Smaller U.S IT firms move to India

By SiliconIndia   |   Wednesday, 20 September 2006, 07:00 Hrs
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WASHINGTON: The outsourcing trend is headed for a new turn as smaller U.S IT firms are moving to India as their preferred destination to do business. Confined to large technological co-corporations until recently, small and mid-sized firms are spotting the benefits of running their business from India.

With resources and prices available in India at a fraction of its American counterpart, these small start-ups are attracting the attention the of larger firms who are looking to make investments.

The hot spots being eyed included Chennai, Pune and Bangalore. The first one turned out to be the California technology firm Infravio Inc. When WebMethods looked at tiny company as an acquisition candidate, they found out that the 65-person start-up had 50 software developers in Chennai.

The Fairfax Company eventually paid $38 million as a premium price for company that made less than $1 million last year. But by opening its 58 person India Development Center in Bangalore two years ago, WebMethods reduced millions of dollars from its budget as a result and the Infravio purchase almost doubles the company presence in India to a current headcount of 840 employees worldwide.

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