Chennai's software gains

All eyes were on Bangalore last week as the 'Silicon City' hosted the
country's largest IT show. But just 350 km to the east at Chennai too, it was a
happening week in the software sector. Two global giants - Ford Corporation and
Standard Chartered Grindlays Bank - announced their intention to locate their
IT-intensive operations at Chennai. To top it all, Chennai's IT showpiece, the
1-million-sq.ft Tidel Park, sold out the entire space last week.

Ford has taken up a full floor at Tidel Park and plans to set up an IT center
for its Asia-Pacific operations to Chennai. With an investment of over Rs 200
crore, the Ford center will start with 600 software professionals and expand to
2,500 employees in the next phase. The Chennai center will carry out software
and engineering (CAD/CAE) development for new Ford initiatives, provide call
center support etc. Besides the car manufacturing plant, Ford had moved its
account processing operations to Chennai two years ago.

Equally significant is the decision of the new foreign banking major,
Standard Chartered Grindalys Bank to move its entire back office operations to
Chennai. Prior to merger, Grindlays Bank's credit operations were based in
Chennai while Chartered Bank's credit cards were processed at Bangalore. Now
most of the global back office operations will move to Chennai.

Ford had scouted around the country, including Hyderabad, before deciding on
Chennai. So is the case the banking major. Together these developments indicate
the emergence of Chennai as a significant center for development of software
services and applications. There are already some 600 software companies
registered with the Software Technology Parks of India (STPI) at Chennai. Tamil
Nadu now has more than 1,600 software companies and at least 600 of them are
significant exporters. Majority of them are in the small and medium segment with
just 50 of them with annual revenues of more than Rs 50 crore.

Tamil Nadu government's proactive but quiet investor-friendly moves coupled
with the availability of top quality human resources is paying off. In the last
four years, the State government has removed several hurdles in the path of IT
entrepreneurs and senior administrators have successfully convinced potential
entrepreneurs about the state's potential. The political leadership too has
stood by the administrators to woo IT investors. More or less the process seems
to have been institutionalized. This is good because it will be immune to any
political changes and will not be unduly dependant on personalities.

Intense lobbying by the State government has also resulted in national policy
to allow landing rights for submarine cables carrying Internet traffic at
Chennai. Some Indian telecom companies are also planning to connect Chennai with
Singapore to enhance Internet bandwidth. Human resource issues are also being
addressed quickly and intake for IT courses in the state have been increased
this year. All these point to further strengthening the position of Chennai as a
favored IT destination.