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Infy,UST and CTS bag $600 million Walmart deal

The global retail giant – Walmart has selected three IT vendors in India – Infosys Technologies, Cognizant Technology Solutions and UST Global for multi-year contracts worth over $600 million (around Rs 2,750 crore).

The amount is roughly equivalent to the value of goods – textiles, handicrafts and other products — that the world’s largest retailer sources from India every year.

This development is expected to boost the IT outsourcing landscape in India, given that Walmart typically prefers to develop its retail applications in-house. Walmart gradually started buying packaged retail applications from leading software vendors such as Oracle, HP and SAP only towards the end of 2007. It had, however, given Infosys and Cognizant pilot projects about five months ago.

Initially, the three vendors are expected to earn Rs 250 crore (Rs 2.5 billion) to Rs 300 crore (Rs 3 billion), each, annually. The figure is set to grow as Walmart increases outsourcing of work from its main merchandising division.

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

Asked about the deal, Infosys and Cognizant declined to comment. “As a policy, we do not comment on speculation in the marketplace,” spokespeople from both companies said. A UST Global spokesperson in India said the company does not comment on any client specific information as “we have non-disclosure agreements with most of our clients.”

UST Global is part of the $6 billion US-based business conglomerate Comcraft Group, with a major presence in Technopark, Kerala, India.

Walmart, the largest private employer and grocery retailer in the US with revenues of $404 billion (2009), selected the vendors after a competitive bidding process in which most Indian IT services companies participated, except TCS  India’s largest IT services firm.

TCS failed to qualify for the bid because it has an exclusive partnership with Target, another American retailer, who is into direct competition with Walmart. Among the bidding companies, Walmart shortlisted six contenders of which three were finalized based on their level of competency in various processes.

Unlike other retailers, Walmart does not want to open its own captive center in India, even though the company has established a huge sourcing office in Bangalore sometime back.

source: Business Standard, Rediff
       

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4 comments

  1. It’s absolutely fantastic to see our homegrown IT bellwether sharing a pie of the multi-year multi-million contract with the global retail giant!

    It’s really inspiring and encouraging.

    Way to go!

    Best,
    -Hari

  2. yes it can bring hundrads of new job openings in trivandrum. but ust is not responding to these media reports, and what i heard from my ust friends is, they also published a company wide news, that ust is not responding to any of such media reports.

    that may be because of the NDA which they signed with the clients.

  3. UST Global has not yet signed the contract till date with Walmart, so please don’t entertain anybody to join in the company. It’s big rumour across the globe.

  4. Hey TurthMaker, how come you know that UST Global dint yet signed the contract??