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Apple: “India Is Not Good Enough”

Posted on Monday, Jun 5th 2006

Long time ago, at a supremely formative juncture of his life, Steve Jobs had visited India. It was an experience that had touched him deeply, moved him unexpectedly, and changed him fundamentally.

In light of that, Apple’s recent departure after 2 months of experimentation with an India operation seems rather callous.

No one knows the WHY. I don’t know either. I knew that Sina Tamaddon and Jean Marie Hulot were exploring the option of setting up a development center in India. This scrapped unit is not a development unit, but a call center. Also to be noted is that Jean Marie has since left Apple, one of the several high level departures (along with Jon Rubenstein, Avi Tevanian, Nancy Heinen).

I do have some thoughts on why Bangalore is (was) about the worst location choice that Apple could have possibly made.

Apple is a cult. Employees drink the water that trickles down from the fountain, after washing Steve Jobs’ feet. In Indian religious terminology, this is called Charanamrita (literal translation: the ambrosia that flows from the feet of the Lord). This presupposes the fact that Apple enjoys tremendous employee loyalty. Jobs expects ultimate loyalty from everyone (he offers loyalty to no one, but that’s a different topic).

This culture would NEVER fit with Bangalore’s mercenary Information Technology / BPO workers. They don’t even know how to spell loyalty. They couldn’t care less about cults. Show me the money is the mantra that prevails at the end of the day, and the best Apple could have hoped for, is a 600 person call center with 40%-60% churn.

Against that backdrop, Apple, I suspect, felt lost.

The mistake Apple made, I think, is Bangalore.

Not India.

There are other places in India where people’s emotions run high, loyalty IS valued and offered to those who deserve it. Passion comes before Price. It is there, that Apple could have found its soul connection.

Not in the cultural desert of Bangalore.

This segment is a part in the series : Apple

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Funny you should say that… most Indian BPO companies are experiencing attrition rates of upto 100%… this means that no one remains in the same team for more than a year.

There are means for controlling attrition, and Apple could have actually done that if they wanted to, but unfortunately money is a big part of this equation of skewed supply and excess demand. Not just in Bangalore, but anywhere BPO is being run.

Guess it’s more a statement of the nature of work rather than the city location.

ZV Monday, June 5, 2006 at 7:59 PM PT

While attrition is very high everywhere in the India BPO industry, some cities are better than others. Did you read my Team Of Twenty One and The Case For Calcutta?

Sramana Mitra Monday, June 5, 2006 at 9:06 PM PT

oh please.. loyalty you say..

i worked in kolkata for about a year, the only loyalty the bengalis have is towards their own “dadas”..

the dada culture is so bad that pretty much every non-bengali ran away from our company..

of course.. not to forget the bengali loyalty to the british.. turn around, kolkata hasn’t changed from the days of the raj.. i should say thank god for the british, else it would have been worse.. i wonder wat can be more worse..

a bangalorean.. Tuesday, June 6, 2006 at 12:52 AM PT

ouch!!!

But there is some truth in what you are saying… however, I feel there are a few other factors which may have contributed more –
1) The MAC user base -is pretty low in India. So the training cost/time would be pretty high
2) MAC experts in India come from the freelance design community, these folks wouldnt want to work in a support/contact operation and in most cases these folks arent very good at spoken english (I am talking about the layout folks in newspapers, the local printshop and so on)

Every person who will call a mac contact center would be an expert in the first place, so supporting them would be pretty tough and like you have pointed, it has to be a religion.

So it may not just be loyalty in bangalore that is the problem. For an apple like product, something beyond loyalty is required…

Which city would you have choosen? Do you think it would have been easier in say Tel Aviv or Taiwan or Mumbai. I think it would have been equally tough.

One option may have been to try this on a build-operate-transfer model for the first 2 years, irrespective of city.

… appreciate your time…

Sbhat Tuesday, June 6, 2006 at 1:45 AM PT

Charanamrita- fantastic. thanks so much sramana for nailing the Jobs effect. i really like that word.

James Governor Tuesday, June 6, 2006 at 5:05 AM PT

“Not in the cultural desert of Bangalore.”

Care to explain the above statement?

