A New Kind of Software Company for India

BANGALORE, India — At a time when the term start-up evokes images of crashing stock prices and collapsing business plans — here as much as in the United States — Ashok Soota might not seem to be a man to watch.But Mr. Soota's 19-month-old venture, Mind Tree Consulting, has been celebrated by technology analysts and journalists, even though it is privately held and has all of $15 million in sales.


Part of the buzz stems from its pedigree: Mr. Soota, 58, had been the vice chairman of Wipro, one of India's largest software concerns. He helped lead India's drive in the early 90's into the back-office end of the computer business, writing software code for big American companies.But most of the excitement stems from Mind Tree's ambition: Mr. Soota wants his new company to leap several links up the technology food chain. Rather than supply programmers for the humdrum work of writing routine software code, he wants to design and build sophisticated computer networks for customers.


"In the early days, there was no need for Indian software companies to differentiate themselves," said Mr. Soota, an intense man given to philosophical musing. "Now, companies are starting to set themselves apart."In Bangalore, a southern Indian city that has been called the Silicon Plateau, Mind Tree is viewed as something of a leading indicator. Its success or failure could say a lot about India's ability to graduate into the more advanced, lucrative realms of the technology industry.
Other Indian companies — Infosys Technologies, Satyam Computer and Wipro itself — are trying to make the same jump. But nobody has set out to do it from scratch, nor with quite the audacity of Mr. Soota."By inserting themselves at a higher level in the value chain, they are creating a mind-set in the company," said N. R. Narayana Murthy, the chairman of Infosys, arguably India's flagship software company."The question is whether they'll have credibility," he added. "Where do they get the experience to do higher-level work for clients?"


Despite India's reputation for superlative code writing, which has won it a blue-chip roster of customers like General Electric and Nortel Networks, some analysts question how successfully the country can compete in the more-rarefied digital fields of strategic consulting or systems integration.Infosys is eager to offer high-end services, too. But Mr. Murthy is not about to discharge his army of software writers, who work at a sprawling, verdant campus outside Bangalore. His strategy is to continue writing code while gradually building expertise and to appeal for more complex assignments.

"It is a longer-term process," he said, "but it has a higher likelihood of success."India's technology industry will have $6.2 billion in exports this fiscal year, and total sales of about $8 billion. That is extraordinary growth, given that the services industry did not exist a decade ago. But it still accounts for just 2 percent of India's total economic output.