“Bangalore is an IT haven, and yes, certainly the costs are low,” he explains. “But what makes it attractive is the availability of good local talent.” Not to mention the great weather. So Mr. Shah moved the R&D department of iCode Software, which he co-founded, from Dulles, Virginia, to Bangalore in 1997.

Today he’s steering Skelta Software. It’s the first wholly Indian enterprise for Mr. Shah, who grew up in the western Indian city of Baroda and studied at the famed Indian Institute of Technology in Mumbai, and it may be his biggest project yet.

Skelta specializes in enterprise-wide business process management (BPM), which combines automated processes like workflow systems, XML Business Process languages, and packaged enterprise resource planning (ERP) systems. Skelta targets small and medium-sized companies, a base Mr. Shah believes will get his company a niche market over the next few years. “We are much better suited toward the needs of the small companies than most of the other players are,” he says. “We can implement our software within two to three weeks. A company like SAP will take months, and that is just not feasible.”

With the BPM space expected to grow to as much as $6.5 billion over the next few years, Mr. Shah’s company has room to grow. “We are not SAP or Baan,” he says. “Our target is to have 3,000 customers over the next few years in the small and medium-sized space, and that is a sizeable number.”   

Mr. Shah knows IT innovation. Over the last 17 years, he’s gone from the PC hardware manufacturing business, where he founded white box computer retailer Accel, to the less predictable ERP space in 1994, building software to help businesses coordinate and manage their various components. At iCode he helped develop ERP solutions for small and medium-sized businesses. He also served as the company’s managing director in charge of India operations, and head of the Bangalore-based R&D unit. One major milestone: Everest, iCode’s business management software. The prototype had been developed at Accel as the Automator.

“We had to build the Automator ourselves, because there was no off-the-shelf software available,” says Mr. Shah. “It was perfect for keeping our costs low, and our margins high.” Seeing the interest in the software among other computer manufacturers, Mr. Shah decided to develop it again from the ground up to expand its scope for other industries. And thus Everest was born.              

Soon after, Mr. Shah decided to move on. “The company was obviously growing bigger,” he said. “It was drawing $10 million in annual revenue and I decided it was time to appoint a professional CEO and hand over the reins to him.” After the Shahs’ return to India, his wife Kalpa, a former AOL employee and entrepreneur in her own right after setting up a chain of video stores in the U.S., started Skelta.

Mr. Shah introduced BPM software products into the company’s portfolio in 2004; in February 2005, it signed its 100th customer. He is CEO and a 50 percent shareholder in the company, and hopes to find additional funding in the second half of the year. Skelta’s revenues are split 30/70 between professional services, its original business, and product licenses, and the company already counts Motorola, Siemens, and i-flex as customers.

The Bangalore move, it seems, was a good one.

Kiran Mazumdar-Shaw has every reason to feel smug. Sitting in her large office in Hosur, just outside of Bangalore, India’s biotech superwoman recounts just how difficult it was to catch the attention of investors in the early days of Biocon, which she co-founded in 1978.

“They had no idea about the business model of a biotech company,” says the imposing yet affable Ms. Mazumdar-Shaw, the company’s chairman and managing director. “The investors were trying to treat Biocon like an IT company. The two are nothing like each other.”

The company’s March 2004 IPO was oversubscribed nearly 33 times; Biocon shares began trading at Rs. 635 (about $14.50), more than double the initial offering price of between Rs. 275 (about $6.30) and Rs. 315 (about $7.20). Investors, realizing they had missed the bus, scrambled madly to buy shares of the company, a fact that amuses her to no end.

“They have a herd mentality,” she says. “Investors see something that’s successful, and immediately want to throw everything behind it. They can’t really appreciate the kind of work that’s gone into this.”       

