Thursday, September 29, 2005

Bangalore Outsourcing Revenue Increases

India's technology hub Bangalore experienced a 20 percent growth to 90 billion rupees ($2.05 billion) in its software and back-office outsourcing exports in the April-September half-year period, an official said Wednesday.
Also, 57 foreign companies opened offices in the city and had invested a total of 9.2 billion rupees ($209 million) through Sept. 27, when the figures were calculated, B. V. Naidu, director of the federal government body Software Technology Parks of India told reporters.
Naidu expected full year revenues to be at least $8.7 billion, or 30 percent higher than the last year's figure of $6.7 billion.
Industry leaders had feared that Bangalore's outsourcing revenue growth may slow down due to the city's sagging infrastructure and resistance from U.S. labor groups. But the latest growth figures suggest there has been no decrease in Western outsourcing.
Western companies save costs by farming out software development, engineering design and back-office functions to India and other countries where wages are low and skilled workers are plentiful.
Many of the world's largest technology companies including Microsoft Corp., Intel Corp., Oracle Inc., and Google Inc., have their offices in Bangalore. But many complain that the city's potholed roads, congested traffic, frequent power shortage, inadequate public transport and a cramped airport threaten their growth.
Labor groups in the U.S. and Europe have protested the practice of outsourcing, claiming it leads to job losses. But such protests have eased in recent months.
India's revenue from Western outsourcing was $17.2 billion in the fiscal year ended March 2005. It expects a growth of at least 30 percent in the current year.

The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.