At the bottom of the downturn, Network Appliance Inc. (Sunnyvale, Calif.) did what many Silicon Valley companies had been doing. The storage-networking company set up a new software design team and a slice of its technical support operations in Bangalore, India-and the experience generally has been a positive one.
During the downturn, business for NetApp's once fast-growing NetCache product fell flat, but the company still needed to gear up for next-generation versions of the network-attached storage system when staffing was flat. The job focused on software development for a self-contained kernel and a few modules of the company's storage code.
"It made a lot of sense to go offshore. We were really tight on engineering," said Chuck McManis, a technical director for the company.
Some engineers from India already on the NetCache team elected to relocate to Bangalore. Others found different jobs within the company in the states. No one was laid off, the company said.
Cost was the major reason for the move. "As a rule of thumb, engineering salaries in Bangalore are 30 to 50 percent of what they are in Sunnyvale, though for very senior people, it's closer to 60 to 70 percent," said Ken Hibbard, the vice president of storage protocols and solutions engineering for NetApp, which helped to set up the center.
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Hibbard calls move to India 'distributed development.'
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There was no significant backlash among engineers inside NetApp.
"We are not taking jobs out of the U.S. We are continuing to build the company, and this is another location," said Hibbard, who first investigated India about 15 months ago. "Most rational people understand the motivation. We want to do distributed development," he added.
Indeed, at the height of the boom, NetApp concluded it could not find all the engineers it needed at its Silicon Valley headquarters, and it established another technical center in Research Triangle Park, N.C., where companies such as Cisco Systems Inc. and IBM Corp. have a huge presence. NetApp now employs about 640 engineers in Sunnyvale, as many as 150 in North Carolina, about 60 in Bangalore, 50 in Pittsburgh and another 45 in Massachusetts.
The storage business has already started to inch upward. NetApp could hire as many as 120 engineers in the United States this year, including many in Silicon Valley. Meanwhile, the Bangalore facility will double its staff this year and reach 250 within two years, as it takes on additional work, such as collaborating with U.S. engineers on a new generation of storage-management software.
Not everything has been rosy with the new design center. Maintaining electricity 24/7 was a problem at first, and broadband access is still subpar. "From that perspective, there's a built-in barrier to growth," McManis said.
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