Naveen Tuesday, June 6, 2006 at 5:43 AM PT

Hi,

Bit surprised by your negative bias towards Bangalore. I strongly disagree with your cultural remarks about Bangalore. You can not generalize about people staying & working in a location.

If your views were right, there would’nt have been any industry in Bangalore. You really shouldnt make baseless nagative comments on the people who still stay there and work with great loyalty and passion.

It was a big dissappointment from your side. In a current time where a place like Bangalore is multicultured, your thinking is very narrow and biased.

Jain.

veerjain Tuesday, June 6, 2006 at 8:50 AM PT

Wow, looks like a lot of raw nerves have been touched by this article. I am going to have to take this one by one.

Let me take the easy one first. Sbhat’s points about the lack of MAC Userbase in India is interesting. However, call-centers are never built with the assumption that experts in the field will be answering the calls.

Typically, they use a “knowledge-base” which captures as many frequently asked support questions and scenarios, and call center agents search the knowledgebase to walk customers through the problems, and hopefully onto the solution. Companies like Kanisa, Serviceware, Rightnow have been built upon this model of providing the knowledge software which enables call-centers to convert $5/hour people into “experts”.

Thus, I do not think the lack of MAC experts in India could have been an issue for Apple.

Sramana Mitra Tuesday, June 6, 2006 at 4:43 PM PT

On Bangalore being a “cultural desert” … well, Silicon Valley has also been pretty much a “cultural desert” until recently.

It might be easier to explain what is not a cultural desert. New York is not a cultural desert. It is a capital of Theater, Opera, Music, Dance, Fashion, … It has museums every few blocks. And most importantly, it has people who care to spend time and money on consuming culture. It also has artists who dedicate their lives to producing culture

By that definition, Paris, London, Florence, Berlin, Washington, Boston, San Francisco, Bombay, etc. are good cities for culture, albeit of varying degrees.

Neither Bangalore, nor Silicon Valley qualify as good places for culture. They are relatively new “capitals” of industry. The money is mostly new money.

Typically, wealth precedes culture. In Florence, during the renaissance, it was Lorenzo Medici’s patronage that gave rise to the tremendous artistic boom. In Silicon Valley, a small amount of such patronage exists. It is getting better over time, but so far, it is nothing compared to the other cities I mentioned.

Bangalore, by this definition, is not a cultural capital. And the high tech industry did not develop there because of its fascinating cultural appeal. Jamshedji Tata’s steel capital in Jamshedpur was not chosen because of its cultural appeal. It was chosen because of the proximity of natural resources. Similarly, Bangalore became the IT capital because of a good supply of educated engineering talent, and from what I know, because of relatively good weather compared to the rest of India.

Calcutta, whether you like it or not, has always been a cultural hotspot for India. Bengal renaissance produced a series of patrons of culture. All the Arts are very well developed, produced and consumed consistently.

Chennai also is a strong cultural hotspot, especially around Carnatic music. Lucknow was a major center for North Indian classical music and dance, especially Kathak.

I hope this explains “Cultural Desert”, Naveen and Veer Jain. Bangalore has not had a Renaissance of cultural patronage. It may feature somewhere in the city’s future, because there certainly is a wealth build up that’s occuring. But it takes a LONG time to really develop to a sophisticated level.

Sramana Mitra Tuesday, June 6, 2006 at 5:02 PM PT

And to “a Bangalorean”: I will only say that I disagree with what you say. The IT / ITES population in Calcutta does not fit your description. What you say may be true in more blue-collar / public sector areas, especially where the trade unions are strong.

One of my earliest recruits at DAIS was Sriram Sundararajulu, who came to work in Calcutta from the South. He stayed with us for 4 years, and as far as I know, would still love to work with many of his Bengali colleagues.

Sramana Mitra Tuesday, June 6, 2006 at 5:11 PM PT

Finally, James: Thanks.

What I want to say is that the Jobs cult would be easier to feed the more emotional / brainwashable folks, rather than the mercenary / business savvy ones. I wouldn’t be surprized if Apple was taken by surprise by the lack of response in Bangalore to Steve Jobs’ Charanamrita.

