On the first anniversary of the Satyam scandal, key elements of IT industry that grew around it in Hyderabad, get set to pack their bags -- thanks to an unworkable environment for global business
An IndiaTechOnline special by Anand Parthasarathy
January 7 is one year to the day when the Rs 7136 crore ( Rs 71.36 billion) Satyam scandal became public knowledge after the company’s Chief Executive made a sensational mea culpa admission of guilt. During that year, the company nurtured briefly by a government appointed board and then taken over by Tech Mahindra has returned substantially to a ‘business-as-usual’ state, thanks to the innate strength and quality of its work force and canny steering by its new owners. Brand India IT took a blow – but bounced back.
The same cannot be said for government – which even after a year, has not taken its investigations to a stage where the guilty can be brought to trial. That – sadly – is also a case of ‘business-as-usual’ . Perhaps a speedy legal process that would have served as a strong and upbeat signal to the global corporate world ( and a warning to other baddies) was too much to expect. It would seem so -- from a system that has left us enthralled and repelled for some weeks now, with the tortuous details of a case involving the harassment and suicide of a young woman, where punishment such as it is, was meted out almost two decades after the event and has only opened a Pandora’s Box of unanswered questions and suspicions.
The same political-bureaucratic system in India, that is doddering over the legal issues of the Satyam scam has dealt the promising infotech industry in Hyderabad, an even bigger blow. It has reneged on its commitment to provide a stable environment and the necessary infrastructure for technology players to undertake world-class, world-serving business in what was hopefully and as we must now admit, prematurely, dubbed ‘Cyberabad’. The State government in Andhra Pradesh ( whatever its political hue) has made comforting noises about its commitment to the technology business for almost a decade, and has had no problem in basking in the glory that Hyderabad-based IT companies, big and small earned by their world-beating work.
Yet the reality has been a gradual backward slide -- and we are not thinking of recent events. The power situation, in and around Hitec City had deteriorated so badly that many IT companies were faced with a Hobson’s Choice: either work without grid power for many of the daylight office hours every day – or take two days in the week off. No one can run a 24 by 7 business, like global IT services in such an environment. And this, after pious and cynically-made promises that the city’s IT belt would be an island insulated from such shortages.
Recent weeks have only heightened the industry’s sense of alarm. ( See this reasoned column by the www.andhrabusiness.com portal’s guest writer PNV Nair Telengana issue and its ripple effect on Hyderabad andhrabusiness.com/TelanganaAgitation.aspx ) .
To outsiders it would seem that the student community in Hyderabad, seemingly free from any call to attend classes, has taken on the role of determining when the city will shut down and when it will be free to go about its business. Concerns for the safety of their staff who are unable to reach their work places without running the gauntlet of goondas is forcing many Hyderabad based IT players to look at options outside the state.
A story in Business Standard (Telangana issue forces IT firms to eye neighbourswww.business-standard.com/india/news/telangana-issue-forces-it-firms-to-eye-neighbours/381816/ ) suggests that a mini exodus is already underway -- and Andhra’s crisis will be an opportunity for neighbouring states like Karnataka and Tamil Nadu to scoop up some new business. Almost in desperation, a delegation of IT leaders called on the principal political parties to try and convince them of the irreversible damage that prolonged agitation on the Telengana issue will do to the city’s reputation as a key Indian centre for excellence in technology driven industry ( BusinessLine: IT honchos meet AP political leaders www.thehindubusinessline.com/2010/01/03/stories/2010010352240300.htm ).
This seems like a last ditch effort to preserve what is left of Brand Cyberabad. The IT industry may not really care which way the Telengana problem is solved – as long as Hyderabad’s ability to function as a key international node in the high tech industry is left undisturbed.
Will the political establishment – and we mean all parties – listen? They need look no further than their neighbour, Karnataka, where the narrow political agendas of multiple parties ensured that Bangalore’s reputation and ability to function as India’s Silicon City was all but destroyed within a brief spell of five years. Tech Bangalore survives – because the brand turned out to be bigger and more resilient than the envious forces that tried to tear it down. Cyberabad may not be so fortunate. -- January 6 2010