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Sony outsources IT development to India

A boost for India's offshore-development industry, move is intended to help Sony's European wing focus on core activities.

Sony Europe is outsourcing several of its core IT development functions to India-based Satyam Computer Services.

Satyam announced on Wednesday that SAP application development, enterprise application integration and testing services for the European wing of the Japanese electronics giant will be carried out at the Indian outsourcer's new offshore-development center (ODC) in Bangalore.

According to Satyam, the move will "enable the Sony Infrastructure Services team to focus on core activities such as platform enhancement, optimization and innovation" while Satyam handles IT development for Sony sales and distribution, warehouse management, finance and business intelligence systems.

Satyam's European vice president, Som Sarma, said on Thursday that the company had been "setting up development centers for companies of Sony's stature for several years," citing as an example a deal struck seven years ago with General Electric.

Sarma called the Sony deal a "milestone" for ODCs. "The fact that Sony has decided to go ahead with an investment inside Satyam shows the maturity of offering such a service at such a high level," he said. He added that the center was expected to employ between 55 and 80 staff by the end of the financial year.

"The larger the ODC gets, the more (cost) benefits the company gets from a risk management on the people perspective," Sarma said, adding that a growing ODC operation would mean that Sony "would not feel the pinch" if a staff member leaves.

Sony has had a poor year financially, largely caused by the delayed release of the PlayStation 3 console and the hugely expensive recall of millions of computer batteries after some caught fire.

A Sony representative told ZDNet UK on Friday that the Satyam deal is "not something that Sony wants to comment on."

David Meyer of ZDNet UK reported from London.