Next best to Bangalore =Kovai.

Bangalore is a great city but Bangalore has reached it's full capacity and companies are exploring other cities to setup R&D centers...One city that comes nearly close to Bangalore is Kovai.(full name Coimbatore)
http://www.coimbatoreit.com/quality_of_life/weekend_getaways.htm
http://www.coimbatore-corporation.com/

Why Coimbatore for Software R&D ?
[1] Good weather & water.
It is surrounded by mountains and sweet Siruvani water is something that Kovai people are proud of -
http://www.hindu.com/thehindu/mp/2004/04/26/stories/2004042601300100.htm

[2]Very good airport
http://azworldairports.com/airports/p1750cjb.htm

http://www.southbeach-usa.com/airport-rental-car/india/coimbatore.htm

[3] There are many world class engineering colleges that produces 1000's of engineering graduates,post graduates and Ph.D's every year.

1.PSG Tech:
http://www.psgtech.edu/

2.Coimbatore Institute of Technology

3.Govt. College of Technology:
http://www.gctcbe.com/

& many more colleges:

http://www.kct.ac.in/

http://www.kongu.ac.in/

http://www.amrita.edu/aitec/cbe/

http://www.karunya.edu/

http://www.srec.ac.in/

http://www.tnau.ac.in/

The list goes on & on.... These are some of the colleges that supplies brain power to Bangalore.

[4] Ooty
Ooty is close for vaccation...
http://www.ooty.com/

[5] There are already many software R& D companies out there...
http://www.coimbatoreit.com/companies/software_comp.htm

[6]For stay, many good hotels like this -
http://mall.coimbatore.com/residency/home.htm

So,why wait ?
Did I say the cost of living is "much" lower compared to Bangalore ?

Did I say the salary is also "much" lower compared to Bangalore ?

Did I say that "attrition rate" is much lower compared to Bangalore ?

There is even an incubation facility inside PSG College of Technology to get bootstrap your business,it's called PSG STEP(Science and Technology Entrepreneurial Park).
http://www.psgstep.com/

Coimbatore ALSO a wonderful place for Software R&D

-Uday.