India diary, day 4: Hyderabad's tech park

Wednesday 7 February - Hyderabad

Indian cities are keen to attract technology and business process outsourcing (BPO) companies because of the cash they can pump into the local economy. So they set up dedicated technology parks on the edge of town which offer special tax breaks.

Special Report: Inside India

In February silicon.com's Steve Ranger visited the Indian tech hotspots of Bangalore, Mumbai, Pune and Hyderabad to explore the exploding Indian offshore tech and BPO industry. Keep up with his daily diaries here.

♦ India diary, day 1: Cyberbad on Sunday
♦ India diary, day 2: Emergency calls and rural life
♦ India diary, day 3: Inside the outsourcing campus
♦ India diary, day 4: Hyderabad's tech park
♦ India diary, day 5: Margaritas to Mumbai
♦ India diary, day 6: Prime Minister's question time
♦ India diary, day 7: Mobiles in Mumbai
♦ India diary, day 8: Pune or bust
♦ India diary, day 9: An auto-rickshaw ride and a catwalk show
♦ India diary, day 10: Lost in Pune
♦ India diary, day 11: I heart Bangalore
♦ India diary, day 12: Searching for the next big thing
♦ India diary, day 13: Thirsty in Bangalore

These companies are seen as the engine of regeneration for many cities - for every IT job created, there are four additional jobs added in the wider economy.

On the edge of Hyderabad sits one such site, home to a number of different technology companies. But even here the divide between rich and poor remains visible - across the road from the technology park is a row of shacks. It's clear that not everyone has benefited from the IT money yet. For pictures see the photo story.

I'm here to visit a BPO company called Nipuna. The actual call centre in the building is pretty quiet because it is used by US customers, so much of the work is done during the night. Its CEO explains how the company keeps the young people, who make up the majority of the workforce, motivated - and keeps them leaving for the competition. Call centre work has been "scientifically rated" as the most stressful in the world, he tells me. For a full story on this see here.

Then I'm off across town again to visit Reuters' offshore development centre.

Satyam has 260 people in Hyderabad working for Reuters, supporting 73 applications including Oracle Financials and HR support, working in areas including consulting and architecture; SOX scoping and remediation; and legacy systems. The relationship has grown greatly since it started in 2001 with 29 applications and 60 staff in Hyderabad.

I get to take a look around inside the centre, where grey and yellow partitions separate serious-looking 20-something Indian workers developing apps for Reuters. The centre also has the other perks I've come to expect - the pool table and gym, and even a library stacked with textbooks and Dan Brown novels.

On the way to my third meeting of the day I pass through the rather posh looking Jubilee Hills neighbourhood where it looks like some of that tech money has gone on expensive grand houses for executives.

My final visit of the day is with the government of the state of Andhra Pradesh (of which Hyderabad is the capital) to get some idea of how important these IT and BPO companies have become, and to hear about the government's plans for Hyderabad's creaking infrastructure.

Indian exports of IT services are expected to hit $49bn in a couple of years - and Andhra Pradesh wants to be providing $14bn of that, which will mean the creation of three million IT jobs and another 12 million in the broader economy. Already one in four IT workers in Silicon Valley is Indian - and one in four of those is from Andhra Pradesh.

There are currently 1,234 tech companies in the area and the government wants to encourage more. For example there have been changes to the labour laws to allow women to work at night, something vital for the BPO operations that serve Europe and the US.

It is also spending $100m on bringing broadband to towns and villages and wants to encourage tech companies to look at local tier-two cities, such as Tirupti, Vijayawada, Visakhapatnam and Warangal.

It also has big plans for the local infrastructure - in April 2008 a $500m new international airport serving 12 million passengers per year is due to open. Work on a metro service is due to start in the middle of next year and there are road improvements coming too. And stuck in the traffic on the way back to the hotel, I hope those improvements arrive sooner rather than later.

Have you visited India to check out the outsourcing options? Or have you been affected by offshoring here in the UK? We want to hear your stories about India. Leave your comments below or email editorial@silicon.com.