetitiveness, night shifts and cultural dislocation has become a cause for big concern.

‘‘Hari will become Harry, he will work this Diwali, and he will have a holiday on July 4,’’ says Ajit Issac, CEO of PeopleOne Consulting, which is funded by JP Morgan Ventures. Yes, venture-capital funding for tech in general may be scarce, but it isn’t a problem for the the BPO sector. ‘‘The impact of western culture on the lives of employees, the disruption of personal life and monotony are issues we need to address urgently.’’ He notes that 20 per cent of Karnataka’s 52,000 graduates would like to consider a BPO career, but they would not like to stay for more than two years on an average. ‘‘So from the start, they know they want to leave.’’

The Roads to Perdition

THE roadblocks to Bangalore’s comeback are, well, on the roads. Forget the once-gracious roundabouts clad in gladioli, the avenue trees bursting with yellow laburnum, the bungalows with the distinctive slatted, wooden overhangs they called monkey tops. Bangalore has changed too radically to remember these.

What hasn’t changed from its past are the atrocious roads, the chaotic power and water situation. There’s a wry school of thought that says Bangalore’s tech industry could be loosing millions of dollars a day because of the horrendous traffic jams. Reaching the International Tech Park — with its soaring towers and first-world facilities — from the heart of Bangalore can take an hour each way. Instead of working, engineers being bused there can only be patient.

And the tech park’s admiring foreign nationals rarely realise that much of their water is trucked in at night. As for power, the tech industry’s generators probably churn out power enough to supply half the city. As the climb out of the downturn becomes stronger, there’s no point complaining about these irritants. An occasional flyover might come up, neat tiles might be fixed into pavements, but Bangalore knows it will have to live with these irritants, substantial though they might be.

‘‘These are added complexities you don’t see anywhere else,’’ says Mohan Kharbanda, vice president of Dell Computers. Kharbanda was sent to Bangalore from the US five months ago and oversees the company’s exploding call-centre business: 32 shifts working concurrently, trained and divided by geography as they answer calls from UK, US, Australia and even Thailand.

Perhaps the greatest advantage for Bangalore is that the IT business is no longer just about software. As companies like Dell keep streaming into Bangalore — one multinational has set up shop every month over the last two years — the people they employ are intriguingly diverse. Chartered accountants, lawyers, molecular biologists are just some of the professionals being hired as technology worms its way into myriad businesses worldwide.

As Bangalore’s opportunities grow, its entrepreneurs are gaining a rare sense of camaraderie. They sense a return of the good times, but realise it will be much tougher this time around. Sanjit Shetty, president of the Young Entrepreneurs Organisation explains how from 11 in July 2001, he has 32 companies on board today. ‘‘We meet, expose our members to speakers and experiences they won’t normally be exposed to, and we even pay visits to each other’s units so we can suggest improvements and learn,’’ says Shetty.

It helps that the state is extremely sensitive to changes. Infotech and Biotech Secretary Vivek Kulkarni knows almost every entrepreneur in Bangalore. He works tirelessly at addressing problems, getting companies to network and be prepared for the future. The rest is upto Lady Luck — and maybe Saddam Hussain.