Chandrababu Naidu wants a Cyberabad in divided AP

Recently announced collaboration with Microsoft a step in direction

Andhra Pradesh Chief Minister N Chandrababu Naidu (pictured) is pulling out all the stops to repeat in Visakhapatnam his success of creating a technology industry in Hyderabad in the 1990s.

His latest pitch for the establishment of a centre of excellence by Microsoft is seen as a much-needed breakthrough. Naidu had earlier persuaded the software giant to set up its India Development Centre, the largest such facility outside Microsoft’s US headquarters, in Hyderabad in 1998.

The transformation of Hyderabad into a modern city caught the public imagination, as high-paid technology jobs set off a boom in retail, housing and services. Hyderabad ranks second in information technology exports only to Bengaluru.

Two of Microsoft’s six business units in India operate out of Hyderabad. Microsoft Services Global Delivery has centres in both Hyderabad and Bengaluru, while the research and technical support units are located in Bengaluru. The company’s sales and marketing division has a presence in seven other cities in India.

Efforts at developing Visakhapatnam as a hub for the software industry began almost a decade ago with successive governments of the undivided Andhra Pradesh providing land and other incentives to technology companies. Yet, software exports from the city are only one per cent of those from Hyderabad. New strategies will be needed to replicate the Hyderabad story in the truncated Andhra Pradesh.

Naidu’s recent meeting with Microsoft Chief Executive Officer Satya Nadella in Hyderabad was also different from the one he had with Microsoft co-founder Bill Gates in in the 1990s. The 10-minute meeting with Gates was extended into a 45 minute-long conversation and a subsequent visit to Hyderabad by Gates. Microsoft subsequently decided to locate its India Development Centre in a 54-acre site allotted by the state government.

During his meeting with Nadella, Naidu brought a new agenda to the table on using Microsoft technologies and expertise to create an digital domain for government functions on a single platform. The meeting was followed by the signing of an agreement for use of Microsoft’s machine learning technology, Azure, for predictive outcomes in education, agriculture and loan transactions of women self-help groups.

Naidu also discussed  Microsoft’s collaboration in adoption of cloud services, citizen interface, technology training, and the company’s participation in e-Pragati, an integrated platform being built for the government to function as an enterprise in itself. To take part in these activities, Microsoft has to set up a dedicated centre in Visakhapatnam. The company is expected to come back to the government with concrete plans.

“We are going to make an offer no one can refuse. We will be creating opportunities for software companies through the implementation of e-Pragati, which not only requires enterprise resource planning but also generates downstream business opportunities. We will use Microsoft technologies as a platform to create such opportunities. Other technology provides are also welcome,” G S Phani Kishore, special secretary, department of information technology in the Andhra Pradesh government, told Business Standard.

According to Phani Kishore, the centre in Visakhapatnam was just a physicality in a whole gamut of collaboration being discussed to take technology to the masses.

E-Pragati, a state-wide enterprise architecture in governance that will cost an estimated Rs 2,400 crore, is expected to be completed by September 2017. While half of this cost will be borne by the state government, the rest is to be funded through private participation. Once ready, the platform will generate potential business opportunities worth of Rs 10,000 crore for software companies, officials claim. The government is also trying to use other methods to compel software companies to generate employment locally.

In a project tender issued for e-Pragati recently, AP government has put a condition to the potential bidders that either they should set up a development center in AP or they should outsource 30% of the project work to a company based out of AP, to qualify for the contract.

 

In the run upto the Partnership Summit scheduled to be held in Visakhapatnam from Janaury 10-12, 2016, the state government also making preparations to sign MoUs with at least 25 IT companies for establishing their operations in the state.

MAKEOVER VISAKHAPATNAM

• Hyderabad had to face comparisons with Bengaluru when CM Naidu  tried to hardsell the city of pearls as a destination for IT companies
   
• The big breakthrough came when he was able to persuade Microsoft CEO Bill Gates to set up their largest development centre outside Redmond, US, in Hyderabad in 1998
   
• Cyber Towers was built by L&T in collaboration the with Naidu govt a year later
   
• Naidu and subsequent govts expanded the human resource base required for IT companies by encouraging 700 engineering colleges in undivided AP
   
• After the bifurcation, Andhra was left with little or no presence of the IT industry
   
• IT operations in Visakhapatnam remained small, even though the previous govts encouraged IT companies to open campuses by providing land and other incentives
   
• The Naidu govt has now proposed to develop Visakhapatnam as an IT hub