[Reader-list] 3 recent (mainstream) IT stories on India

[Harsh Kapoor]

The Wall Street Journal
Jan. 7, 2002
Boom Town Column
By Kara Swisher

U.S. Tech Town Rises in India
---
Silicon Valley Veteran Starts Self-Contained Community
To Make Bargain Software

PHOTO: Swain Porter and the all-purpose domes of New Oroville, India,
where the water buffaloes have given way to programmers

By Kara Swisher
E-mail: kara.swisher at wsj.com

WITH ALL THE WHINING in Silicon Valley about how tough it is to keep a
start-up going in these difficult times, it might be a good idea to
consider what Swain Porter has been going through over the past year.

While he has had to deal with the normal litany of challenges faced by any
tech entrepreneur -- constantly looking for solid funding, new clients and
crack programmers -- there were other less ordinary problems, such as the
recent matter of the water buffalo that got stuck in the trench where his
new company's fiber-optic lines were about to be laid. Eventually, it took
more than a dozen people to pull what had become a very heavy and very
dead mud-covered beast out of the muck.

But even that incident pales in comparison with other issues: a variety of
cobras, a $26,000 goat shed, constant power outages and the twin seasonal
dangers of torrential rains and 107-degree temperatures.

It's all been part of an unusual venture to build a self-sustaining
software-making community in the desolate hills of southern India. That's
where Catalytic Software, a small U.S. company founded in 1999 by a group
of former Microsoft executives led by Mr. Porter, has been scratching its
way into existence. The grand vision: creating high-quality, just-in-time
software for bargain prices by combining cheaper Indian programming talent
with stricter U.S. standards.

Amazingly, with little funding and lots of obstacles, it is actually
starting to work. Mr. Porter, who is 36 years old, was back in Silicon
Valley last week firming up new funding, hires and several promising
outsourcing contracts with U.S. software firms -- and hoping for good
times ahead.

Unlike the feel-sorry-for-me faces of many techies here, Mr. Porter is not
only still plugging away, but also headed to profitability. And he is
still beaming about the project that he has dedicated his life and fortune
to in pursuit of an ambitious and adventurous dream.

You might call it: Indiana Jones and the Temple of Geeks.

"I am still really excited because we've weathered the downturn and are
building a real business that has real roots," he says. "I think this was
never something that was easy, so I think that's why we're still going."

The soft-spoken former research scientist and Microsoft contractor
relocated to India 18 months ago, settling not far from the up and coming
tech city of Hyderabad, in the southern state of Andhra Pradesh. Back
then, as he drove his battered Toyota SUV over the scrubby landscape, he
regaled a dubious visitor with his dreams of a city that would eventually
rise there called New Oroville, named after his hometown in Washington
state.

Since India has notoriously uneven services -- from roads to power to
telephones -- a gated community would be needed to control all variables.
Over to the left would be neat lines of ultramodern geodesic domes where
hundreds of enthusiastic Indian software programmers would live and work.
Over to the right would be the pool, recreation center, ice rink (yes, ice
rink) where workers and their families would relax and enjoy themselves.
And just up the road would be the state-of-the-art electric-recycling
communications grid that would effortlessly power up this humming new city
of tomorrow -- a vibrant community created from scratch.

>From the beginning, there were obstacles -- such as the water buffaloes.
This being India, these lumbering objects of holy veneration plopped down
anywhere they liked -- and the spot they seemed to favor most was the dead
center of what was to be New Oroville's Main Street.

Today, Mr. Porter thinks he has finally solved that problem by stringing
up a barbed-wire fence around the 500-acre site. "You have to be really
careful with water buffaloes, since they can get really angry and come at
you," Mr. Swain says. "That's not something you learn at Microsoft, of
course."

Of course.

But Microsoft, at least Microsoft-generated money, has helped a lot, with
principal funding for the project coming from Eric Engstrom. The former
executive there has put up more than $1 million for New Oroville, and his
other U.S.-based software ventures have given Catalytic its first
business. Mr. Engstrom's main aim was to use what he had considered
excellent Indian programming talent to make "Made in India" a coveted
label.

In fact, over the years, India has developed into a major source of
cheaper outsourced information technology services for U.S. companies and
more growth there is predicted. Recent studies have estimated that IT
services from India will rise drastically in the years to come from about
$1 billion last year.

Pushing a higher-quality offering, Catalytic hopes eventually to grab a
more than $100 million slice of that pie -- if it gets a planned 4,000
domes built at New Oroville, with thousands of employees.

