Mike Bates, HotWax Systems CEO, keeps in touch with the Indore team throughout the day, but also visits the office every year. Here he is with Jacopo Cappellato, CTO, Anil Patel, COO, Ashish Vijaywargiya, VP of Operations, and John Bates, Leadership Communication Expert and International Speaker
“I was in Bangalore, India, the Silicon Valley of India, when I realized that the world was flat,” confided three times Pulitzer winner Thomas L. Friedman at the beginning of his international best-seller, The World Is Flat: A Brief History of the Twenty-first Century. I was just starting out my senior year in high-school when I read this book, more as a means to procrastinate from studying for my finals than anything, when the magnitude of globalization’s influence on my future hit me.
In 2004, Friedman travelled to India to report on how technology has connected the East and West in recent years. Instead, he was surprised to find a level of real-time communication and collaboration that practically leveled the global economy playing field, where individuals from any part of the world were now able to directly compete with giant corporations.
He first had this realization visiting Infosys in Bangalore, a city widely considered to be the Silicon Valley of India. There he saw Indian engineers in a modern outsourcing industry, connected to a global supply network in real time, and producing work at the same quality level as any other company in the West. He realized that businesses truly went global the moment technological platforms allowed work to be delivered from anywhere to anywhere, and categorically declared that the world was no longer round: it had become “flat” again almost overnight.
With almost a hundred IT professionals in Indore, Madhya Pradesh, the HotWax building reminded me of Friedman’s historic golf game in one of Bangalore’s IT parks, where he was advised to “aim at either the Microsoft or IBM” buildings for a successful shot.
As far as I was concerned, I’d had decent grades all of my life, grew up with access to technology and the internet, studied foreign languages in school and traveled. But the instant I read got my hands on this book, I knew that no level of learning would ever again be considered sufficient. There would be kids on the other side of the world equally exposed and curious, equally hungry for knowledge and hardworking, maybe more. I stayed up late that night to study, and many nights after that, too.
When I started working for HotWax Systems, it felt natural to work with experts on 4 different continents, including many talented Indian software developers and business analysts. I had a hunch about just how good they would be at what they do, but their dedication and drive, their creativity and hard working natures surpassed even Friedman’s accounts. With almost a hundred IT professionals in Indore, Madhya Pradesh, the HotWax building reminded me of Friedman’s historic golf game in one of Bangalore’s IT parks, where he was advised to “aim at either the Microsoft or IBM” buildings for a successful shot. In fact, our offices in Indore are just down the block from Xerox, right across from the city’s impressive convention center.
Many of the author’s predictions have come true since the first release of “The World Is Flat” in 2005, and Indore stands as a testament to the rise of a new middle class of intellectual professionals. This has, in turn, influenced mindsets and changed lives for the better, as Indorians have managed the epic feat of uniting and cleaning their way up from ranking at the 149th place nationally in city cleanliness, only two years ago, to officially become India’s cleanest city in May 2017.
A natural choice for tech companies
“Indore was really Anil’s choice,” Mike Bates, HotWax CEO, told me the day Apache OFBiz Accelerator received both the “Rising Star” for ERP software, and the “Great User Experience” awards from Finances Online. It was business as usual in our Salt Lake City office, and we had just finished a meeting with our teams in New Zealand, Italy, India, and the US, discussing upcoming client demos for companies in Australia, Pakistan, and Denmark. “Anil is from Bhopal, which is near by to the North. He has a lot of friends and family in the area, and knew just how much potential that place would have.”
A technology innovator, Anil Patel first founded Aditisoft in Indore, India in 2001. He’d been a long-time champion of the Apache OFBiz® open-source project, and an integral member of the OFBiz community, serving both as a committer and a member of the OFBiz Project Management Committee for many years. His dedication and thousands of hours of contribution to the project recently earned him a spot among the Apache Software Foundation Members, as caretaker for the foundation’s evolution and progress. It was only natural then, that when HotWax Systems and Adidisoft joined forces in 2007, Anil would become COO.
It wasn’t only Anil Patel’s brilliance and expertise that made Mike Bates take a Columbus-like leap of faith, and consider expanding into the Far-East: “Indore itself is appealing because it is a commercial hub conveniently located in the central area of the country. It’s also strong educationally, and was the the first city in India to have both IIT (Indian Institute of Technology Indore) and IIM (Indian Institute of Management Indore).“ With an average literacy rate of 87.38%, the city of Indore ranks higher than the national average of 74%.
“Whether it was India or Indiana made little difference to me. We were just looking for the best OFBiz developers we could find anywhere.” – Mike Bates, HotWax CEO
In fact, Indore is known as Little Mumbai for being business-friendly, and is considered the commercial capital of Madhya Pradesh. Indore has long been the capital of the maharajas, and is the site of imposing palaces and historical buildings like the Daly College, one of the oldest boarding schools in the world, founded in 1870 to provide princes and rulers with education.
Starting in the late 18th century, Indore has grown into a commercial and industrial center, specialized in manufacturing everything from chemicals, tiles, cement, iron and steel, furniture, hosiery, to sporting goods, and automobiles. Madhya Pradesh Stock Exchange (MPSE), originally set up in 1919, is the only exchange in Central India and the third oldest stock exchange in the country. Reaching a GDP of US$14 billion as of 2011, Indore is also the largest metropolitan city in Central India, its more than 2 million inhabitants making it the most densely populated municipality in the region.
With its many quirks and attractions, such as the the largest Ganesha statue in the world, or the world-renowned traffic police officer who Moonwalks and dances his directions, Indore has so much to offer in its love for cricket, festivals, temples, shops, sweets and cuisine, that it was even named “Best Foodie City” of India. But the real reason why Western entrepreneurs are flocking in is the talented tech workforce.
