The Hindu Business Line : HCL, Teradyne of US in $70-m outsourcing deal

Multi-service platform
The deal includes operations such as IT consulting, application development and IT infrastructure management involving data centre, network, security and help desk services.
The total value could go up to $125 million over the five-year period.

New Delhi , July 13

Global IT services company HCL Technologies has entered into a five-year, $70 million multi-service outsourcing deal with Teradyne, a US-based supplier of automatic test equipment.

The deal will see HCL taking over the entire IT operations of the $1-billion company, including IT consulting, application development and IT infrastructure management involving data centre, network, security and help desk services. HCL will absorb Teradyne's existing IT staff.

Mr Vineet Nayyar, President, HCL Technologies told Business Line, "This is part of HCL's strategy to be different by offering a multi-service platform. Globally, there is $90-billion worth of outsourcing agreements up for review and we are going after that."

This is the fourth outsourcing deal that HCL is bagging this year, taking the total value to over $1 billion. The Teradyne deal will get HCL revenues worth $25 million in the first year itself. Mr Nayyar said that the total value could go up to $125 million over the five-year period.

Basis for selection

Mr Chuck Ciali, CIO, Teradyne, said, "We selected HCL on the basis of its breadth of experience with global customers in the hi-tech manufacturing industry, its partnership approach and the transparency in its engagement models. This partnership will enhance Teradyne's capabilities in global sourcing, enable reduction in costs and improve our agility as we enhance our position as a global leader in automatic test equipment."

Teradyne is a supplier of automatic test equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defence industries. In 2005, Teradyne had sales of $1.08 billion, and now employs about 4,000 people worldwide.

Commenting on HCL's new approach, Mr Sandeep Kishore, Vice-President, Hi-Tech and Semiconductor Practice, HCL, said, "We have a unique approach to service delivery that offers our customers enhanced value in the short terms as well as over the life of the relationship. Teradyne will benefit from HCL's first full service outsourcing partnership and other service innovations to ensure successful transformation of its IT portfolio."