The results of NASSCOM’s survey did not come as too much of a surprise to the cognoscenti in India’s information technology (IT) industry. “The reasons why we came here in 1983 are still good. It is only now that a lot of other companies are waking up to the potential of the city,” says S. Mahalingam, executive vice president at the country’s oldest and largest software firm, Tata Consultancy Services (TCS). And Mahalingam should know. With more than ten years of history with the company’s operations, Mahalingham was around when the company began to build an effective business model for the country’s software export industry. “In 1983, we were 25 people in Chennai. In 1988, when the first IBM center was set up here, we had 180 professionals,” Mahalingam recalls. Today, TCS’ Chennai operations employs nearly 2,500 professionals – a full quarter of the Mumbai-headquartered company’s total employee strength.

The NASSCOM survey has come as a timely shot-in-the-arm for the Tamil Nadu government, which has recently stepped up efforts to attract IT-related investments into the city. “Frankly, Tamil Nadu is way ahead of the other states when it comes to IT. Studies conducted by several independent firms, including a recent one by Price Waterhouse-Coopers, have shown that clearly. We just have not created too much hype about it,” says Madhavan Nambiar, chairman and managing director of the state government-owned Electronics Corporation of Tamil Nadu (ELCOT), which acts as a “single-window” agency for IT-related investments in the state.

Setting Up Shop in Chennai

Recent months have seen the other big names in the Indian software exports industry – including the Hyderabad-based Satyam Computers and Bangalore-based Wipro Infotech and Infosys Technologies – setting up large development centers in Chennai. Infosys, which inaugurated its second center in the city in November 1998 is in the process of acquiring 15 acres of land at Sholinganallur (in the outskirts of Chennai), where it plans to create a large campus. According to Nandan M. Nilekani, managing director of Infosys, the company plans to invest more than Rs.500 million (US $12.5 million) in the new center, which will house more than 1,000 professionals. The Sholinganallur facility, which will be completed within the next 18 to 24 months, is expected to rival the Infosys campus in Bangalore’s Electronics City.

India’s largest IT group, the New Delhi-based HCL corporation (specializing in both computer hardware and software), has already chosen Chennai as its site to establish a major portion of its new software development activities. Today, HCL group companies like HCL-Technologies, HCL-Consulting and HCL-Deluxe (a joint venture with US-based financial software maker, Deluxe Corp) also have large software development operations in the city. HCL Corp’s dedicated facility for Cisco Systems Inc., which develops network management software for the US-based networking giant, is also based in Chennai – so much so, that R. P. Singh (vice president at HCL Technologies) calls HCL Corp a “Delhi- and Chennai-based group.” He estimates that HCL Corp’s offshore revenues are almost equally divided between its facilities at Noida (near Delhi) and Chennai. “We have close to a thousand people in Chennai, and the business is booming!” he says.

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