SOFTWARE DEVELOPMENT Silicon Subcontinent

SOFTWARE DEVELOPMENT Silicon Subcontinent

The next hot enterprise software application may come from India, not Silicon Valley. Although most CIOs still think of India as an offshore outsourcing destination, the subcontinent is becoming an IT business incubator, thanks to commercial software companies that rely on internal development teams in cities such as Delhi, Mumbai, Bangalore and Hyderabad. Venture capitalists, such as Deepak Kamra of Canaan Partners, are tapping the talents of engineers educated at the Indian Institutes of Technology—the same talent pool that produced the many immigrants who, in the 1990s, led startups in the United States. Only back in India, they cost less. "More innovation in more places at a lower cost means a lower cost for software and better quality," says Kamra. The result, he adds, is a better deal for customers. Skelta Software, a 65-person company based in Bangalore, counts Siemens Westinghouse Power among the customers of its workflow software. "We would never have been able to start the company without using the cost and talent advantage of India," says CEO Sanjay Shah. CRM vendor Talisma is headquartered in Bellevue, Wash. But its 150 India-based employees do product development, quality assurance, product management and marketing. Jim O'Farrell, Talisma's vice president, says his costs are five times lower than if these functions were located stateside. Given lower labor costs, nimble startups in India can beat established vendors to market by hiring larger development teams than they could otherwise afford. "We bring products to the market about twice as fast," confirms Anil Gupta, vice president of marketing with compliance software vendor MetricStream. Sixty of the company's 100 employees work from Bangalore.