Three Indian IT firms get $600 million Wal-Mart deal

The trend – Buffalo to Bangalore – continues. The foreign wind continues blowing toward Indian IT. Everyday there are new IT outsourcing from Western countries to India. But, this one is BIG:

The Business Standard reported on Friday that American Wal-Mart (Walmart) has selected three IT vendors in India to outsource its IT needs. The company has selected three prominent IT vendors from India — Infosys Technologies, Cognizant Technology Solutions and UST Global — for multi-year contracts worth over $600 million (around Rs 2,750 crore).

In the start, each firm is expected to earn Rs 250 crore to Rs 300 crore annually. The figure will likely grow as Wal-Mart increases outsourcing of work from its main merchandising division. Infosys and Cognizant are expected to get a larger share of the contract.

According to this new mega contract, Infosys and Cognizant will be responsible for application development and support, while UST Global will owe the testing of these applications.

“What is more important is that these three vendors have now got a ticket to be in the club of Wal-Mart’s list of preferred vendors which will help them in growing this account in the long run,” the paper quotes a source.

Wal-Mart is one of the world’s largest public corporations that runs a chain of large, discount department stores. It is the largest private employer and grocery retailer in the US with revenues of $404 billion in 2009. Wal-Mart selected these vendors after a competitive bidding process in which most Indian IT services companies participated.

Unlike many other retailers, Wal-Mart does not intend to open its own captive centre in India. However, the company has established a huge sourcing office in Bangalore.

Congratulations to India and its continued performance on the world stage of information technology.

Or, should we just say, ‘Chak De India‘ ! :)