Twenty-five years ago, Porter and Engstrom were typical kids growing up in Oroville. They earned their first quarters washing neighbors’ vehicles. After working for Microsoft and then setting off on their own, Porter and Engstrom have created a company that blends a rural setting with a corporate atmosphere straight out of Silicon Valley.
New Oroville is the first business of its kind in India a 21st-century domed village built as a residential work center for Indian software developers and their families. It is a subsidiary of Catalytic Software. Porter, 36, is Catalytic’s CEO; Engstrom, 37, is chairman of the board.
While Catalytic is headquartered in Kirkland, WA, the company’s software development work done mostly for clients in the U.S. is performed 13 time zones away at New Oroville. Seen from an airplane, New Oroville glistens like an orchard of large snowballs sitting on parched fields broken by occasional dots of vegetation.
Started in January, the New Oroville campus has a dozen white-concrete domes, with more under construction. Most are residential dorms; three or four, however, will be used as programmer work areas. The nearest city, 12 miles north, is sprawling Hyderabad, population 4.5 million. New Oroville has 40 workers, about 24 of them native Indian programmers.
The dome design came from the need for energy-efficient structures in India’s sweltering climate. They’re also sturdy enough to withstand earthquakes. “I call it dome sweet dome,” said programmer Vishwanath Manchikalapati of his wood-floored residence. His dome also features a wood staircase, washer, dryer, television, microwave, and dishwasher an array of conveniences not found in most Indian households.
“It’s a large space for a bachelor like me.” Catalytic gives each worker a housing benefit covering portions of the rent. Each apartment-style residential dome can house up to six employees, with separate bedrooms and common areas much like a college dorm. Slightly larger domes are under construction for workers who want to raise families.
Besides the creature comforts inside the domes, workers are attracted to New Oroville by its remoteness, its serenity and its American lifestyle. India produces large numbers of highly skilled, English-speaking software programmers. Their talent and affordable salaries have led Microsoft, Intel, and other companies to build development centers in India’s largest cities.
But commuting and working in Hyderabad or Bangalore is frenetic, stressful, and costly. Given a chance to work and live at New Oroville, programmers in India have bombarded Catalytic with resumes. Rajesh Kalidindi, a 25-year-old Indian programmer, decided to move back to India last year after working for several U.S. tech firms.
Moving home presented some major challenges, until he opted for New Oroville. “I was really attracted to the facilities they added here,” he said in an e-mail message. Catalytic has constructed a swimming pool, cricket field, a jogging path and tennis courts. A nine-hole golf course has just been finished. New Oroville is evolving into an American-Indian community in a pasture where water buffalo still roam nearby kept at bay by a sturdy wire fence. “I thought I would miss the U.S. living conditions, but New Oroville made my dreams come true,” wrote Kalidindi. “Now I am in India with a U.S. lifestyle.”
Porter, who’s taken up residence in New Oroville, said the campus may eventually add an enclosed ice rink, an unusual worker perk in an area where temperatures often hover in the 90s for days. The self-contained community expects to add several retail outlets and a movie theater at some point. “The big thing is, if we make it more fun to be there than in town, then we won’t have to worry about our workers wishing they were somewhere else,” Porter said.
It’s too early to predict how successful New Oroville will be, Porter said. The firm is taking advantage of the growing trend by American and European companies to turn to offshore developers to handle software development projects. Catalytic has just started landing contracts. New Oroville’s programmers are building Web programs or developing applications for American companies needing to upgrade Web sites or develop e-commerce tools. It’s all about saving money.
One industry report said overseas software development saves a company 15 percent to 25 percent of what it costs to hire American programmers for the same job. Porter and Engstrom won’t say what they pay New Oroville workers. They’re paying salaries equal to what Indian companies pay highly skilled software programmers in the $12,000-$16,000 per year range.
If contracts keep coming in, Porter sees New Oroville expanding to 500 acres and about 1,000 workers—two-thirds of the population of his hometown, where he and Engstrom met in grade school. When they named the campus New Oroville, they had to explain to Indian programmers the reference to their hometown. “We wanted a reminder of the small-town values we grew up with,” Porter said. “We really enjoyed living there, and benefited from the values of hard work and strong sense of loyalty.”
Engstrom was a successful Microsoft executive who left Redmond, WA three years ago. Porter also worked for four years at Microsoft, and left shortly after Engstrom did. Both men also briefly attended Washington State University, but neither graduated. Engstrom, in fact, never earned a college degree. Porter earned a biology degree in Oregon and later an MBA from an Alabama university.
Two years ago they hatched the idea of forming Catalytic. Their idea was to turn out “programming just in time” rapidly finished software projects for companies turning out new Web-based services. Engstrom, who at Microsoft was part of a group of managers known as the “Beastie Boys” invested a million dollars in the start-up.
They turned to India as a logical location, but were initially looking at renting space in one of the main cities. “It proved easier building our own township after we realized the complexity and inadequacy of the existing infrastructure,” said Engstrom, who lives in Kirkland. From Day 1, they tried to build an American company based in India using the same management tools and strategies used by firms like Oracle or Microsoft. That American emphasis also appeals to India’s workers.
“Catalytic is the only company I came across with a strong management team and with experienced professionals from Microsoft,” said Srinivas Chilukuri, one of the first programmers hired at New Oroville. Some things are clearly different, however. Many of the workers play cricket, often traveling to compete against other tech firms based in nearby Hyderabad.
But the workers always come back to New Oroville relieved to resume an Eastern Washington pace. Said Kalidindi, the worker who moved back to India: “I will never forget in my life the first day I stayed in the dome. I woke up that morning to a breath of fresh air and birds calling. “It made me refreshed. I never had such a morning in Hyderabad.”