Ms. Mazumdar-Shaw co-founded Biocon in 1978 with Irish chemical company Biocon Biochemicals, which owned 30 percent. The company started out producing enzymes for industrial use, but later turned to biotechnology to take advantage of a young field with few players. Under the direction of Ms. Mazumdar-Shaw, it has now evolved into a biopharmaceutical giant, focusing on health care and doing cutting-edge research in oncology, cardiology, and other therapeutic segments.

Biocon’s brand of insulin competes directly in the world market with big pharmas like Eli Lilly and Novo Nordisk. In the last fiscal year ending March 2004, the company’s total income increased 94 percent to Rs. 5,493 million (about $125 million). The profit more than tripled from Rs. 358 million (about $8.1 million) in 2003 to Rs. 1246 million (about $28.5 million) in 2004.

Thanks to the success of Biocon, Ms. Mazumdar-Shaw is possibly India’s richest woman; her 40 percent stake in Biocon’s $1.2-billion net worth puts her at about $480 million.

But it wasn’t easy getting to this point. She struggled with the difficulties of being a woman in a predominantly male industry, and because biotech was still under the radar in India, raising money was tough. But she hung on, and by the late 1980s, Biocon had turned a profit. The Irish company sold its stake to Unilever, who in turned sold it to England’s Imperial Chemical Industries. Ms. Mazumdar-Shaw persuaded her husband, John Shaw, to buy out ICI’s share. He now serves as Biocon’s vice chairman in charge of international business development, and owns 25 percent of the company.

Having engineered the success of Biocon, Ms. Mazumdar-Shaw now wants to raise the bar for the industry in general. She is chairman of the Vision Group on Biotechnology, an organization set up by the state of Karnataka to advise and direct the government in formulating policies, initiatives, and business incentives for the biotech sector.

She was also instrumental in setting up the Institute of Bioinformatics and Applied Biotechnology (IBAB) in Bangalore, which educates young people in the practical aspects of working in the biotech industry. “Until academic institutions start doing serious work in biotechnology, the private sector will have to fill in,” she says.

With foreign companies now looking to India to perform clinical trials and other research needs, Ms. Mazumdar-Shaw knows the industry has plenty of room to grow. “The industry is now worth $1 billion, and by 2010 it will be worth $5 billion,” she says. She also sees the Indian biotech industry growing from 25,000 employees to a million by that time.

What concerns her, however, is the lack of funding for small biotech startups in the country. Ms. Mazumdar-Shaw says that some very good Indian companies don’t receive enough funding because investors don’t consider them “sexy” enough. Those that do often can’t operate freely because investors make unreasonable demands on them.

“Smaller companies can’t really stand up to investors,” she says. But with the size and stature of Biocon, she can now dictate her own terms. “Whenever investors in the industry try to offer me advice, I tell them, ‘you missed the boat once, and you’ll miss it again.’” Hopefully this time they’re listening.

In Indian mythology, the bird Jataayu is most famously portrayed in the Hindu epic Ramayana.Jataayu tries to stop the evil king Ravana from abducting the hero’s wife, but the old and frail bird is no match for Ravana. Jataayu valiantly fights on nonetheless, and in the process earns himself a place in the hearts of readers of Indian folklore for generations.

Jataayu Software, headquartered in Jakkur, a sleepy suburb north of Bangalore, is also preparing for a lopsided matchup. It provides products and applications for mobile carriers looking to upgrade customers to pricier services like multimedia messaging service (MMS), short messaging service (SMS), and instant messaging. With global giants like Nokia, Ericsson, and Huawei also looking for a share, Jataayu will have its own battle to fight.

At the helm of Jataayu’s strategy is Mahesh Kumar Jain, founder and managing director. Soft-spoken yet assertive, Mr. Jain understands the challenges that lie ahead in his company’s attempt to carve out a niche in the worldwide mobile Internet space. “When we started this company, we knew it would have to be globally focused,” he says. “We are a small company from Bangalore, but we can still provide the disruptive technology to make an impact.”

