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.