Software products bring hot career choices as India looks beyond IT services

July 14, 2014

When Zomato was setting up shop six years ago, the online restaurant search service had to woo engineers, but many weren’t interested in working for an unknown company. Instead, they wanted to work for larger and prestigious names. Slowly, that is changing.

Indian companies such as Zomato and Flipkart, which make their own technology products rather than provide services are becoming more attractive to the country’s engineering school graduates, and are hiring more people as they alter technology industry hiring patterns.

“We had to convince parents to let their kids work with us. Most people had no idea of what a products startup can offer,” said Gunjan Patidar, Zomato’s chief technology officer, talking about the company’s early days. “They know about Infosys and TCS because that’s where their cousins and friends have worked.”

Backed by Silicon Valley-based venture capitalists, these homegrown companies are not afraid to match salary packages offered by established foreign companies, and offer perks such as employee stock options.

Not everyone is born to be an engineer, but in India, many parents are determined to make it so for their children. India produces about 80,000 engineering graduates every year, according to Sandhya Chintala, vice president of the National Association of Software and Services Companies.

Engineering is considered a prestigious profession. In India’s close-knit family system, jobs can be associated with upward mobility, and can make a son or daughter a better marriage prospect. Children often have no say in the decision.

Working in information technology services with hundreds of thousands of employees, such as Tata Consultancy Services or Infosys, which handle other companies’ technology needs, has long been the easiest way for graduates to go abroad on job assignments, adding to their perceived social worth.

“I often say in India people first become engineers and then they decide what to do with their lives,” said Girish Mathrubootham, founder and chief executive of online customer support platform Freshdesk, which recently raised $31 million in funding from private equity firms Tiger Global, Accel Partners and Google Capital.

Freshdesk lost a potential employee in the early days to TCS because the employee’s parents wanted him to work for a well known company, Mathrubootham said. “Now we have an employee who went to work with Honeywell, but she came back within six months.”

As Indian companies like mobile advertising network InMobi gain a higher global profile, techies are putting more faith in being able to succeed in an industry traditionally dominated by Silicon Valley. On Thursday, Finance Minister Arun Jaitley gave the domestic industry further validation by announcing a 100 billion rupees ($1.67 billion) fund to provide equity and risk capital for startups.

“I was very clear in my head I wanted to join a startup because in a big company your job is extremely defined, but this gives me the satisfaction of building a product from the ground,” said Naman Sharma, who joined Zomato in 2011 after graduating from the Indian Institute of Technology in Delhi. Sharma, 25, heads Zomato’s mobile products team.

Sharma’s thoughts are being mirrored in engineering colleges across the country and tech companies are helping fuel those dreams.

Ecommerce company Flipkart plans to add 1,200 engineers to its team in 2014. Zoho has hired 540 employees this year, and Zomato is planning to add 700 people in 2015. These are big numbers for companies whose employees number in the hundreds or thousands as opposed to IT services companies. Flipkart, India’s biggest ecommerce company has a team of 13,000; and TCS, India’s biggest IT services company, had 300,464 employees as of April 16.

Himanshu Aggarwal, CEO of Aspiring Minds, which helps tech companies manage entry-level recruitment in India, said there are typically about 5,000 graduates from that pool who would make the cut for IT product companies. Of them, some people pursue advanced study programs, making the talent pool small and competition for it tough.

Amit Phadnis, site leader for Cisco India, said young potential hires now ask pointed questions about innovation, a fairly new phenomenon in India. Google India’s Jayashri Ramamurti, who oversees HR for its tech team, said while the company sees more graduates at engineering colleges considering startups as a viable option, Google hasn’t yet had a situation where someone’s declined an offer because of it.

Companies like Cisco, Google and Microsoft can be attractive for their size and global reputation, but some graduates might prefer a domestic option.

“[Most] startups are built by engineering graduates who can come back to hire from their colleges — there’s a bonding, and there’s the feel that they are working for an Indian company rather than a company based in the United States,” said Mohak Mehta, manager of the placement cell at IIT Bombay.

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(Editing by Robert MacMillan; Follow Nivedita on Twitter @tweetsfromnivi and Robert @bobbymacReports | This article is website-exclusive and cannot be reproduced without permission)

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