When Jataayu was launched, with funding from Tata Consultancy Services, it became what it calls the first company in India to develop a wireless access protocol (WAP) gateway, which two GSM operators in Mumbai subsequently deployed. Today, Jataayu’s products are used by Reliance, TTSL, Hutch, and BSNL, four of the five largest carriers in India. On the handset side, Motorola and Samsung, two of the world’s three largest phone makers, use the company’s products. Jataayu also has arrangements with global carriers like Orange and Vodafone, and provides enterprise solutions to global companies like FedEx and Standard Chartered Bank. Not bad for a company that has 260 employees, and until the last decade saw itself as an India-only player.

Still, the hurdles are many. First, there is the problem of funding: Jataayu has so far raised $2 million, a puny sum compared to its competitors’ deep pockets. “We are a profitable company now,” says Mr. Jain. “But it still doesn’t make sense in growing the way we are—$5 million in revenue in one year, $7 million in the next year and maybe $10 million the year after that. We need to grow faster than that, and for that we need capital.” Jataayu will be seeking further funding this year. Limited capital also limits its access to top talent, and indicates uncertainty in India’s domestic market for mobile Internet.

Mr. Jain is steeling his nerves for big battles ahead. What will separate Jataayu from his competitors, he says, is the ability to provide better products. “We can’t give up unless we know we have done our best,” he says. “Persistence is the key to success.” In the Ramayana, the bird Jataayu fought the courageous fight, but in the end was overpowered and defeated by a far stronger opponent. Mr. Jain, however, believes that today’s Indian companies can write a different ending.

In 1995, Mr. Ayaz left his job with telecom equipment maker Nortel in the United States to found Openera Technologies (formerly IndTeleSoft), which pitches what it says is the only working mobile IP multimedia system (IMS) client in the industry. Openera’s client framework enables the delivery of multimedia IP communications for handset manufacturers like NEC, service providers like VodafoneJapan, and server vendors like Nortel.

“You don’t achieve anything by trying to do what others are presently doing,” says Mr. Ayaz. “You need to anticipate what the market will need and come up with solutions for that.” Openera’s edge is a platform to develop mobile communications applications, as well as the applications themselves. The company provides both, including features like Active Phone Book, which lets users see who’s available and who’s not, a two-way communication service that works much like a walkie talkie, and instant messaging. Trials have started in Asia and Europe; Mr. Ayaz expects a big uptick in demand over the next couple of years.

With 2.5G and 3G networks rolling out around the world, the market can’t get enough cutting-edge applications. “Mobile operators are looking to next-generation networks to provide value-added services,” says Mr. Ayaz. “We help them do that.”

Openera took a long and winding road to its current business. In 1998, it started dabbling in the then-unheard-of voice-over-IP (VoIP) technology. And in 2000, years before its IMS technology, the company pioneered the development of a carrier-grade “soft switch” technology for separating network hardware and software on wireless phones, and spun it off as U.S.-based product subsidiary Xybridge Technologies in Richardson, Texas. As CEO of Xybridge, Mr. Ayaz raised $19 million in venture funding. The company broke even in 2000 with $20 million in revenue.

Openera then sold Xybridge to Oakland, California-based Zhone Technologies in February 2001, leaving itwith no intellectual property. So Mr. Ayaz and his team embarked on a foray into the mobile IMS client area to provide a delivery platform for advanced, peer-to-peer/server-based multimedia 3G services. This was again a sector that had seen little or no interest, but one that caught Mr. Ayaz’ fancy. “There seemed to be so much work being done on the IMS server side,” he says. “Sooner or later, it would require applications.”

Two more years of self-funded uncertainty followed, as investors stayed away. “When you take risks like this, one of two things could happen to you,” he says. “You could either make it big or be left in the wilderness.” For now, Mr. Ayaz seems to be on his way to making it big. He estimates that Openera is more than a year ahead of the competition. The company just closed deals with Vodafone in Japan and handset manufacturer NEC.

Mr. Ayaz sees mobile applications being increasingly controlled by the operators, and thus believes in the importance of having open standards for the platforms. He knows the company has to expand its product range and get global sales, but admits that it would need outside funding to do so. Openera will seek investors this year.

