Another infotech firm has decided to call it quits. Bangalore’s rising costs have pushed Texas-based Pervasive Software to shut down its 18-month-old development centre in the city.
This move by the data infrastructure software company, which had over 50 people here, comes within weeks of Apple Computer’s decision to exit Bangalore. Apple’s move too was said to have been guided by cost considerations. Besides, Powergen had last week pulled out of India blaming poor quality of services for its UK customers.
“We are consolidating technical operations for our integration productline in Austin and closing our Bangalore-based subsidiary this month, while still maintaining an India presence through our long-time development partner, Aztec Software,” said Pervasive president and CEO John Farr.
Pervasive — which provides data infrastructure software — had commenced operations in Bangalore when it acquired another Austin-based company Datajunction, which specialised in data integration products.
“The potential cost savings of an off-shore development operation can be mathematically compelling. However, we have found that the complexity of managing such an operation and the increasing costs of labour, employee turnover, training, and facilities in a hot market such as Bangalore make it challenging to ultimately realise those savings,” Farr added.
The company has placed an local manager, Jaisimha Muthegere, as the director of its India software operations. Muthegere had earlier announced that Pervasive would establish a world-class R&D centre in India by recruiting top-level engineers.
He had also said that the centre would focus on product development, including core R&D work, and not just maintenance, to address customer and market needs.
Even in September 2005, the company had reiterated its commitment to India and had announced big expansion plans.
When contacted, Aztecsoft (previously Aztec Software) said this strategic move to shift its captive development centre has no bearing on its long-standing relationship with Pervasive. “Aztecsoft has a six-year-long relationship with Pervasive Software. Over the years, we have developed several of their products and we continue to do so,” an Aztecsoft spokesperson said.