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The big brands have had offices in India for many years and a cycle is emerging of services companies striking out on their own from home offices, not unlike the shanzhai in Shenzen

Many global IT leaders have shown a keen interest in India and in recent years most of the well known IT players have set up multiple offices. Some key players who have made their presence in India are Intel, AMD, Microsoft, Dell, HP, Acer, LG and Samsung. What is so special about these macro IT giants is their huge employment numbers. For most of Indian techies and college graduates, these are the dream companies to work for. It’s not only foreign leaders who are popular in India; India based companies like Infosys, Satyam and HCL are also on the list of most preferred IT employers in India.

 

You might be thinking, what are these IT giants doing in India? Well, to your surprise, they are in India not just to get their work outsourced, but to perform complete engineering of their IT products. For example, Intel designed its six-core Xeon processor completely in India.

IT growth in India is just not limited to the presence of major IT MNCs but also because of the fact that there are thousands of private software development and IT companies spreading rapidly all over India, but mainly in Bangalore, Hyderabad, Delhi and Kolkata. The growth of these private companies is interesting because in some way, most of them were born out of major MNCs.

There is a common phenomenon where Indian techies work for huge IT companies, learning key aspects of the IT business, and then later build a company of their own. In Bangalore, you can find thousands of such companies being operated in houses, not unlike the shanzhai in Shenzen.

Last weekend, I sat down with the owner of a software development company in Bangalore who runs his company from his house.

Tell us something about your company.

I have started this company 4 years ago as a software development company.  In these 4 years, we have worked on different IT domains. We expertise in developing Windows based application, web pages, web-based applications (open source) and even smartphone applications.

What made you interested in starting an IT company?

I have 15 years of experience in the IT industry and when I thought of doing something of my own, I believed in my expertise and experience and started an IT company. I am glad it’s doing well! (Laughs)

What kind of problems you have faced while starting up your company?

I don’t believe in problematic startup! I executed my plans at the right time. I stated the company with some valuable projects in hand and a team of talented people.

Have you received any support from the Indian government?

Government is always helpful, if you are honest with them. Accomplishing governmental rules and tasks are always the first priority.

How did the recent recession period effect your company’s operations?

Not much! As our company has some constant client and stable projects, but worried about future projects though! Thankfully it’s getting better now.

Which clients do you think are more important for your business, Indian or overseas?

From business point of view both are equally important!  I really don’t want to discriminate (laughs loudly).

What’s your opinion about your competition?

IT industry is a great example to define the word ‘competition’. Competition is good! It always tempts us to do something new before someone else does it.

What, according to you, is your most important asset?

Technology proficiency, talented manpower, eagerness to do something very innovative and new are some of them.

How do you see the future of your company?

Bright!

“The dynamics of entrepreneurship are the same in India as in America. Company founders usually come from the ranks of experienced business executives and are middle-aged. They get tired of working for others and want to make an impact and build wealth before they get too old. Given that there are now hundreds of thousands of R&D workers in India who are gaining valuable experience and are getting old, it is simply a matter of time before they begin to hatch their entrepreneurial plans. After all, their colleagues who migrated to the U.S. now start nearly one in six of Silicon Valley’s tech firms.” – TechCrunch.

 

The management story is just one side of the coin. The other side is the employees of such companies. According to Mr Satish (name changed), who has been working for a home-based software development company in Bangalore for the past 2 years, “working for such small companies gives much exposure compared to big MNCs. In a small company you’ll be given opportunity to get involved in various tasks and hence it helps us to learn more and more. But working in such company is always a threat to your job security. Most of the time, management standard and lack of employee benefits in other terms makes you unhappy! I do have dream to work for a brand name and I am working hard to make my dream true.”

To me it looks like there is a cyclic process going on, where experienced leaders from big IT giants start their own company to fulfil their dreams. This is usually done towards the later phase of their career. Generally, new graduates start their career with these start-up IT companies, but soon jump to branded IT companies. Then after working for the big boy for many years and gaining experience, some of them also go on to start their own companies, turning full circle.

 

Just like the shanzhai, big brands play a major role in the cycle of business for start-up IT companies in India. But local innovation and the hunger for new projects clearly evident when you talk with business owners like I did.

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