The company became profitable last year after a gap of two years, says Mr. Ayaz. As for other technology bets he has up his sleeve, he won’t say. “Most other things happen incrementally, but the mobile IMS client was a discontinuity that we saw coming,” he says.

Mr. Ayaz is game for more risks, however. “You’re sure to have misgivings, but you need to know in your gut that the plan you have is going to work,” he says. “I’ve already been through it twice, maybe the third time will be easier.”

It could be a carryover from his side job, teaching “Entrepreneurship and National Pride” at the Indian Institute of Information Technology in Bangalore. “India as a country is now a major player in all aspects of the IT business, but it’s time we developed our own intellectual capital,” says Mr. Rajam. “Entrepreneurs should want to create brand-new products out of pride for their country, because that is what we need right now.”

National pride is behind Ittiam, a global company in the digital signal processing (DSP) market, which creates intellectual property for a number of different media and communications convergence applications. Ittiam’s technology is used to create products in digital media (for example, portable media players), wireless local area networks (WLAN), and IP telephony.

Last November the company was named the world’s most preferred supplier of DSP-based intellectual property, in both the software and hardware categories, in the DSP Professionals Survey 2004 by Forward Concepts, a market research firm located in Tempe, Arizona.

Ittiam was founded by six Texas Instruments alumni—four from the U.S., one from Europe, and Mr. Rajam, who was the managing director of TI in India. All are driven to give back to India what they have received from it, in education and other opportunities. “The aim was to build a world-class company from India,” says Mr. Rajam.

“For too long we have provided the services,” he says. “We decided we wanted to develop some intellectual property of our own.” The company, which was started in 2001 and named after an abbreviation of French mathematician Rene Descartes’ famous saying, “I think, therefore I am,” turned profitable last year, with $4.8 million in revenue. Ittiam sees itself growing into a $100-million enterprise over the next few years.

For Mr. Rajam and his colleagues, who all have significant DSP experience, getting started was not the issue; staying committed was. The first round of financing, $5 million from Global Technology Ventures in Bangalore, pushed Ittiam forward. Then came the tech bust and 9/11, which left Ittiam’s founders facing an uncertain future.

“I think one of the reasons we got into this was the challenge of starting a company and taking it to the top,” says Mr. Rajam. “Sticking around at a large company like Texas Instruments would have been easy. We were actually wishing for a more difficult challenge.” Since it was a company creating intellectual property, as opposed to company services, Ittiam had the luxury of breathing room. It was not expected to show results immediately. In the aftermath of the stock market crash, the company also was able to attract some top talent from the U.S. and abroad.

In December, Ittiam collected $6.5 million in its second round of financing, this time from Banc of America Equity Partners. That total took it to $11.5 million in a space where companies generally grow to between $50 million and $100 million. But dominating the DSP intellectual property market is not the ultimate goal for Mr. Rajam and Ittiam; the plan is to move into the DSP end-user space by manufacturing its own products like media players and mobile phones. Video also excites Mr. Rajam. “Voice and data are things of the past,” he says. “The so-called ‘killer app’ is video, because that is what the consumer wants. And we want to be prepared for that.” Ittiam is planning an IPO for 2008.

Mr. Rajam is, however, extremely satisfied that his company is accomplishing all of this from India, and he wants other entrepreneurs to follow Ittiam’s lead. “Things are much different now than they were 10 years ago,” he says. “Entrepreneurs today have lots of experience, a decent amount of savings, and a great deal of talent at their disposal. Even the international VCs are showing interest.” If Mr. Rajam is successful as a recruiter, he could help India fulfill its massive intellectual potential.

So it should be no surprise that the meeting of smut and the web was a deeply disruptive event: the message had finally found its medium. Online porn made stars of young entrepreneurs like Seth Warshavsky, and ruined dead-tree old-timers like Penthouse publisher Bob Guccionne.

