Is it Ctrl+Alt+Del for Brand Cyberabad?

Brand Cyberabad is a fast-fading memory. During the early part of this decade, Hyderabad was competing neck to neck with Bangalore for top position in the Indian IT space. However, things started taking a different turn after the Satyam scam, followed by the sudden death of chief minister YS Rajasekhara Reddy, leading to a political uncertainty across the state.

This also coincided with IT exports from Hyderabad shrinking at an alarming rate. In 2007-08, the city generated IT revenues worth Rs 26,122 crore as opposed to Rs 18,582 crore in 2009-10.

Hyderabad was its peak when former chief minister N Chandrababu Naidu branded it the new IT city, paving the way for the state?s wholesome growth. It was fueled by visits like that of then US President Bill Clinton to the city, and there was widespread apprehension in tech capital Bangalore that it could lose out to its neighbouring state capital.

The late YSR also continued in Naidu?s footsteps, attracting US-based IT companies. However, then came the Satyam scam, followed by YSR?s untimely death, and suddenly there is a huge question mark on the future of Brand Cyberabad.

Incidentally, one-third of American software professionals and one-third of Silicon Valley professionals are Indians, out of which 23% hail from Andhra Pradesh.

Of late, industry majors have expressed fears about the social and political position in the state even though the IT and ITeS industry enjoys the support of the ESMA Act here. A section of the industry is also worried about the ongoing Telangana agitation and there are rumours that some foreign companies are looking at other competing cities. Recently, an IT and ITeS delegation called on chief minister K Rosaiah to voice concerns about unsettled conditions in the state.

Even though Rosaiah has dismissed such fears saying the state is investment-friendly with sound policies for all industrial growth, a senior official from a leading company says it all: ?About eight years, we were in the race with Bangalore and Chennai. Now, we have lost the race.??

Echoes K Ajit Kumar, senior vice-president (HR), BSCPL Infra Ltd: ?It will take another decade to retain the lost glory. About 80% of the construction is yet to find takers and there is pressure on investors.??

Andhra Pradesh?s loss has been neighbouring Karnataka gain. Though the latter also had its share of political uncertainties and outcry over its crumbling infrastructure, Brand Bangalore hasn?t seen too much of talent and corporate erosion ? partly because of sustained evangelisation from both private and public organisations, and mostly because the state already has a vibrant IT ecosystem that makes it easier for companies to find talent.

In June this year, the Karnataka government announced that it had received investment proposals worth Rs 11,000 crore from IT firms. Among them were Infosys, Wirpo, TCS and Tata Elxsi. During the much-publicised Global Investors Meet, the state inked agreements with 55 IT and BT firms to set up operations in the proposed information technology investment region (ITIR) at Devanahalli, near the Bengaluru international airport.

Karnataka?s share in national IT space remains at a high of 30% with total software exports touching Rs 76,000 crore in FY10.

However, the IT & ITeS Industry Association of Andhra Pradesh (ItsAP), formerly Hyderabad Software Exporters Association, remains confident of reclaiming the lost glory. Says ItsAP president L Suresh, ?Despite the setbacks, we are hopeful of infusing a positive energy into the industry by bringing back normalcy. No temporary issues can have a permanent dent on Brand Cyberabad.?? He adds that the Justice Sri Krishna report for a separate Telangana state, expected in December, is likely to give a final picture.

On a similar note, Ratna Prabha, IAS, principal secretary, department of IT and communications, government of Andhra Pradesh, says existing IT companies in the state are expanding. There are over 1,200 companies in the state comprising 15% of country?s IT revenues. The state still houses companies like Deloitte, Dell, Virtusa, Microsoft, Accenture, Computer Associates, AMD, Google and many more. The new entrants, Facebook and JP Morgan, have also expressed confidence in the state. ?After a recessionary phase things are looking up. A lot of employment is being created in the state and the government has assured complete support for the industry,?? she points out, adding that momentum is picking up for the next round of competition.

JA Chouwdhary, a veteran of the IT industry and chairman of Talent Spring, explains Hyderabad has a lot of intrinsic strengths unlike other cities. A mix of training academies, engineering colleges, professional academic colleges such as ASCI and ISB have in fact given strength to the industry. ?About 86 companies have been added in the last one year and several Indian-American employees are relocating to Hyderabad. In fact, this is brain gain,?? he claims.