Sramana Mitra Tuesday, June 6, 2006 at 5:19 PM PT

Bangalore is a cultural place. The Theater, Music, Dance, Fashion, Sports, Movies… do exists in Bangalore. It is the great culture of Bangalore to respect others and not to downplay other cultures.

For a newcomer, unless he thinks as a global citizen first, he would surely feel frustated and lost in places like Bangalore. The weakness of such people get exposed very early here. For them, going back to the places where they identify with, is a good choice.

Its good for Bangalore too….

Offcourse, Apple is welcome to come here or go-back from Bangalore anytime. Its their choice. As it is the choice of the individual to choose the company he wants to work with. Its wrong to DEMAND loyalty from Apple.

`Jain.

jain Tuesday, June 6, 2006 at 11:22 PM PT

[…] At the heels of Apple pulling out of India comes IBM’s announcement that they will triple their investment in India to $6 Billion over the next 3 years. […]

Sramana Mitra on Strategy » Blog Archive » IBM: “India Is More Than Good” Wednesday, June 7, 2006 at 10:48 AM PT

Yes Blore is a very cultural city (or town, maybe). Here you will find cultured people, having raised pigeon holes in their agircultural lands (where most of the cultures lay), and renting them at astronomical prices and demanding 10 month’s advance in order to protect their culture.Highly cultured autorickshaw drivers who charge double or triple money from any person outside of south india, in a very cultural manner. Highly cultured bus drivers who does not have to do much but maintain their culture, as there are not many bus routes to ply on. Higly cultured common people who pelt stones at office-goers and glass offices, in order to forcefully show respect when one of the superstars dies, and keep bangalore culturally intact by keeing it totally closed for 3 days, without any prior notice (the bandh started from just after lunch hours on a weekday, and I was hurt by a stone).
Also their are so many pubs and disco theques, where people exchange everything from culture, beer and body fluid.
Also, the people from this part of the country are so culturally brilliant, and want to keep them intact, that they again again say on your face that hindi is not their national language, and expects the IT companies, the soul reason bangalore became famous for in modern times, to hire only south indian speaking citizens of India.
In fact I sometimes fall into this bottomless pit of culture, only to find out I have fell over a pothole in the road (footpaths are not meant for walking, they are meant for shops and driveways). But then, potholes should be there, as that is also a part of this culturally electrifying city (or maybe town).

ar Monday, June 12, 2006 at 2:12 PM PT

I think if anybody has passion for quality work in IT, still Bangalore is the best bet. Let others beat that first then we will talk about those places.

We will talk about how Calcutta is doing with respect to Bangalore may be after 10 years lets not compare till then both with respect to the statistics of revenue and number and quality of IT workers and opportunities.
A software company needs a lot of “professional” people and I guess even the huge supporter of Calcutta will also never can imagine that a company can hire 3000 people from Calcutta market in 2 years. Let Apple go to Calcutta and execute their initial plan or hiring 3000 people by 2007. And finally Apple showed loyalty to the initial 30 people who joined them by giving them 2 months salary as part of buying the notice period of them.

I recruited a person from Calcutta who was a UI designer for 6 years and was getting 1.4 Lakhs per year. He worked in our company for 2 years learned other soft skills and technology and usability engineering. Now working as in an MNC and getting 7.5 Lakhs per year after getting promoted there recently. I didn’t ask him whether he is missing culture or not but I am very sure he saw what value he can add by his work and instead of watching and enjoying others work (what we call art in typical sense) he is continuously creating ‘art’ through his value addition and getting the satisfaction of creation (same I guess for any professional) at the same time getting recognition. Did I feel that he is doesn’t have loyalty? Nah … I would have done the same thing like any CEO will do if get more funding for the same share of the company from a different VC with bigger opportunity. All depends on goal of life.

Loyalty is a complex word. When the companies, be it in any part of the world, faces problem or gets sold or gets closed, the people who worked for 12 hours a day and on weekends if requried in their cream time of life to make things better, even don’t get due time or share of the sale as their loyalty reward. At that time all the management talks about is what is legal on paper. If on paper you are supposed to get some share you will get it otherwise not. If on paper you are supposed to get paid for the notice period you will get paid for that period otherwise not.

