By Worldroom.com

o most people, Bali conjures up images of endless beaches, artist colonies and mystical Hinduism. Indonesian IT magnate Otto Sugiri hopes the tropical island paradise soon will also be synonymous with programming codes and killer apps.

Amid terraced rice paddies on a Balinese mountainside, Sugiri has created a software development center in the spirit of an artist colony. Dubbed BaliCamp, it's a unique combination of East and West, of ancient traditions and modern ways of life.

BaliCamp is also Indonesia's boldest bid to join the new economy by carving off a piece of the US$32.6 billion global software outsourcing pie. Most of that work currently goes to India, the Philippines and Malaysia - all of which offer well-educated, English-speaking programmers for a fraction of the cost in the West.

How can Indonesia compete? The short answer, Sugiri believes, is location. He envisions BaliCamp becoming a magnet for the best programmers from Indonesia's technical universities in Java as well as stressed out Silicon Valley veterans looking for a more laid-back work environment.

"Creativity is the essence of software development," says Sugiri, chairman of the BaliCamp's owner, Sigma Citra Harmoni. "Our developers need a work environment that can stimulate their creativity."

The environment created at BaliCamp blends high technology with the natural beauty and culture of Bali - a tourist destination marketed around the world as the "Island of the Gods." It's located in the central part of the island within a two-hour drive of the best surfing, whitewater rafting, Balinese temples and an international airport with direct links to many cities in Asia and Australia.

"From our base on the island of Bali - a world renowned center of creativity and communal spirit - we have built what may well be the ultimate environment for nurturing innovation." -- BaliCamp statement

Programming in Paradise

From the outside, the software center looks more like one of the five-star resorts that dot the island. Pyramidal thatched-roof bungalows, arrayed around a central work-and-meeting complex, look out across rice fields ploughed by farmers with water buffaloes. It has a swimming pool, koi ponds and all the features and conveniences of a luxury hotel -- but the setting has a subtlety and single-minded dedication of a monastery.

Inside the bungalows are banks of computers with a satellite uplink to Hawaii, giving even the most demanding developers sufficient speed and capacity to work. The US$40,000-a-year connection also ensures there are no bottlenecks in data transmission and enables 24-hour production schedules.

The idea for BaliCamp was born during Indonesia's political upheaval of 1998 when Sugiri's software firm, Sigma Citra Harmoni, was losing programmers in droves to more stable countries such as Singapore.

To halt the brain drain, Sugiri and the Sigma Group decided to set up a retreat where programmers could work in an atmosphere of innovation, free from the fear and distractions of riots and religious strife. Bali seemed a natural choice since it remained remarkably peaceful even as Jakarta and islands such as Aceh spiraled into chaos.

Unlike many other Internet-related start-up companies, BaliCamp has been financed to date entirely by Sigma, - an illustration of the company's commitment to the project. It cost US$3 million to build, and by the time the camp was officially launched last October it had already generated US$2 million in revenue.

Homegrown Handicaps

BaliCamp could pay long-term dividends for Sigma, a US$21 million-a-year group of Indonesia- and Canada-based companies involved in Web sites, corporate networking and software development.

But even supporters of the project acknowledge that building a competitive "software boutique" in the lush jungles of Bali will require overcoming some significant handicaps.

Computers and Internet access are considered luxuries for most of Indonesia's 220 million people. Their command of English - the language of the Internet - generally lags behind both India and the Philippines. The dropout rate for poor teenagers has doubled to about 25% since the 1997 Asian economic meltdown. And those who stay in school don't receive any computer education until high school - if at all.

Still, despite some recent difficulty in finding qualified programmers, BaliCamp shows promise. More than 80 programmers are working on projects for Sigma's big-name suppliers: Microsoft, Oracle, Cisco and International Business Machines.

Richard Kartawijaya, general manager of Microsoft Indonesia, says BaliCamp has been hired by Microsoft to develop an Indonesian-language spell-checker for use in its operating system.

In 2001, Balicamp expects revenue will total US$10 million. Sigma executives are planning a series of roadshows in Europe and the U.S. to drum interest in BaliCamp's services.

And as business expands, the number of employees at BaliCamp is expected to balloon this year to between 400 and 500 - a third of them programmers. Sugiri is betting the unique combination of high-tech facilities and the stunning natural setting will lure them to the "Island of the Gods."