"The software market is booming at the moment. Several Sri Lankan companies are subcontracting or have formed joint ventures to develop software, while a few others are even trying to develop their own programmes," said divisional manager in software engineering at Informatics (Pvt) Ltd Austin Mascranghe.

The government has also thrown in its weight. It removed import duty on computers and software last year and offered tax incentives to foreign investors to set up software ventures in Sri Lanka.

"What we are trying to exploit is the demand for software personnel," said chairman of the Council for Information Technology VK Samaranayake (CINTEC).

He said Sri Lanka wanted to take a leaf out India's book, which has successfully marketed its software developers globally.

"India has been doing this for quite some time.We may not have as many numbers, but the basic education system is the same," he said in a recent interview. "I think India is now almost saturated. In quality I would say we are equal to India. The only thing we lack is the numbers," said Mascranghe.

Samaranayake, whose office is the main government agency responsible for recommending information technology policy, is targeting graduates who can be trained in universities and a few selected institutions.

"The need is not for those people who know the low level computer applications. The need is for software designers and those capable of handling other latest technologies," he said. "About 200 to 250 graduates pass out every year in computer related studies, but that number is not adequate because they are snapped up immediately," said Mascranghe.

"There are a few companies who also take a mercenary approach to staff, they wait for some company to train them and then grab them. But others are spending as much as Rs 1,50,000 ($2,300) a year on eachstaff member on in-house training," he added.

Some efforts to lure big software companies have already been successful.IFS and Britain's JBA are running software development operation in Sri Lanka, while US giant Microsoft Corp has set up an advanced technology lab. "Until fairly recently there wasn't much interest, which was disappointing because the more competition you have the more people there are in the market," said director of JBA Software Products.