So I suggest to ALL employees including CEO that show your loyalty after keeping your papers ready, after making sure that you get a good salary for 12 to 14 hours of work daily. If you think somebody else will value your work more and you get better opportunity to learn and grow and have fun, talk to your current employer about it and let him justify why he thinks that currently what he is doing is better for his career.

The people who works in good company can very easily see that the company is recruiting people from other companies by paying 30% raise and asking it’s own employees to stay back though those employees can also get 30% raise in other good companies. In a country where almost 70% of the salary goes in just for buying food for the family and stay in a decent house avoiding that 30% hike at a junior level or mid-level is very hard. At senior level people move a bit less not because they are loyal it is more because they have already proved themselves in the company and getting respent and enough money to save 70% of their salary and 30% on food and stay of the family.

I am curious if somebody can tell me how many companies are “loyal” to their employees? I think the % will be much less than the % of “loyal” employees.

Santanu Tuesday, June 13, 2006 at 2:52 PM PT

Definitely agree with Santanu.
Yes, Blore has more quality work than anywhere in India, in terms of IT. This has been more enhanced by the advent of major product companies here.
See, inherently the very notion of outsourcing is offloading of work that is repeatable, does not require much intelligence, and can be remotely monitored. Maintenance work fits squarely into this definition. And big IT service companies make money on long-term maintenance contracts. And these companies hires the best engineers from best colleges, and make them do the work that any arts graduate, if trained a little, will be able to do.
But the situation is not the same here with smaller service companies, and major product companies. There is a concious effort to get some good work done here, at a cheaper price.
Its a great thing IT businesses have concentrated in this city.

Santanu’s realization is actually another facet of the topic Sramana started. As this industry has already existed in this city for sometime now, people have realized in the American way of doing business, “loyalty” means investment in a person in monetory terms, and the ROI. But people have realized this here, and always look for better opps in other companies.
Also, there is the infamous business life-cycle of the IT industry, where nobody knows how long the good times will last. So make hay while the sun shines.

ar Wednesday, June 14, 2006 at 11:37 AM PT

I agree, that Bangalore is by far the best in India in terms of quality of work that you can do in engineering jobs. However, this discussion started with Apple’s call-center, which is hardly a quality of work oriented issue. Therefore, I don’t think Bangalore was the best choice for this operation.

And to understand the context of my post, you have to know something about Apple’s culture in Silicon Valley. It is a “cult”.

My point is that it would be easier to build a cult in Calcutta than in Bangalore. That’s all.

On company showing loyalty to the employees, typically, in Silicon Valley, all employees get stock options. In Bangalore and in the rest of India, I suspect, this is not the case yet. Infosys built itself on this premise and did get strong employee loyalty.

Other ways in which companies invest in employees are training, further education (executive MBA, for example), etc. none of which I am sure Bangalore companies can afford to do, because people leave so soon in their tenure with a company.

If you are working for a small company without stock options, I would advise that go elsewhere. It’s not worth it. On the other hand, you do get to learn fast and have a lot of cross-functional / big responsibility in a small company which is highly leverageable later on in your career, so it is not unusual that people use small companies to build up experience and skills, before going for more senior jobs.

Santanu, I am sure you learned a lot from your present job, even if the stock option payoff has been minimal?

Sramana Mitra Wednesday, June 14, 2006 at 12:02 PM PT

oh please.. loyalty you say..

i worked in kolkata for about a year, the only loyalty the bengalis have is towards their own “dadas”..

the dada culture is so bad that pretty much every non-bengali ran away from our company..

of course.. not to forget the bengali loyalty to the british.. turn around, kolkata hasn’t changed from the days of the raj.. i should say thank god for the british, else it would have been worse.. i wonder wat can be more worse..

written by:
a bangalorean.. Tuesday, June 6, 2006 at 12:52 AM PT

i want to protest on these words……

i like to say you my dear friend that i am in bangalore for 8 years…I know how “kannadigas” are…we non bangaloreans just dont go out of bangalore because there is no alternative of bangalore right now,but it will be …and we are waiting for it…and you attacked the bengalies with the loyality towards english people…may i know any south indian freedom fighter’s name?can you answer me?i know you can not…so its better you shut your mouth on “dadas” and take care some rajkumar fans,who broke the glasses all over bangalore few days back.thanx

another bangalorean Tuesday, July 25, 2006 at 1:40 AM PT

Folks, please don’t submit comments about Bengalis versus Kannadigas at this forum. I am not going to authorize any further such comments. This is not the right forum for such discussion.

