By Steve Ranger,, ZDNet Asia
Away from the giant gleaming campuses that house thousands of IT workers across Bangalore, it's possible to find smaller, more thoughtful operations staffed by academics and top technical experts.

While India may have built its reputation on low-cost IT services, now companies want to tap that skills pool for R&D know-how too, both to improve their existing products and give them the chance to tap into the booming Indian market.

While there has been criticism from some quarters about the level of innovation and entrepreneurship in the Indian technology industry, a number of companies are basing research and development teams there to take advantage of the giant talent pool.

The feeling in Bangalore is like "early Silicon Valley" according to Kentaro Toyama, assistant managing director of Microsoft's 50-strong research lab in town.

The lab is one of five Microsoft has across the globe, Toyama explained: "Our mission is the same as the other four research labs: to do the best computer science research that we can and see where we can have an impact on product groups and business groups."

The lab is working on a range of projects, from cryptography, multilingual systems and mobility to technology for emerging markets.

He said: "We hire people that are good and we give them a free rein to follow their curiosity. A lot of that work may never see the light of day but if someone isn't doing it we will miss opportunities."

As for siting the lab is in Bangalore, Toyama explained: "You need to have access to the communities that you want to impact. There's a very robust research lab ecosystem here--quite a few of the large multinationals have research labs.

As a result, Bangalore enjoys a network effect and critical mass of researchers that makes it easier to recruit people to the city.

One project that has come out of the Bangalore lab's emerging technology group is something called multipoint.

In India between 5 percent and 10 percent of schools in rural areas have PCs, which tend to be shared between five or six kids. And a dominant child tends to take over controlling the mouse and thus gets the most out of the PC use.

Toyama and his team came up with a simple innovation to make it possible for more kids to interact. The technology allows more than one mouse to be used at once, and the team found that for some kinds of learning experiences, by using the technology the students are able to learn as well as when they had their own PC.

"This is an example of a technology that comes out here that has a direct impact on the company," he said.

According to Toyama, there is plenty of potential for India to produce new ideas: India has a very good education system for top students and the country is producing very talented students with a background in mathematics, he points out. "This is an area where there is untapped potential in India that is just being realized."

He added: "One thing that is an interesting component, that's different to Silicon Valley, is that the country is going through a change from developing to developed country and there is a sense of mission--and [entrepreneurs] are contributing to the growth of the country. That adds an additional tone to the optimism."

For Georg Kniese, managing director of SAP Labs India, Bangalore is the best place to find talent.

"It's just the largest IT talent pool--40 percent of the relevant IT talent is here in Bangalore. For us it is very easy to hire--Bangalore is very attractive to employees and it's very attractive for employers," he said.

By the end of this year SAP plans to have 4,000 staff working at its Bangalore site--the company's fastest growing lab, home to 20 percent of its developers, and one of four global hubs with responsibility for products.

Kniese explained: "Today what we do like about India is the scalability and the possibility for us to ramp up 200 people in an area in half a year because of the vastness of the talent pool."

And its not just the multinationals that are getting their R&D out of India. Indian companies such as TCS are also advertising their research capabilities. TCS has a lab in Pune which works on process engineering and software engineering research.

Professor Mathai Joseph, who runs the center, explained: "One bit of magic pays for two or three years' investment. It's hard to think of an IT company that has not set up a research center in India. It forms an important part of the business for TCS."

For example, the labs develop tools to pick business rules out of legacy code, to help companies moving away from legacy systems to reproduce the same business processes on a new infrastructure.

The lab builds the analysis tools that help the re-engineering analyst to spot the business rules--and thus save 10 percent to 15 percent of the effort at an early, critical stages of a project.

The lab is also looking at privacy technologies and how to make data anonymous so that new applications can be tested using live data without breaching customer privacy.

And perhaps most importantly for the future of Indian R&D, it seems that the many researchers are seeing the value of staying in India, rather than heading abroad to further their careers.

Joseph explained: "People are coming back to India to work and they no longer feel they are giving up much to come back here."

Source: ZdNet India Visit http://www.zdnetindia.com/zdnetnew2007/index.php?action=article&prodid=2300&page=2 for more details,

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