Is Bangalore, India's Silicon Valley and home for some of the biggest information technology firms in the country, slowly losing out to Chennai?
It seems so, considering the investment plans of leading IT companies including Infosys, Tata Consultancy Services, HCL Technologies and MNC IT giants such as Cognizant, Covansys, Ford Information Technology, Xansa, Verizon, iSoft etc.
Consider this. TCS, India's top IT company, will have the biggest development centre at Chennai employing 8,000 software professionals over the next one and half year period, relegating its Mumbai centre, which employs about 6,000 people, to second place.
Infosys Technologies, which was instrumental in giving Bangalore its current status in the world IT map, is also entering Chennai in a big way. Cognizant's Chennai centre now employs more than 5,000 and the company has committed another Rs 100 crore (Rs 1 billion) for a second techno-complex on the IT Corridor here.
"I am very bullish on the growth of software in Tamil Nadu," Vivek Harinarain, the state IT secretary, said.
He said the state was readying another four million sq.ft of additional space for IT and software companies soon, which could accommodate about 20,000 software professionals.
In terms of exports, Tamil Nadu's Rs 8,100 crore (Rs 81 billion) worth software exports in 2003-04 is not even half the exports figure of Karnataka at Rs 19,400 crore (Rs 194 billion).
Maharashtra at Rs 9,982 crore (Rs 99.82 billion) is placed second among the states in software exports.
However, analysts believe it was only a matter of time before Chennai outscore Maharashtra and even Karnataka over a longer term.
"Chennai is cheaper by a huge margin compared to Bangalore. Besides, here we get reliable and stable workforce, compared to Bangalore, where there is a huge floating population," said an official with a real-estate tracking firm.
This explains why TCS, known as a Mumbai firm, is setting up its largest development centre in Chennai. "We will employ about 8,000 software professionals in Chennai," said TCS vice-president (corporate communication) Atul Takle.
Mahindra City, near Chennai, will establish the world's largest software development centre, which can house 25,000 software professionals over a period of time.
Cognizant was among the first to realise the city's potential.
"When we decided to set up our development centre in India, it was a ding-dong choice between Bangalore and Chennai. The pendulum veered in favour of Chennai for the 'ecosystem' it enjoyed," said R.Chandrasekhar, managing director and executive vice-president, Cognizant.
Xansa, another MNC IT firm, has set-up its development centre here spread over 27 acres with a capacity to house about 6,000 professionals.
For other large players such as Office Tiger, Sutherland, iNautix, World Bank, Covansys, Scope, Temenos, Spryance, iSoft, Lason and Ajuba, the city houses their largest operations in India.
And for those such as EDS, Syntel and Hewlett Packard, their Chennai development centre is the second largest or the most promising growth centre in India.
Similarly, for Satyam and HCL Technologies, Chennai is their second largest development base. Analysts said frontline IT companies such as Wipro, Patni and i-Flex are also significantly expanding their development base in the city.
"It is not just that these players have a mere presence in Chennai. Their operations in the city is the largest or the second largest in India or in the world," said an analyst.
The city's attractiveness is attributed to its 'ecosystem' -- the culture of educating people and the resultant quality of education, work ethics, access to international airports, mix of the conventional and the cosmopolitan, proposed connectivity through submarine landing station, international schools etc, he said.
"For us, cost was a major factor," said V Srinivasan, managing director & CEO of ICICI Infotech, which has its biggest development centre in Chennai, employing 350 people.