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Southeast Asia counts on Bengaluru to meet its engineering needs

Cost is no longer the reason. We are finally talking quality.

Feb 6, 2019 by Avanish Tiwary
Southeast Asia counts on Bengaluru to meet its engineering needs

In September 2015, Jakarta-based technology startup Go-Jek saw an unprecedented surge in demand causing its servers to crash several times. Sequoia, one of its investors, advised them to seek help from Code Monk — a software engineering collaboration between Sidu Ponnappa’s C42 Engineering and Ajey Gore’s CodeIgnition.

Ponnappa says their team set up in Bengaluru had it fixed. “In a few days, the servers crashed again. This happened at least thrice.” They realised the server’s capability had to be increased to face the rising demand.

Go-Jek’s traffic was doubling every two weeks. Since there was no question of expanding the engineering team that often, Go-Jek decided to acquire companies that were already working on this problem. Apart from C42 Engineering and CodeIgnition, Go-Jek welcomed Pune-based LeftShift into its fold to create its engineering hub in Bengaluru.

It helped that Go-Jek was already planning to set up a research and development (R&D) centre in India. Sidu Ponnappa is now the head of data engineering at Go-Jek. Currently, at least 150 engineers out of their over 250-strong team work out of Bengaluru.

Go-Jek
Go-Jek

As technology startups mushroom in Southeast Asian countries, especially in Indonesia, the demand for software developers and engineers has grown manifold. And many of them are looking at India’s Silicon Valley to fulfil their tech needs.

‘Ecosystem inherited from Wipro & Infosys’

In 2015, Paytm’s founder Vijay Shekhar Sharma spent a month in Bengaluru and mulled whether to shift the headquarters of his company from Noida to the Karnataka capital. “It’s the melting pot of all the top tech talent. They all come here like wannabe actors go to Mumbai for showcasing their talent,” he had said.

Three years down the line, even as Vijay Shekhar decided against the popular idea of moving to the city well known for its moniker ‘IT city’, he set up a dedicated 300 member engineering team in Bengaluru to strengthen Paytm’s AI capabilities. The company has three offices here now.

https://cdn.thepassage.cc/filters:quality(70)/public/image/2019/02/06/go-jec.jpg

Go-Jek’s Ponnappa believes it was them who began the trend of Southeast Asian tech companies such as Tokopedia, Grab and Traveloka setting up R&D centres in Bengaluru. He says companies historically outsourced their work to India because it was a cheaper option. “Now they are doing it because we are better.”

According to a 2017 research by Capgemini, Bengaluru is third after Silicon Valley and Singapore as the preferred location of companies to set up R&D centres. Asia is home to 29% of the world’s innovation centres, ahead of Europe, and Silicon Valley is on the decline despite topping the chart.

Ashish Sharma, CEO of InnoVen Capital, a Temasek-backed India fund, says some credit must be given to Infosys and Wipro for the talent ecosystem that exists in Bengaluru. “In the last eight to nine years, as more and more startups came up in Bengaluru, many developers who were earlier working in IT companies found new avenues to use their talent.”

Emilien Coquard, co-founder of The Scalers, a Bengaluru-based firm that helps global companies find tech-talent and setup their R&D centres in India, says when Bengaluru was crowded with engineers working for Wipro and Infosys the talent demand was more service-driven. Now the demand is product-driven, which has caused the community of engineers to grow organically in the city.

“Earlier companies were pushing boring backend work to Bengaluru. Now they are looking at Bengaluru engineers in the hope that they would solve complex technology problems and create new products,” he says.

Though New Delhi, Mumbai and Pune do have a decent talent pool and can satiate a company’s requirement of setting up a team of 15-30 engineers, Sharma says the moment they think of building a large engineering team with 200 or more people, Bengaluru looks like the best option. Companies are today looking at India to build better tools and solve problems in areas like Big Data, AI and machine learning. “And Bengaluru is even better in that space.”

Coquard, who is from France and has spent last eight years in India, shares the sentiment. “Bengaluru right now is probably one of the hottest places in the world for software engineering hubs. Wipro and Infosys were stronger 20-30 years ago as the talent was driven by cost. Now the trend has changed. Bengaluru has reinvented itself as the demand is now driven by the quality of engineers.”

Even Amazon has a team in Bengaluru among other centres such as Palo Alto, California, Beijing, etc., to develop its AI-enabled product A9, which works in areas such as product search, cloud search, visual search, augmented reality, advertising technology and community question answering.

Tokopedia, an Indonesian tech company, has a 100-member engineering team in New Delhi to support its technology needs. Vishal Gupta, its head of engineering for mobile development, says the rise in demand in Southeast Asia for Indian engineers is due to the lack of technology ecosystem in the region.

“Since India has already gone through the phase of building technology companies from scratch, the talent is more easily available. In Southeast Asia, universities are limited and thus the number of engineers are limited. There is a challenge to find the right people to build technology. Engineers are in an evolving phase in Indonesia. Maybe in the next four to five years there will be plenty of engineers there as well. But right now they are looking at India and specifically Bengaluru,” says Gupta.

Retention holds the key

A major problem that comes with Bengaluru attracting the best firms and engineering talent is the high churn rate. Ashish Sharma says he has heard too many stories from companies about good developers getting poached. “On one hand there is a great advantage of getting the talent, and on the other hand holding onto that talent is not that easy. Many times, when senior persons move from one company to another, they take a bunch of the good talent with them.”

Tokopedia’s Gupta finds the story familiar. In the last six to seven months many senior people from Paytm have moved to Ovo, a Jakarta-based payment company, he says.

Go-Jek seems to be dealing with the problem better. Ponnappa claims Go-Jek’s attrition rate is very low because the company has challenging opportunities which “engineers crave to solve”. He asserts that producing enough good engineers to meet the demand remains the biggest challenge.

India has a better supply than anyone else in this region, but it’s not remotely sufficient, Ponnappa says. “We probably have 1,000 people entering the industry a year who can deliver in a hardcore tech company. That number needs to go up five to 10 times. That’s why we are always hiring, and we hire very slowly because finding people who can build software is hard.”

Avanish Tiwary

Avanish Tiwary is a Bangalore-based tech journalist. He focuses on emerging Indian startups and unicorns. He can be reached at avanish.tiwary@thepassage.cc.

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