BANGALORE V/S HYDERABAD

Date: 17th. May 2006

BANGALORE V/S HYDERABAD
This seems to be the hot topic for discussion everywhere these days - TV, print media, board rooms of MNCs, lunch tables in IT companies, blogs - just about everywhere. Semi-conductor fab plant setup and the visit of President Bush’s happening in hyderabad instead of bangalore this chatter has accentuated to a whole new level.
With so much chatter around this I thought I would write my perspectives (technology & startups) on this as both these places are most interest to me. I am in Bangalore after an effort of few years. I was’nt be going to be in silicon valley to experience the technology culture which I always wanted to, I thought I could be in bangalore instead.So now my home is in bangalore. After having come here there is no ounce of doubt in my mind that this is place with startup culture. Among all the IT cities in India Bangalore ranks number #1 as a technology hub. I can’t (don’t have the data) and won’t include the IT services/export that these IT cities make which might yield a different result but my focus here is pure technology companies - software products, semi-conductors, hardware etc, not just support and maintaineance.

Having said that One is in hyderabad for work as bangalore has become way too expensive for young companies to grow up. Interestingly I’ve heard of many others move from bangalore to hyderabad because of its cost & its infrastructure problems. I must say though hyderabad which once used to a very cheap city has become costly, rents have doubled but I guess overall even after the increase it is still probably cheaper than bangalore.

One most admirable thing about hyderabad now is that it’s infrastructure has improved by order of magnitudes. Except for some pockets driving in hyderabad is an absolute pleasure especially in the IT concentrated areas( viz Hitech City etc).Startups mushroom around great universities just like civilization originate around shores of a river. Thus key reason for the higher number of startups in bangalore is because it has a world class technical institution ( IISc & now emerging IIIT-B) and a truly excellent IIM-B. Relatively recently hyderabad has made place for ISB & IIIT-H ( they relatively new but they steadily making mark for themselves). With key drivers being replicated in hyderabad now the other parameters becomes important to draw comparsion. For ex infrastructure (government support etc) and bangalore has not been able to show a good report card on it while Hyderabad has been a lot better.

Acquiring talent has become a very expensive affair in bangalore, I heard some calculations from friend who said that given the current salary increases happening in bangalore in a few years there will be no price arbitrage between a US and a bangalore engineer. Hyderabad is relatively not as expensive as bangalore for talent.Social capital: Bangalore has the highest number of successful entrepreneur with quite some of them playing active role in creating an entreprenuerial eco-system. An indicator of that is extremely active TiE bangalore chapter. Delhi, hyderabad or any other chapter comes nowhere close to what TiE bangalore has been doing. Hyderabad is very weak in these aspects ( atleast TiE Hyd chapter is/appears dormant) and I am hoping that some of this will change in the coming few months.

Another important criteria is the weather and on this aspect bangalore is an undoubted winner . it is a breeze to live in this city all around the year. There is no hot summer neither a cold winter, there is rain which is fun unless ofcourse the rain god is angry and takes his/her fury out against people. Hyderabad has a very bad summer and One gets his skin burnt quite a lot over there.

There are both merits & demerits of both the places and one can go on to make a vast list for comparsion. Instead of arguing between them endlessly I choose to leverage best of both of them. Thus You Leverage the benefits of upcoming hyderabad and also benefit from the capital (advisory, social etc) built over time in bangalore