Fifteen years ago, Bangalore was a popular town for retired civil servants drawn by its salubrious climate and laid-back lifestyle. Now, it's the high-powered software capital of India, a city that can barely cope with its newfound wealth.
Since the 1980s, Bangalore's university has produced 30,000 new engineers a year, 7,000 of them computer engineers. This pool of English-speaking specialists in hardware and software, willing to work for bargain salaries by international standards, made Bangalore a magnet for multinational companies.
N.R. Narayana Murthy, an engineering graduate from the prestigious Indian Institute of Technology, was one of the first to understand the lure of Bangalore. Along with six friends who pooled just $300 each, he set up Infosys in 1983, one of the country's first software companies. Today, the company is worth more than $1.3 billion.
In March, Infosys began trading on the Nasdaq Stock Market, the first Indian company to be listed on a U.S. exchange. Its shares soared as much as 50 percent on the first day of trading.
Taking a cue from Infosys, NIIT Ltd., another Indian software company, is seeking to list on Nasdaq within a year.
Once the Indian Government lowered taxes on foreign chip and computer manufacturers, a host of companies including Hewlett-Packard, Motorola, IBM and Novell arrived.
Today, the city has 250 software companies, many of them linked by satellite to home offices in the United States. They employ 50,000 of Bangalore's 1.5 million work force, and contribute 30 percent of India's software exports totaling $4 billion.
Salaries are lavish by Indian standards. In a nation where per capita income is $300 per year, yuppie couples in high-tech jobs weekend at exclusive country clubs, and the hottest status toy is a home theater system.
But investors complain of a collapsing infrastructure for a population that has doubled to 6 million in just eight years. The roads are bad, the power inadequate and the phones unreliable. Efforts to build an international airport have met repeated delays. The city loses large numbers of programmers to the West every year.
New companies are looking at Hyderabad, where a business minded techno-savvy chief minister appears determined to topple Bangalore as India's software Mecca.