Sramana

Sramana Mitra Monday, July 31, 2006 at 10:03 AM PT

I am from a Bangalore based startup in the offshore analytics space – and half our core, IP creating talent comes from Calcutta. At some point as we scale, we would have to seriously consider Calcutta as a second location because at some point these employees would prefer (if they had an option) to “settle” in a known social and cultural environment versus continuing to struggle as an immigrant, never mind the salaries they earn.
The challenge for Calcutta in attracting serious IP development investment versus plain vanilla outsourcing is to start being able to attract managerial talent to move into the city…unfortunately as we speak that is percieved as a hardship posting to a non Calcuttan.
There are no easy solutions to the conundrum because the city has a mind of its own which is not going to change overnight into becoming a clone of Bangalore, because thats the in-thing. The Calcutta brand will succeed only when organizations are able to leverage this “mind-culture” to their advantage. Moving locations, because Calcutta is cheaper for people and real estate is short term because in 5 years these costs will catch up….so then what happens, do we ask people to move to Asansol?

Charles Tuesday, December 19, 2006 at 4:54 AM PT

really who wants to work in calcutta!

c Thursday, October 11, 2007 at 10:02 PM PT

Millions of Bengalis who want to be close to their families. That’s who!

Sramana Mitra Friday, October 12, 2007 at 11:41 AM PT

we all should understand what the subject was (about apple exploring or not exploring bangalore as the location ,they would want to be !)and when Mr.Mitra mentioned about culture,i really didnt understand why we took it to heart so much…it wasn’t a personal allegation!!!

I have lived in delhi/hyd/chennai/and now for the past 7 yrs in bangalore…all cities have this “i own this town”mentality when it comes to the localites..

every city has a 70:30 ratio where 70% is outsiders and 30% is localites..(kolkata is more of marwadi and panjabi then bongs) / Mumbai is more of UP’ites and bihari’s then marathi’s / and so is bangalore)

A little dope on the belongingness…people..pls grow up …there is no point saying “idi karnataka” or “amchi mumbai”…no metropolitan belongs to particular caste or creed…those days are gone…this sentiment is predominently the reason why cities dont grow!

joy Monday, July 7, 2008 at 4:07 AM PT

If bangalore city is capable of managing all the hitech and hardcore IT jobs on its own(read- thru the locals and by the locals),then what are lakh’s of telegu/tamil/gujrati/oriya/bengali/panjabi,doing in the blue chip establishments in the IT sector??
Iam sure they are not selling doodh or panipuri inside the intel/sunmicro / accenture etc…

Mumbaikar’s wont really like to be a doodhwala or a panipuri wala and thts what the UP’ites and bihari’s explored as an option to make money(dont forget..mumbai is still in india and its still open for people to come in and earn a living)..was there any harm in that?

In the same way,Bengali’s in westbengal werent so proactive in certain field and the marwadi’s and panju’s found that spot open to make money!!

So guys,hindi is still the national language..doesnt really matter if you like it or not..or if it is not allowed to be in the national air….

there were people who have asked me “do you know how to speak kanada” ….my only answer to them had been”i dont need to …i know my mothertongue with which i was born and i can speak ,read and write hindi as fast as the walter flows”

….thats all that matter to me!!!

joy Monday, July 7, 2008 at 4:17 AM PT

sorry ..i meant water…:-)

joy Monday, July 7, 2008 at 4:18 AM PT

OK..now i am writing 6 years after dont know if its too late. But yes one of the understanding could be lack of using MAC. We are all MicroSoft dependent in india and yes its controlling us in every way possible, considering the facts all are softwares work on MS nd we are being designed to work on MS, so its a grassroot problem.
They should first make awareness of MAC.

NISHIT GURURANI Thursday, April 29, 2010 at 3:00 PM PT

This is actually quite funny but also true. The level of UI design in a Mac is very significantly different from that of a PC. And yes, Indian software designers need to learn to do better UI.

Sramana Mitra Thursday, April 29, 2010 at 3:03 PM PT