Computers Today, July 16-31, 2000; CT++: The Cyber Renaissance

July 16-31, 2000 CT PLUS

TAMIL NADU
The Cyber Renaissance

How the quiet southern state is transforming into an infotech destination

By K. Jayadev

Tamil Nadu is gearing up for the modern age. Shedding its image of being a conservative society, the state is now opening its doors to international companies to make use of its huge pool of resources, infrastructure and skilled manpower. The trend, which started two years ago, has helped the state position itself as one of the much sought-after IT destinations in the country and is giving a tough fight to its neighbours-Karnataka and Andhra Pradesh.

The very fact that Chennai's software exports is double to that of Hyderabad and next only to Bangalore is clear that the state capital is a strong contender for the top slot on the IT map. Can it achieve the status? This is a question that haunts not just the bureaucrats but also the IT industry in the state.

Tamil Nadu started opening up only recently. With big names in the private sector setting up units as well as the state government working on its own to take computing, the state is poised for a big take-off. According to K. Gnanadesikan, chairman and managing director of ELCOT (Electronic Corp. of Tamil Nadu), the nodal agency for most of the IT infrastructure development, there are two factors responsible for the growth of IT industry: physical and social infrastructure and human resource development. "These are two basic ingredients for the development of the industry. And Tamil Nadu has worked on these two areas for years, the fruits of which are bearing now." Towards this end both the government and private parties are contributing their mite.

The growth of IT industry is not restricted to one place or city; it is percolating to other towns as well (for instance, Coimbatore has 60 software units). The reason for IT industry permeating to small cities and towns, according to D. Prakash, IT secretary to the Tamil Nadu government, is the urbanisation of rural areas. "The villages are in close proximity to towns and cities. The maximum distance between a town and a village is not more than 35 kilometres. This has helped a lot in the growth of infrastructure and skilled manpower," he points out.

The transformation has definitely not happened overnight. It has been a constant effort from all directions and for many years. "The government is an enabling agent and towards this end we help companies to set up their units here," says Prakash.

It was three years ago when the government started opening up and doing extraordinary work for the development of its assets. The government, through its nodal agencies like ELCOT and TIDCO (Tamil Nadu Industrial Development Corp.), has been taking up various projects ranging from building fibre-optic backbone to developing software parks to promoting IT literacy among students.

Providing Infrastructure

For the creation of infrastructure, the state government is focused on two broad areas-developing built-up space for IT companies to start operations off-the-shelf and providing connectivity throughout the state by having an optic-fibre backbone.

The state government has decided to develop 1,000 acres of land along the Chennai-Mahabalipuram road, which starts with Tidel Park at Taramani and ends near Pentamedia at Kelambakkam. Called the 'cyber corridor', it will have individual buildings of companies coming up on the land. Already big names like TCS, Polaris, Wipro and Pentamedia have bought land on the cyber corridor.

The most touted of the built-up space is the Tidel Park, inaugurated recently by Prime Minister A.B. Vajpayee. Termed as the competitor to its counterparts in Bangalore (ITPL) and Hyderabad (HiTec City), Tidel Park already claims to have an occupancy rate of over 65 per cent with behemoths like Satyam Infoway, Pentamedia, DASD India Ltd, IRDA, NextSet India and Shuttle Technologies among its 27 occupants. The Rs 338-crore Tidel Park is promoted by TIDCO and ELCOT, with the two jointly holding 26 per cent stake. According to D.V.M. Sarma, CEO of Tidel Park, "We are planning to hand over the operations and maintenance of the park to experienced companies for which we will be inviting a global tender very soon."

Apart from this, the state government is concentrating on other cities and towns as well for creating IT infrastructure. For instance, ELCOT has signed an MOU with Bharatiya University of Coimbatore to develop a 100-acre IT park within the campus. Similarly, Madhurai University has also allotted land in the campus for the development of information technology park in Madhurai. Other initiatives have come from private players in Coimbatore, like the famous PSG-STEP (PSG College of Technology-Science and Technology Entrepreneurial Park) and an IT park by Ravichnadra Systems & Computer Services.

On the connectivity front, fibre-optic backbone is being developed by WorldTel, Reliance and ELCOT, wherein ELCOT has 26 per cent stake in the project. The project was to initially develop Internet community centres all over the state. But it seems WorldTel has now dropped of the idea of having cyber community centres and is concentrating on developing the backbone only. "Internet community centres might be given as franchises to other players," says the ELCOT chief.

