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December 11, 1997


The India association

Computer Associates is building a $5m development
centre and a 100% subsidiary. The investments will
total $100m over the next five years.

The US-based Computer Associates Inc and The Chatterjee Group have signed a memorandum of understanding to set up the Computer Associates TCG Software Services Centre, or CATS, a state-of-the-art technology outfit in Calcutta.

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The hi-tech centre, with an initial investment of $5 million, is a 51:49 joint venture between CA and TCG Software Services, an affiliate of TCG, the New York-based investment management firm.

Also to be known as the Asian Gateway or the Digital Village, the centre will provide software development, support and services to CA clients and partners worldwide. For the present, the company will function out of a hired office.

The MoU signing ceremony was witnessed by West Bengal Chief Minister Jyoti Basu, Industry Minister Bidyut Ganguly and West Bengal Industrial Development Corporation Chairman Somnath Chatterjee.

CA President and Chief Operating Officer Sanjay Kumar told reporters that his company came to India "not looking for low-cost talent but because we need the talent''.

Making a distinction between CA's functioning and that of other multinational IT companies, he said his company would not get into body-shopping or component building, approaches that are popular with Western companies in the country.

The project seeks to create products by building around CA's core software and the first branded product from the centre would be out within the next six months, Kumar said.

The new outfit's functions are clearly defined and CA's existing jobs worldwide will not be brought into India for development, the 35-year-old COO and one of the youngest presidents of a Fortune 500 company promised.

The Calcutta-based centre will have its own niche area of integrating technical expertise to add value to the core product as required by CA's customers.

The company has also applied to the Foreign Investment Promotion Board to set up a 100 per cent subsidiary in India and this is expected to come up before the board on December 13.

CA is planning to expand its operations, currently confined to Delhi and Bombay, to five other cities and to this effect will invest $100 million over the next five years on people and infrastructure.

Denying that there would be a clash of interests between the subsidiary and the joint venture project, Kumar said the former would deal only with the sales and marketing of CA products while the latter would build additional technicalities into CA's core products.

Initially employing 200 people, CATS is expected to employ over 300 technical programmers and support staff by the end of 1998.

Also on the anvil are plans for a "software incubator'' which would be a modified version of a venture capital fund in that entrepreneurs' ideas to develop products could be realised in exchange for an equity investment.

If required, CA would also use its distribution channels to market the product across the world, Kumar said.

TCG founder and Managing Director Purnendu Chatterjee said that recruitment for the project has already commenced. However, he was unable to give a definite timeframe regarding completion of the actual project.

The project is aimed at positioning West Bengal as a technology frontier and a home to "knowledge-workers''.

- Compiled from the Indian media

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