IT firms plan New Zealand invasion

More IT firms from the US, Europe and India are poised to set up shop in New Zealand.

India is a large potential investor, with six to eight of the country's firms already talking to the Information Technology Association of New Zealand (ITANZ).

The interest comes as one Indian business, VCS Systems, last month began an e-mail drive touting for IT work in New Zealand to be done in Bangalore.

ITANZ executive director Jim O'Neill says several large Indian businesses already operate here, including IT labor contract companies HCL and Tata, which "see important things happening in New Zealand for them."

O'Neill says the Indian companies are into WAP (Wireless Application Protocol) development, Web design and related skills and are looking to bring work from the USand elsewhere and do it in New Zealand. At least four of the organizations have been put in touch with regional development organizations, while two are said to have business plans at an advanced stage.

"One of them is talking about 40 to 60 staff within six months, bringing people over from India and the US to do work here for their clients," O'Neill says.

US IT organizations are also said to be looking at moving in and consultancy firms here are putting together plans for their clients. Recruiter David Newick of Auckland-based IT Futures confirms that US firms are making enquiries about setting up divisions in New Zealand to do Web-based development work.

O'Neill says he has put eight to 10 other IT firms in touch with councils in Wellington and Christchurch in the past four to five months and notes that deputy prime minister Jim Anderton regularly welcomes IT firms at events in the capital.

ITANZ says it is also meeting Taiwanese business leaders, and creating business-to-business (B2B) links for New Zealand firms with that country. Next month ITANZ will launch a special B2B Web page for its Asia-Pacific sister organizations.

O'Neill says that although some Indian firms like VCS Systems may take Kiwi work back to India, it is a two-way street and not a threat. "The differential in doing business in India and Indian (pay) rates is not that great any more. This is why many companies are saying 'let's do business in New Zealand'," he says. Chandini Prasad of VCS Systems says its charge-out rate is around US$12 an hour.

The company began seeking work last month using, Bulletmail and to seek business here and in Australia. VCS is about to sign a partnership with an Australian firm and claim existing contracts including a major European and North American B2B exchange for the food industry - - which is in its final testing phase.

VCS Systems says there is no problem in doing work for New Zealand firms back in Bangalore, saying 500 major US firms already do it. "Projects are being done based on core competence. The US is good at making movies and so the best movies come from the US. Similarly Indian programmers and companies are known for their skills," Prasad says.

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