Tamil Computing

One of the important achievements of IT industry has been the localisation of computing by the government and private institutions in a bid to take computing to the masses. "There was even a joke that the most popular software languages in the western world are 'COBOL', 'FORTRAN' and 'TAMIL'," says V. Chandrasekaran of Pentamedia Graphics Ltd. A testimony to his words is the fact that Tamil language has followers not just in their home state, but also in countries like Singapore, Malaysia, the Middle East, Australia and in a few pockets of the United States.

One factor that has helped localisation of computing products is the standardisation of Tamil language software. In effect, this means that now any product developed in Tamil language has to pass this standardisation guidelines before it is put to use. The process took shape at the TamilNet 99 conference, when the standardisation was announced by chief minister M. Karunanidhi himself. To work on Tamil standardisation for computers, a non-profit organisation, called Kanithamizh Sangam (association for Tamil computing), was formed by the developers themselves. And this led to a spurt of innovations in language computing. Today there are around 17 products in Tamil language.

From Literacy to Education

The Tamil Nadu government has been contributing to the IT training significantly. Apart from just starting computer labs in higher secondary schools, it has also decided to involve the industry in a big way to provide training. "The idea is to help students get the right kind of exposure to computers. For this, we thought it would be appropriate for the industry to conduct IT classes in schools-that is, let the people who know what is best teach the students," points out Gnanadesikan of ELCOT, which invited tenders from the private parties to take up schools for conducting computer classes. Commenting on the programme, B.G. Menon of SSI says, "The computer education programme (in schools) is crucial to IT education reaching the masses and the decision of the government to involve enterprise education companies in this effort is a crucial element for the success of this programme."

This novel government-industry participation in providing IT training is a bold step and will go a long way in fostering the growth of the industry. Dr Anandakrishnan, vice chairman, Higher Secondary Education Board, says the state will have the largest pool of IT literate people in country within a few years.

Substantiating this, Menon explains the importance of training in the new economy. He says, "In a country like ours, where infotech is fast becoming a prime mover of the economy both in terms of domestic industry and exports, quality IT education will determine the rate at which international technology is adopted and how competitive India as a nation can emerge in the new economy."

Software Surge

The year 1998-99 marks a watershed in Tamil Nadu's software exports, when it crossed the Rs 1,000 crore mark. From a meagre Rs 393 crore in 1997-98, it touched Rs 1,246.16 crore in 1998-99. And for the year 1999-00 it registered a further growth of 54 per cent, touching Rs 1,914 crore-only next to Bangalore and Noida STPIs. The reason for this spectacular growth is that the industry has spread to various areas like Coimbatore, Madhurai, Trichy and Thirunelveli. "We are promoting the state as a whole and not one particular city. This is reason why you find software units coming up in smaller cities of the state as well," says the IT secretary to the state govenment.

The state has 601 units, of which 536 are STPI-registered companies. The number of units also increased drastically in the last year. "This is basically because of the tax concession policy," says Rajalakshmi, Chennai director, STPI. All the top names in the industry prominently figure in the list of top 10 companies in the software exports from the state (like Pentamedia, HCL Technologies,Tata Consultancy Services, Cognizant and Polaris).

To further give a boost to exports, STPI, which provides the datacom facilities to exporting units, is now adding a C-band earthstations in Chennai, Coimbatore, Trichy and Madhurai. The STPI is planning to have its points of presence (POP) at Thirunelveli and Salem. "In Tamil Nadu it is a reverse trend. The demand for earthstations is created by the industry, whereas in other places earthstations are first set up and then industries follow," says the STPI Chennai director.

IT-enabled Services

Despite Coimbatore having the largest medical transcription facility in the country, other IT-enabled services like call centres, back-office operations and GIS mapping are not very prominent and are restricted to certain pockets. However, STPI claims that many companies have come forward for establishing data processing and call centres in the state. The total IT-enabled services' exports from Tamil Nadu touched Rs 68.04 crore, with data processing and data entry taking the major share of this total turnover. A Germany-based firm has established a facility in Chennai for data entry and is expanding its facilities further.

"The IT literacy programme in schools should be a major boost to this sector. We think more people will start working in this area in the next few months," points out Anandakrishnan. The KG Group in Coimbatore, which has the largest medical transcription outfit in the country, has also started a training centre. Also Don Bosco School near Jolarpettai has started offering training in medical transcription. "There are a few units in Ooty which are also considering IT-enabled services. The movement has just started. And with manpower becoming readily available and connectivity upgraded, more companies will make Tamil Nadu their IT destination," says Gnanadesikan of ELCOT.

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