Code across the border

India and pakistan share several things other than a violent past and a contentious border. A common history, and a passion for cricket are just two of them. Now add a growing IT industry to that list.

“At $3 billion, the Pakistan IT industry is much smaller than the Indian industry but we expect it to grow to $11 billion by 2011,” says Jehan Ara, President, Pakistan Software Houses Association (PASHA). PASHA is Pakistan’s only IT body with over 360 companies as members. Currently, close to a hundred thousand people are employed by the IT industry, which is growing at 40 per cent year on year.

Interestingly, half of Pakistan’s revenues come from the domestic market which is growing at a rapid pace. In the export market, the main markets are the US, the Far East, the UK, Rest of Europe and the Middle East. The software industry is spread across three cities— Karachi, Islamabad and Lahore. Tech MNC giants like IBM, Microsoft and Oracle have set up development bases in the country.

“The cost of labour is Pakistan is 30 per cent lower than in India. In that sense, it’s a great base for offshoring operations. The quality of talent is also very high. As a result, we have some great success stories in the country,” says Ara. “Recently, Adobe Systems invested in an Islamabad-based start-up called Scrybe. There are several exciting start-ups, especially in the product space in the country,” adds Ara who sees Pakistan creating its own niche in the IT outsourcing space rather than competing with India.

Ara admits that the political uncertainty in the country translates into additional energy expended in convincing companies to invest in the country; but she is not overtly worried about the future.

“Some of the largest IT companies in Pakistan have close to a 1,000-odd employees and clock revenues in the region of $20-25 million. So, we possibly will never be as large as India when it comes to size of the industry. But we can collaborate when it comes to outsourcing,” says Ara.

“The salaries of IT professionals in Pakistan are approximately 30 per cent lower than those in India, while telecommunication costs are also low as compared to any other offshore locations, which make Pakistan an attractive outsourcing destination,” reads a recent Gartner report on the Pakistan offshore industry.

The report further stated that the government of Pakistan had formulated a comprehensive IT policy to encourage the private sector. The government plans to develop IT parks in major cities, while 750,000 square feet of space in the Pakistan Software Export Board (a government body to encourage software exports) has already been leased to IT companies.

— T.V. Mahalingam