Now, there are 35 workers at the company and about a dozen nearly complete
domes on the site, along with new electrical, water and communications
systems. Each dome, costing about $4,000, is made of concrete and recycled
magazines and can be expanded to three floors, about 32 feet in diameter
and 26 feet tall. Some will be used for homes and others offices and
community facilities.

Mr. Porter hopes 60 domes will be operational by the end of the year, with
200 workers. Resumes, especially since the tech downturn has started, are
pouring in, he says.

While the venture is still a small affair, growth will require well beyond
the $2 million spent so far. Catalytic is about to close a small ($2
million) round of funding and recently bolstered its reserves with a $2.3
million loan from the Export-Import Bank and a $2.1 million loan from the
State Bank of India. It is still a trifling amount given the progress
made, especially compared with the huge sums spent by now-defunct dot-coms
in the U.S. over the past several years. Mr. Porter's biggest regret:
having to pay $26,000 to buy out a goat herder's building and a few
borehole wells on the land.

Catalytic now has to attract new programming contracts from companies not
affiliated with its investors. Mr. Porter notes that the key to that is
completing quality work at low cost, so word-of-mouth will build.
Catalytic has already garnered several of these, and he is now aiming to
hire a small Silicon Valley-based staff to focus solely on attracting that
business.

Thinking about it all rising from bare soil in India, as he sits amid the
skyscrapers of downtown San Francisco, is a bit of a disconnect, Mr.
Porter admits. But he is eager to return to get down to business.

"We are looking pretty strong coming out of this downturn, and I think we
will have a good lead now that the domes are on the ground," says Mr.
Porter, who recently became engaged to be married to an Australian woman
whom he met in India. "Hardship is what has made us great."

That, of course, includes water buffaloes.

What do you think about what it's like to be an entrepreneur in today's
downturn? Write me at kara.swisher at wsj.com and come see the debate Friday
at WSJ.com/BoomTown.

o o o o o

Reuters
Sunday, December 30, 2001
http://biz.yahoo.com/rf/011230/bom248116_1.html

India seeks to become world's back-office
By Rosemary Arackaparambil

BOMBAY, Dec 31 - The chattering youngsters, many dressed in
Western-style casual clothes, alighting at a train station in a northern
Bombay surburb appear headed for a college campus.

But it is late at night, and they are making their way to a nearby plush
office complex.

There, in a huge brightly painted ``shopfloor'' whose walls and pillars
are adorned with colourful posters, they settle down behind computers,
pull on headphones and spend several hours speaking English with an
American accent.

These 18 to 26-year-olds working for eFunds Corp unit E-Funds
International (India) handle direct tele-marketing calls from customers
halfway around the globe for U.S.-based call centre operator West
TeleServices.

They are part of an emerging workforce for India's latest export offering
-- IT-enabled services.

These include tele-marketing, helpdesk support, medical transcription,
back-office accounting, payroll management, maintaining legal databases,
insurance claim and credit card processing, animation, and higher-end
engineering design -- all of which can be delivered by phones, computers
and the Internet.

India is aiming to become ``the world's back-office''.

A McKinsey study has estimated e-enabled services could be worth over half
a trillion U.S. dollars globally by 2008.

``I think there is no better or more promising area for India. It plays to
India's sweet spot,'' Pramod Bhasin, president of GE Capital Services
India, which runs the country's largest such enterprise, said at a recent
venture capital seminar in Bombay.

GE Capital's 10,000 strong manpower offers accounting, claims processing
and credit evaluation services to 80 branches of General Electric Co
around the world.

India seeks to become world's back-office
Countries like Australia, New Zealand, Ireland, Canada and the Philippines
have long provided call centre services but India, with its cheaper,
skilled, English-speaking and IT-savvy workforce is fast becoming
attractive.

The National Association of Software and Services Companies (NASSCOM) has
forecast India's revenues from IT-enabled services to rise more than 20
times to 810 billion rupees ($16.94 billion) by 2008 from 40 billion
rupees last year.

Industry officials say Indian companies can offer these services 30-40
percent cheaper than their competitors.

CALLING MORE

Some 208 IT-enabled service companies are currently registered with
NASSCOM, but there are many more.

``The biggest opportunity in IT-enabled services in India is call
centres,'' said Johnathan Everett, managing director of venture capital
firm The VIEW Group, which manages $40 million.

``India is currently barely scratching the surface.''

Call centre services can extend to emotional help, as Bangalore IT-firm
Phoenix Global Solutions plans to do. It has hired 50 people for a pilot
project to counsel troubled American people.

NASSCOM estimates that about 68,000 people are employed in the Indian
IT-enabled services industry but forecasts this could rise to 1.1 million
by 2008.

