India's HCL Technologies wins $70M outsourcing contract from Teradyne ReceivedSPF: None receiver=nym.alias.net clientip=194.109.206.210

Jul 14, 2006 India's HCL Technologies wins $70 Million outsourcing deal from Teradyne

India's HCL Technologies Ltd. said Thursday it has won a $70 million outsourcing deal from U.S. automated test equipment maker Teradyne Inc.

Under the 5-year deal, HCL Technologies will manage Boston-based Teradyne's information infrastructure and software application related jobs, said HCL President Vineet Nayar.

Companies in the United states and Europe are increasingly closing and shrinking their information technology departments to get these jobs done at a lower cost in countries like India -- a trend that is expected to drive the next boom in outsourcing. Currently, companies outsource mostly call center services and back-office work like accounting and billing.

"This is the fourth deal in which we are taking over the IT department of a company," Nayar said in a a telephone conference call with journalists.

Nayar didn't disclose how many people Teradyne employs in its information technology division, but said most would be taken on HCL's payroll.

Although Teradyne's minimum commitment is to pay $70 million to HCL Technologies for the work, Nayar said he expects the contract would eventually be scaled up to more than $125 million.

"Our engagement with Teradyne is going to be much larger" than what has been agreed under the deal right now, Nayar said.

He said HCL would be billing Teradyne for more than $25 million in the first year and expects to maintain that scale over the remaining years.