Atlanta Tech:
Software slump in metro area ripples to India
Fewer companies farming out work

BYLINE: KATHY BRISTER, STAFF
DATE: 01-30-2002
PUBLICATION: The Atlanta Journal and Constitution

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Atlanta's tech slump has moved overseas.

Local companies have scaled back orders to have software developed in India, said Vinay Chandra, president and chief operating officer of Resourcis.

Resourcis coordinates software development projects for other firms. It hires workers here and in India, where the cost of a software development project can cost half what the same work costs in the United States.

In 1999, 40 percent of Resourcis' business went to its team of overseas developers. Last year, India-based projects made up less than 20 percent of the company's $1 million revenue.

Chandra attributes the change to two things. First, software companies' budgets have shrunk. They want to keep a close eye on projects to make sure they don't exceed expected costs.

Second, it's cheaper to hire local software programmers these days. Layoffs have flooded the labor market with talented programmers. The plentiful supply has slashed hourly rates for contract workers, such as the ones Resourcis provides.

But a Resourcis competitor, Atlanta-based World Online, expects its 40 employees in India to stay busy. Software companies are looking for ways to save money, said Chief Executive Officer Chand Akkineni. Developing software components overseas is a way to do that, said Akkineni, who has been sending work to India since 1994.

Both Chandra and Akkineni could be right.

Research firm Yankee Group predicts software firms ultimately will beef up their own in-house staffs and lessen dependence on contractors here and abroad.

But at least one local software company is choosing to save money by moving work to India. Software maker Mapics this month announced it would cut 60 programming jobs, half in its Alpharetta headquarters, as a way to save money. The company expects to save 40 percent to 60 percent on software development by moving the work to India, said Mapics Chief Operating Officer Peter Reilly.
------------------------------------------------------------------------------------------------------------------------Synthis on the move
Synthis Corp. is moving into Georgia Tech's Advanced Technology Development Center this weekend. The company makes software that allows companies to create a code-and-text blueprint for Internet software applications. The software is a project tool designed to make it easier to turn a customers' requirements into technology.

Synthis' six founders met at Georgia Tech. Five have graduated; one still is working on his undergraduate degree. They started the company in June 1999 and spent the next two years paying for software development by doing consulting work.

The company launched its software product, Adalon, in October and dropped the consulting gig. It now has 35 customers paying from $500 to $5,000 for each employee using the software. Customers also pay recurring software maintenance fees. Synthis expects to be profitable within a month.
------------------------------------------------------------------------------------------------------------------------Three Pillars acquired
Norcross-based network security firm Three Pillars has been bought by TruSecure, a larger rival based in Herndon, Va. Terms of the all- stock transaction weren't disclosed. TruSecure will keep Three Pillars' 30 local employees. It also will continue to operate Three Pillars' 22,000-square-foot data center on Scientific Drive. Three Pillars was founded in June 2000 and raised $9.2 million from venture capitalists. It had revenue of less than $1 million last year. TruSecure, which provides security management and monitoring services, brought in $30 million in revenue last year.

kbrister@ajc.com