With starting monthly salaries of 8,000-10,000 rupees, the opportunities
are good for many of India's job-seeking graduates.

Several foreign firms like HSBC, Standard Chartered Bank, American Express
and British Airways are setting up back-office processing centres in
India.

Indian IT firms like Wipro, HCL Technologies, Mphasis BFL and private
telecoms group Bharti Enterprises are among a few that have announced
plans to expand their services offerings to the IT-enabled business.

``The main reason we decided to do this is because it is a different set
of services for the same set of customers,'' said Ramesh Enami, chief
technology officer of Wipro Technologies.

INVESTMENT IN STAFF

But Indian companies need to build marketing skills, strong
infrastructure, and tackle cultural issues to grab more business.

Call centres usually hire Indians with neutral accents. Most are located
near big cities such as New Delhi, Bombay and Bangalore.

The firms focusing on U.S. customers train their operators in American
culture and linguistics. Some give the impression that they are located in
the United States and agents adopt American names to make callers feel
comfortable.

But despite the relative novelty of the business, Indian firms face
attrition rates of 20-25 percent, partly because most agents are young and
keen to move on.

Besides investments in telecoms, computers and power back-up, call centres
need to invest in agent interest and training.

Telecoms and software firm GTL Ltd's 1,000-seat centre near Bombay houses
a gymnasium, prayer room, baby-sitters and recreation room to pamper and
retain agents.

Experts say that while retaining staff was important, companies also need
to join hands with foreign partners to lower the cost of customer
acquisition and expand business.

($1 equals 48.3 Indian rupees)

o o o o o

BusinessWeek
Dec. 26, 2001
http://www.businessweek.com/technology/content/dec2001/tc20011226_2002.htm

SECURITY FOCUS

The Littlest Security Pro
A teenaged computer prodigy in India becomes the youngest CISSP in the
certification's twelve-year history

By Kevin Poulsen

At a time when teenagers are more likely to be noted for cracking networks
than defending them, a computer prodigy in South Bombay, India shattered
some stereotypes this month when he became the youngest person ever to be
credentialed as a "Certified Information Systems Security Professional",
or "CISSP," after acing the lengthy certification exam and clearing a
special investigation triggered by his young age.

Namit Merchant was sixteen when he sat for the six-hour, 250-question
CISSP test in Mumbai in November -- he turned seventeen later that month.
While there's no official minimum age for obtaining the certification --
which is widely recognized in the industry -- aspirants are required to
have at least three years of full-time professional computer security
experience under their belt when they take the test.

Perhaps understandably, the CISSP test proctor became skeptical of
Merchant's qualifications when the teenager checked in for the exam using
his high school I.D. card. "He saw my birth date on there, and he asked me
how old I was," says Merchant. "I told him I was sixteen, and that was why
I didn't have a driver's license."

The proctor needn't have worried. The son of a software engineer, Mechant
grew up with computers in the home, and took to them naturally. According
to his resume, he landed his first IT job when he was 13, architecting
security controls into payroll and accounting software for Bombay-based
Compuware, then later went on to perform security work at several more
Indian technology companies. Today he works for consulting firm Network
Intelligence India, while finishing up his senior year in high school.

"Security is the most challenging part of computers," says Merchant.
"That's why I got into it."

In December, the ethics board of the International Information Systems
Security Certification Consortium -- the not-for-profit corporation that
created the certification program in 1989 -- verified Merchant's three
years of pubescent work experience, and granted him the CISSP credential.
A frankly flabbergasted review board member told Merchant in an email that
the investigation had been prompted by the organization's desire to
"maintain the stature of the certification."

"I don't have the statistics handy, but I suspect the median age of CISSPs
is over 30," wrote Bill Cambell in the email. "The certification was never
conceived as something within reach of teenagers!"

"Obviously he's very extraordinary, and he seems to be very sincere about
his interest in information security and going somewhere in the industry,"
says consortium spokesman Mike Kilroy. "We really congratulate him on his
achievement."

In addition to the $450 test fee, the young security pro will now be
responsible for annual dues, and is bound to the earnest CISSP code of
ethics -- a kind of Ten Commandments of computer security work that
includes such injunctions as "protect society," "act honestly" and
"advance and protect the profession."

Merchant, who plans to attend a university when he graduates high school,
will also have to renew his CISSP certification in three years, and retake
the exam -- which he describes as challenging but "too theoretical."
"There should be more practical knowledge," says Merchant. By then, he'll
be nineteen years old, and may even have a driver's license to show at the
door.