When M Karunanidhi, the chief minister of Tamil Nadu, handed over the documents for land in Coimbatore to Tata Consultancy Services [Get Quote] and Wipro [Get Quote], and unveiled the model IT Park to be built in the city, a new chapter in the development of Tier-2 cities started in the state.

Accepting the documents, TCS CEO S Ramadorai said that a recent study by Indicus Analytics found Coimbatore to be the best city in South India for investment.

He added, "As a matter of fact, I was in Coimbatore recently, where I met with the student community, academia and businessmen. My experience was an eye opener. Engineering students quizzed me on financial markets while businessmen discussed with me at length on strategies of Google and IBM."

"There was a lot of energy and enthusiasm. The point I'm making is that there is a passionate, well informed and ambitious community of people. I saw a potential ecosystem in action," he added.

TCS has opened a software engineering lab in PSG College of Engineering in Coimbatore. TCS also has an Engineering Centre of Excellence especially for SMEs. By collaborating with small and medium enterprises, Ramadorai said, TCS would be unlocking the potential to bring their innovations to the world.

With five universities, 25 engineering colleges and 72 Arts ands Science colleges, annually, Coimbatore churns out 80,000 graduates. With the city well-connected by road, rail and air -- with Bangalore being 380 km away, Trichy (203 km), Kochi (185 km), Chennai (500 km) and to all major cities in India.

Excellent climate (quite unlike Chennai) and proximity to hill stations like Coonoor and Ooty are the added advantages Coimbatore has.

But it is Cognizant -- which started its operations in Coimbatore in August 2005 -- that has emerged as the fastest growing IT services company in Coimbatore. Cognizant has its development centre at the Software Technology Parks of India promoted IT Park at Kumaraguru College of Technology.

At the time of the inauguration, Cognizant planned to hire about 400 professionals during the first year of operations but within a year, it already has over 750 professionals working, 'outperforming its original target by a long chalk.'

In the 2005 recruitment season, Cognizant recruited over 10 percent of its annual fresher talent from in and around Coimbatore.

"Coimbatore is a strategic development centre for Cognizant, similar to the ones we have in Chennai, Kolkata, Pune, Bangalore, Hyderabad and Mumbai. Cognizant is committed to grow the centre, leveraging the rich talent pool of technical professionals in the region," said R Chandrasekaran, president and managing director, Cognizant.

"Coimbatore will soon emerge as a Tier-1 city for IT in one year," C Umashankar, managing director, Electronics Corporation of Tamil Nadu (ELCOT), predicted. "The demand for built up space is so high -- ten times higher -- in Coimbatore that we will have to direct companies to other Tier-2 cities.

Ashok Bakthavathsalam, managing director, KGISL (the other major IT company in Coimbatore), in his presentation, 'Coimbatore -- A model Tier-2 City,' said that low cost of living -- lower salaries, higher cost advantage are the major advantages Coimbatore offers.

He said, "KGISL has over the last decade successfully demonstrated a Tier II success story. We started our operation in 1994 on a 50-acre private technology park meeting world class standards when Coimbatore was not popular as an IT destination. We provided training and employment to over 3000, and also established an approved 150-acre SEZ for IT/ITES. We are responsible for generating 30% of IT exports from the region."

Other than Coimbatore, Tamil Nadu is trying to develop Tier-2 cities spreading across the entire state; from Chennai at the northern end to Tirunelvelli at the southern tip. Sekar Ponniah of Global Software Solutions (TVL) Pvt Ltd started a 100 % Export Oriented Unit located at Tirunelvelli in the year 2000.

He said he could do it because of the support from STPI which provided the required high bandwidth Connectivity.

Aditya Sapru, managing director (South Asia and Middle East), Frost and Sullivan, suggested in his talk on 'Tier-2 and Beyond' that two models could be considered for Tier-2 and Tier-3 cites:

Development of Tier-2 / Tier-3 cities as potential centres of excellence with an independent city/zone development approach with independent growth.

A cluster model, as an integrated approach to development of the state.

Some centres such as Coimbatore and Trichy may be considered as ideal candidates for centres of excellence, while others could be developed in a 'cluster format.' He said the state could also consider a Hosur / Coimbatore / Madurai corridor as launching pad.

He also suggested adoption of a hybrid model incorporating the essence of both models at all centres.

S Rajalakshmi, chief of Software Technology Parks of India (STPI), spoke about taking high speed data connectivity to Tier-2 and Tier-3 cities and developing IT parks in association with educational institutions. It encourages industry -- academia collaboration.

She gave the example of the highly successful STPI -- the IT park in the premises of Kumaraguru College, Coimbatore.

It is not only Coimbatore that is on the Tier-2 city map of Tamil Nadu, but also Trichy, Madurai, Salem, Hosur and Tirunelvelli.

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