Bangalore, for many years, was referred to as the “garden city” because of its many beautiful green spaces and lush farm land. In 1985, Texas Instruments became the first multinational corporation to establish headquarters in Bangalore. Since that time, the city has attracted hundreds of foreign IT companies and created thousands of start-ups.
Since 2000, Bangalore has been referred to as the “Silicon Valley of India,” a reference to the original Silicon Valley in California. Although a more correct term would be “Silicon Plateau,” since it sits on a plateau. The steady influx of software companies into the city and surrounding area have made Bangalore the IT outsourcing capital of the world.
Bangalore proper is home to a significant number of the foreign-based IT companies currently operating in India, and also the vast majority of Indian IT firms. At the heart of the Bangalore’s IT sector is “Electronic City,” one of India’s largest electronic industrial parks. It is spread over 332 acres (1.3 km2) and houses more than 200 IT companies.
A primary contributor to the growth of Bangalore as an IT outsourcing hub has been its abundance of skilled manpower. Although, an increase in population has put a lot of strain on Bangalore’s infrastructure, it has continuously developed to meet the high demands of the global outsourcing industry. At a time when no other city was even close to the IT capacity of Bangalore, the city was the leader of the pack and by a huge margin.
Attractive to IT employers
One major reason for Bangalore’s continued dominance is the fact that it has thousands of software firms — a great proportion of them start-ups — that continue to provide IT employment in bulk from offshore companies.
Bangalore is also the preferred city for IT professionals. A 2014 study by LinkedIn put Bangalore as the top global locale for attracting LinkedIn members with IT talent or technology skills. Every year thousands of IT professionals move to Bangalore not only for the IT jobs, but also the greater likelihood of being around like-minded people. IT pros are like everyone else — they enjoy being around others who share similar interests and hobbies.
The IT industry’s roots are deep and wide in Bangalore. Some say it’s the city’s lifeline. As of today, Bangalore is host to more than 35 percent of the IT companies operating in India. Many multinational IT companies — such as Yahoo!, Bosch and Texas Instruments — also have a strong presence, and are more likely to have an office in Bangalore than even in the financial capital of India, Mumbai.
There also seems to be an unspoken level of comfort and familiarity with the City. When any global software firm is preparing to ramp up operations, they are most likely to do it in tried and tested Bangalore. It’s not just multinationals who prefer Bangalore, most of India’s leading IT companies, including Wipro, Infosys, Mindtree and Mphasis, have their headquarters and offices located in the City.
Bangalore-based companies also have one big advantage — a highly-educated, English speaking workforce that costs approximately 75 percent less in salaries than in the United States and Europe. Bangalore has also fast become the land of start-ups in India, where entrepreneurship has received a major boost in recent times.
Each year hundreds of entrepreneurs chase their dreams with startup companies. Because the cost of labor is so low, the cost of failure is correspondingly low. If a startup does not work out, an IT professional can always get a job of their preferred profile in any of the 500 IT companies based in the city.
Bulk hiring has also been a regular occurrence among Bangalore companies looking to recruit freshers each year. This is fortunate because the City also has the highest number of technical colleges in India. It is no surprise that, per a 2011 survey conducted by Aspiring Minds Research Cell (an employability measurement and recruitment firm), seven out of 10 engineers prefer to get their first job in Bangalore.
The City’s infrastructure and public utilities have also improved in the last decade, making it easier for employees to travel to their jobs. The weather isn’t bad either. Bangalore has a fairly pleasant climate year round.
December is the coolest month with an average temperature of 15.4 °C (59.7 °F) and April the hottest with an average high of 36 °C (97 °F), and precipitation averages just under 36 inches a year. The milder weather suits not only Indians who want to move there, but also foreigners who plan to open their branch offices.
The Challenger: Hyderabad
Even as all of India has grown, Bangalore has managed to retain its position as the outsourcing capital of India — and by extension, of the world. If there is a potential challenger for IT dominance it is Hyderabad, the “Land of Nawabs.”
Hyderabad is one of India’s premiere IT cities and is fast catching up to Bangalore. Hailed as the emerging IT hub of India, Hyderabad is fertile ground for aspiring IT professionals. It features a developed urban infrastructure that has enticed a large number of prominent multinationals — including ADP, Deloitte, Google, Microsoft, Facebook, Nokia, Samsung, Sun Microsystems and many others — to set up offices.
It is India’s center for scientific and technological development, not just for IT but also for pharmaceutical and scientific research. The state government has taken pains to implement and support liberal industrial policies that give high priority to development.
The Modi administration is also backing the development of Hyderabad’s IT industry with an increased focus on planned growth and fast-paced development of existing infrastructure to support expansion. Like Bangalore, Hyderabad has its own electronic township — HITEC, which stands for Hyderabad Information Technology Engineering Consultancy City.
HITEC is Hyderabad’s major center for IT. It consists of several campuses and phases including convention centers, shopping malls, and even residential areas so employees can live close to their work.
Whereas Bangalore is known as the outsourcing hub, Hyderabad is seen as increasingly, and easily, handling both outsourcing and insourcing. Many IT professionals considered Hyderabad to have the advantage over Bangalore when it comes to IT training. Numerous colleges and universities are located in the city, including the technical institutional giants IIT Hyderabad, Jawaharlal Nehru Technological University and Osmania University.
Additionally, with so many IT jobs and ambitious professionals, Hyderabad is seen as very fertile ground for industry startups.
What does the future hold?
While Bangalore is still the recognized destination for IT in India, Hyderabad is quickly closing the gap. Competition for quality talent has always been fierce, and that what competition is good for — it makes people and companies try harder.
The race between Bangalore and Hyderabad to be first in IT will continue, and will lead to more great innovations and technological advancements. Neither city, however, can afford to rest on its laurels. Pune and Chennai, in the midst of their own IT renaissances, are quickly closing the gap.