So why is mobile porn, which puts immediate gratification, literally, in the palm of your hand, such a business failure in much of the world? The problem, it seems, isn’t a lack of eyeballs. Adult content already accounts for half of all data traffic on U.S. wireless carriers outside their own portals.

The trick is getting paid—and oddly enough, that’s where the cultural problems begin. Luc Prieur, the owner of Phonebox Entertainment, which runs wireless porn site PhoneErotica.com as well as a niche gay site called BoogieBoys.com, claims he has not made a cent in the U.S. despite his site’s popularity. U.S. carriers are happy to charge for the airtime, he says, but not for premium content on adult sites. In this way, they are much like carriers in Islamic countries.

In the U.S., mobile carriers don’t want their brands associated with graphic sex. As a result, while mobile porn is a billion-dollar-a-year business, thanks to markets like Europe where mores are more liberal, it has stagnated in the U.S., which has made whole industries out of porn geared toward the Internet and video. Adi McAbian, CEO of Waat Media Wireless Entertainment, which provides content from such brand names as Playgirl and Vivid Video, claims his company’s products are available in 17 markets through 30 carriers. Not in the U.S., though. “In England, a topless woman on Page 3 would be acceptable” he says. “But to many people here, Maxim or Victoria’s Secret may constitute adult content.”

Standards must be introduced that will allow carriers to keep mobile porn away from kiddies. That’s coming, slowly. The Cellular Telecommunications & Internet Association (CTIA) has set up an action team to address the issue of mobile downloads. It met for the first time last January to thrash out guidelines for mobile carriers with respect to the delivery of content—such as a rating system that can identify smut.

The United Kingdom was the first country to develop a self-regulatory code of conduct for mobile operators offering adult content, a category that includes porn, gambling, and violent games. The code, which went into effect late last year, calls for an independent body to determine whether content is unsuitable for mobile customers under age 18. Any content restricted to those over 18 is not supposed to be made available until operators verify a customer’s age.

Once the smut can be kept away from kids, though, content providers will need a way to get paid. Phonebox’ Mr. Prieur says users prefer carrier billing to credit card billing. Only 5 percent of users are willing to use their credit card, he says, while 30 percent would rather put their charge on their phone bill. For carrier billing to come about, though, carriers need to become comfortable with the concept of adult content, which may never happen in conservative societies.

The solution could be some sort of hybrid. On July 2, Vodafone announced the launch of Content Control, a barring and filtering mechanism which will prevent underage customers from accessing adult content. The system would automatically enroll new customers in the program, which will block them from accessing 18-plus-rated content until they register via the web, wireless device, or in person. This is a great example for other carriers, getting people to “opt in” to age-restricted content, as opposed to providing them that content and letting them “opt out” when they do not want it, says the Yankee Group’s Mr. Zawel.

Once such solutions are in place, mobile porn will get a start on fulfilling the promise of an earlier generation of online smut.Mr. McAbian says that with Fortune 500 companies like DirecTV, Hilton, and Time Warner offering mainstream respectability to pornography, operators won’t stay away from the business for much longer. As a result, the mobile adult content market in the U.S. should grow to $100 million in 2008, says the Yankee Group. “Mobile carriers can’t keep their heads in the sand forever,” says Mr. Zawel. Don’t count on U.S. carriers to pass up a cheap-and-easy boost to profits from mobile porn for much longer.

On December 28, Think Secret, under the headline “Apple to drop sub-$500 Mac bomb at expo,” claimed that the company was about to release “a bare-bones, G4-based iMac without a display” at the January 10-14 Macworld Expo in San Francisco. The unit would retail for $499. The post cited “highly reliable sources.”

This was not the first time Think Secret had broken the news of a new product. In October, it had preempted Apple’s release of its color iPod, and on December 20, it was one of three web sites the Santa Clara court allowed Apple to serve subpoenas to in relation to leaking news of a new audio hardware product titled Asteroid. PowerPage.com and Appleinsider.com were the other two. Apple has also sued two men for distributing prerelease versions of Tiger, the most recent Macintosh operating system.  

