Hyderabad aims to become India’s technology hub

The city of Hyderabad in the southern Indian state of Andhra Pradesh has attracted a number of large multinational companies to set up software, services, and product development operations. The city, which has the headquarters of India’s fourth largest outsourcer, Satyam Computer Services, also has facilities of other Indian outsourcers, and multinational technology companies like Microsoft and Oracle.

Hyderabad is now aiming to be the technology hub of India. The Hyderabad chapter of Indus Entrepreneurs (TiE), an association of entrepreneurs and professionals from the Indian sub-continent, has tied up with the Indian School of Business (ISB) to host TiE-ISB Connect, a conference this week for budding entrepreneurs to present their business plans and interact with venture capitalists.

More than 150 new business plans in IT, pharmaceuticals, biotechnology, and the application of IT in life sciences and other fields are being showcased at the conference, up from 50 business plans a year ago, said Raju Reddy, chairman of the Hyderabad chapter of TiE, and chief executive officer of Sierra Atlantic, an outsourcing company in Fremont, California.

The business plans, for setting up companies in Hyderabad, were selected from a large number that were submitted and are all of good quality, Reddy said Friday.

Hyderabad attracts investment because of its large pool of skilled manpower, he said. People from Andhra Pradesh account for about 25 percent of Indians working in Silicon Valley, Reddy said. Even neighboring Bangalore, which is seen as India’s main technology hub, employs many staff from Andhra Pradesh, he said.

Hyderabad also scores better on infrastructure and a business-friendly government. Few other states can measure up to that, according to Reddy, in an obvious reference to neighboring Karnataka, whose capital of Bangalore is suffering from government inaction and poor infrastructure.

Hyderabad also has some top educational institutions. The most recent entrant is the Indian School of Business, set up in association with some leading business schools abroad, which has a special program for entrepreneurs.

Still, the city may still have some way to go before it beats out established technology centers like Mumbai, Delhi and Bangalore. A lot of companies are setting up in Hyderabad to find new pools of manpower, but the city lacks critical mass and the exposure it needs to attract the best entrepreneurs, said Sanjay Anandaram, a partner at JumpStartUp Venture Fund, a $45 million fund with headquarters in Mauritius.

That may change, he said, but for now, the best business plans from a venture capitalists’ point of view are still coming from Delhi, Bangalore and Mumbai. Most of the venture funding in the last 18 months has also gone to these three cities, he said.