Cognizant, AOL, Perot Beef Up India Presence As Offshore Growth Continues

Despite setbacks that included Dell repatriating some technical support operations from India and vocal opposition from some politicians, it appears the move by large companies to shift technology work to low-cost countries such as India will continue largely unabated in 2004.

Application maintenance and development firm Cognizant Technology Solutions Corp. said Monday that it will spend $40 million to build more than 600,000 square feet of additional office space in the Indian cities of Pune, Chennai, and Bangalore. "Our deal pipeline is the strongest it's ever been," Cognizant CFO Gordon Coburn says. Cognizant will also hire an additional 4,000 IT workers in India next year. The company's headcount, which stood at 6,700 in June, will hit 13,000 by the end of next year, Coburn says. Cognizant's customers include Sprint, Northwest Airlines, and The Metropolitan Life Insurance Co.

It also appears that U.S. companies are still intent on bolstering their presence in India, where programmers can be hired at wages that are less than half the prevailing domestic rate. An America Online spokesman confirmed Monday that the Internet service provider is holding internal discussions with an eye to opening a development office in Bangalore. "It would be a small number of programmers," says the spokesman, who declined to provide more details. Also Monday, service provider Perot Systems Corp. said it would spend $105 million to buy out an Indian joint venture partner--HCL Technologies Ltd.--so it can operate a wholly owned services facility in the country.