As Mike Bates put it, “Whether it was India or Indiana made little difference to me. We were just looking for the best OFBiz developers we could find anywhere. We found Scott in NZ, Jacopo in Italy, David Jones in Ephraim, Utah, Andrew Zeneski in NYC. Anil was in Washington at the time, and he had a company of 12 developers located in Indore. We worked with them as subcontractors for about 6 months and knew we wanted to merge them into HotWax. It was a great decision.”
Two years into the Smart City Mission, Indore has already become India’s cleanest city, due to the public’s active participation and dedication.
It’s all in the mindset
HotWax wasn’t the only tech company to notice this region’s potential, as work at Infosys’s new 130 acres Indorian development centre started in March 2017, at an investment of roughly US $60 million. Infosys plans to employ about 13,000 people at this new facility alone. Other big players like Tata Consultancy Services and New Jersey-based Collabera have also announced plans to open campuses in Indore, along with several small and medium size software development firms. With facilities such as free Wifi across the city, IT parks, and a biennial Global Investors’ Summit which attracts investors from several countries, it’s easy to understand the entrepreneurial appeal.
But not all business models are made equal, something that HotWax founder and CEO Mike Bates takes pride in: “Unfortunately, a lot of companies in India lead with the idea of ‘cheap labor.’ So they hire junior developers right out of school, give them little to no training, and throw them onto projects in big groups. They’re charging $25 or $30 an hour, and deliver exactly the level of quality that you’d expect for that kind of pay,” he said. “We call that the ‘body shop’ model. Put as many people on the project as possible at ridiculously low hourly rates. Generally that creates chaos, involves high turnover, and generates low quality and messy code.”
“Our developers are provided up-to-date equipment, a nice facility, meals, tea, teambuilding activities like ping pong and a cricket league, etc., so they can relax and stay very productive.” – Anil Patel, HotWax COO
Anil Patel’s Aditisoft was set up from the very beginning with a very different mindset, which was continually nurtured and encouraged after its acquisition and affiliation to HotWax Systems: “We take an entirely different approach. Our team members are recruited very selectively, and then trained extensively. It is not uncommon for a developer to train and work on internal projects for 6 months or a year before becoming billable on a client project. And that is a focused training on our specific technologies and best practices around web app development.”
“We also manage them closely. Each project lead will have many years with the company (some more than 10 years with us now!), and will be a powerful ally and mentor for the less senior members of the team. Our developers are provided up-to-date equipment, a nice facility, meals, tea, teambuilding activities like ping pong and a cricket league, etc., so they can relax and stay very productive,” Patel added.
The company’s transparency in code attribution, and extensive QA process have made it famous among IT professionals and programmers in Indore, and a popular internship provider. As Patel put it: “We don’t even try to compete with other companies at the level of hourly rate. To some degree, you get what you pay for, and this is one of those cases for sure. If our developer costs 3X the rate, you can rest assured that he will deliver 6X the value.”
Indore’s bright future
It’s this kind of mindsets that has lead to Indore being selected as one of the over 100 Indian urban areas to be developed as a smart city. Launched by Prime Minister Narendra Modi in June 2015, the Smart Cities Mission represents the Indian government’s urban development vision to integrate multiple information and communication technologies. A total of US $15 billion has been approved by the Indian Cabinet for the development of 109 smart cities and rejuvenation of 500 others, making them citizen-friendly and sustainable. As part of the first 20 such cities to be modernized, Indore will receive central assistance of around US $80 million over 4 years, supplemented by local and state budgets.
Only 2 years into the Smart City Mission, Indore has already emerged as the cleanest city in India in the Swachh Survekshan 2017, announced by Union Minister of Urban Development Venkaiah Naidu earlier this week. Indore climbed 24 spots from its 25th position in 2016, having moved up from the 149th position over the previous two years. Each city was evaluated on five parameters — waste collection, solid-waste management, construction of toilets, sanitation strategies and behaviour change communication.
“It makes me so proud to witness the progress that the city is making thanks to its wonderful inhabitants, and I know our HotWax family in Indore has contributed to the positive change the city has experienced.” – Mike Bates, HotWax CEO
Behaviour change was definitely the key to Indore’s success, and the song “Ho halla”, encouraging locals to join the movement for a cleaner town, and played by sanitation trucks throughout their trash collection rounds, is said to have been the secret ingredient to uniting residents as equal partners in the city’s cleanliness mission. This feeling of togetherness is what the locals call “APAN.” It’s the same feeling that HotWax Systems is striving to instill among its employees.
For HotWax CEO Mike Bates, this is just another happy confirmation of the decision he took back in 2007: “We took every measure to make sure that HotWax employees in India are part of the larger, international HotWax family, that they are trained, nurtured and encouraged to grow and flourish. The city of Indore was a gamble, in a way. It turned out to be a great bet. It makes me so proud to witness the progress that the city is making thanks to its wonderful inhabitants, and I know our HotWax family in Indore has contributed to the positive change the city has experienced.”
For HotWax Systems Indore and its international network alike, the future is bright: “We intend to continue investment and growth. We’re not in a race to grow the biggest team; we’re sticking to quality before quantity,” said Bates.
13 years after Friedman’s visit to India, his revelations are no longer a surprise, they’re a given. But there’s continued amazement in the way technological advances have, and continue to connect people around the world, to facilitate collaboration, and improve lives. And how proud it makes us all, to have a chance to be a part of Indore’s story.
Apache OFBiz® is a trademark of Apache Software Foundation.