The owner of Think Secret, who operates out of northern Washington and goes by the nom de plume Nick dePlume, said he is “confident that Think Secret’s reporting is consistent with the rights protected by the First Amendment,” but declined further comment. “[Apple’s] actions appear to be a desperate attempt to control the marketplace and silence journalists,” said Kasper Jade, editor-in-chief of AppleInsider.com. Gene Munster, analyst with equity research firm Piper Jaffray in Minneapolis, said the lawsuit was a reaction from Apple as part of its obsessive quest for secrecy. “Apple strategy is not to reveal upcoming products too early,” he said. “They would take the attention away from the existing products.”

Mr. Munster said that of all the Mac rumor sites on the Internet, Think Secret was one of the most credible, and with the lawsuit, the site had been vindicated. “If Apple took the time and the effort to sue it, I suppose it must be true,” he said. He also said that it was likely the leaks were coming from the suppliers of Apple’s products and not its employees. “I think Steve Jobs has put the fear of God in his employees,” he said.    

In a prepared statement, Apple said it believed the site had stolen “Apple’s trade secrets” about unreleased company products from “individuals who violated their confidentiality agreements with Apple by providing details that were later posted on the Internet.” The company declined further comment.

For consumers, the service, called Pantheon, could mean the end of worries about daytime minutes or exceeding their quota. But Parthenon has riled incumbent mobile carriers, who view the technology as an abuse of their network.

To use the Pantheon service, customers must purchase a second, Bluetooth-enabled cell phone from their existing mobile carrier, to keep at home along with a “box” purchased from Xcelis. Using their free mobile-to-mobile minutes, subscribers call the second phone from their primary phone for free, and the Pantheon box routes the call to the customer’s landline or VoIP service. The caller will get a dial tone, and then can place a domestic call to anyone for free.

Because the service depends entirely on the customer’s wireless carrier for the first leg of the call, some providers are crying foul. A spokesperson for T-Mobile USA denied any relationship with Xcelis and added that the company was continuously monitoring its network “for abuse.” Executives at Cingular and Sprint could not be reached for comment, but are understood to be watching the developments closely.

Analysts believe that the Pantheon service could be a fairly disruptive technology, if it finds enough takers. “The big question really is this: ‘Is there a huge clamor for this just yet?’” said Michael Grossi, vice president of technology research firm Adventis in Boston. “I can see the 18- to 24-year-old set getting into it.”

Xcelis CEO Glen Alexis claimed that thousands of people had signed up for the beta version of the product, which was launched the second week of November. The actual product, which comes in two versions, one for customers with landlines and another for VoIP users, will be released in early February. Currently, the service is available to Cingular/AT&T Wireless and T-Mobile customers with free mobile-to-mobile calling. Mr. Alexis hopes to expand Pantheon to Sprint customers in the near future.

While Mr. Alexis has tried to get wireless carriers on board with the promise of boosting subscriber numbers, carriers have yet to show any signs of biting. That hasn’t deterred him from going ahead with the launch of the product. “We want to be their friends,” said Mr. Alexis.

Forrester Research analyst Charles Golvin is skeptical about how far Xcelis will get with its business model, given that wireless providers are bound to get wise to the company’s plan. “For a while, there’ll be a game of catch-me-if-you-can,” he said. “But the carriers will shut it down. I can’t imagine this business plan being successful.”

Mr. Grossi of Adventis said that the primary difficulty would be in uniting two modes of telecommunication that are not entirely reliable by themselves. “The user will be calling on the cell phone, and then that call will be routed over a VoIP network,” he said. “That’s like calling between two different helicopters.”

He added that at best it could turn out to be little more than a telecommunications experiment. “It’s quite an interesting proof of concept, that’s for sure,” said Mr. Grossi. “I think even the carriers are looking to see what’ll happen to this.”