December 8, 2006 6:30 AM PST

Sony outsources IT development to India

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.

See more CNET content tagged:
Satyam, India, Sony Corp., information technology, development

23 comments

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

Should be:

"A boost for India's offshore-development industry, move is intended to help Sony's European wing cut staff"
Posted by Dachi (797 comments )
Reply Link Flag
Nail + Head
I think you hit the nail right on the head.
Posted by whargoul (52 comments )
Link Flag
Yet another bonehead move by Sony...
There aren't too many success stories in the offshore-to-India bucket...
Posted by paulreid99 (74 comments )
Reply Link Flag
very funny
check ciol.com and all you will see is "success stories" of offshoring to India
Posted by nonicks (89 comments )
Link Flag
Oh really?
And on what basis was that comment made? Which stories do you know of personally or professionally that actually did not work out?
Posted by prinks (3 comments )
Link Flag
I am glad you mention it. STOP BUYING SONY
I am glad you mention this. I was going to buy a sony laptop. Now I will buy an Apple. (They are not outsourcing, right?)
Posted by yacahuma (530 comments )
Reply Link Flag
Apple outsources too
it has it's laptop and built in Taiwan, software in India and marketing only at US.
Posted by nonicks (89 comments )
Link Flag
Me too... dumped Sony. Lousy quality outsourced Indian crap.
Posted by americarocks234 (3 comments )
Link Flag
Brilliant move!
Lets outsource even more manufacturing to China
Lets outsource even more IT to India
Lets let foreign firms buy even more of our natural resource companies and rights.

North America is going to wake up one day to realize that all we have left are
- Sales&Marketing people
- Retail clerks
- Executives

The executives are going to retire with their huge payouts after selling off every asset we have. Meanwhile our kids can look forware to work at starbucks and walmart.

StupidScary.
Posted by kgh120 (6 comments )
Reply Link Flag
We want cheaper products but won't understand the economics
Its us and not the top executives who are responsible for outsourcing. We want cheaper products everyday and most companies have to take these measures to meet the demand.
Its been years since this trend has started and so has the the voice of group who opposes it (see other comments !). But what has been the final outcome, more jobs being outsourced. So instead of mindless backlash, try to understand the root cause.
The reason our economy is doing a bit better and has good forecast is becasue of these steps.
Grow up !
Posted by csg7 (81 comments )
Reply Link Flag
Confused...
Okay, so if it's the consumers at fault, I need something explained to me. Why are the corporate big-wigs still raking in loads of money? Look at reality and you will see they cause of people wanting cheaper goods.

The corporate big-wigs get huge raises and bonuses, advertise like madmen, and cause prices to go up. All the while, many average people see little to no raises and small bonuses if any. The result? People have a harder time affording the now more expensive goods.

If you rate our economy by the stock market alone, you might think we're doing fine. If you look at how people are doing, it doesn't quite match. The stock market is a game for people with money, not an indicator of the real economy.
Posted by ddesy (4336 comments )
Link Flag
Oh please.... I worked with offshore developers for 10 years and nothing but lousy applications. US salaried employees are a thousand times more dedicated.
Posted by americarocks234 (3 comments )
Link Flag
This shows that Sony no longer cares about product quality
Anybody who's bought a Sony product in recent years knows this already.
Posted by jl878524 (12 comments )
Reply Link Flag
Re: This shows that Sony no longer cares about product quality
Unfortunately, I'd have to agree with you - in part. I will say that I believe they still produce quality products.

However, I have yet to see outsourcing or offshoring produce anything other than promises that never seem to materialize.

There's no reason to believe this will be any different. This is a bad move for Sony.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Link Flag
That's a poor opinion
If outsourcing to India by Sony means that their product quality will worsen, then why is it that all the Fortune 500 companies who after outsourcing their back end development to the sub continent have posted larger profits than ever before? No one really cares for that terrible, unjudicious remark you made. I take offence.
Posted by prinks (3 comments )
Link Flag
very funny
check ciol.com
all you will see is - success stories of offshoring to INDIA.
Posted by nonicks (89 comments )
Reply Link Flag
Funny and self-serving
Actually, I think the site itself is a pretty good representation of the quality of work you can expect from offshoring.
Posted by jl878524 (12 comments )
Link Flag
I have plenty of offshore experience. Just bottom of barrel coders; no analysts. Horrible people skills. Lies, lies, lies. Indian culture has no problem with that. Anything to land a contract. One lousy app after another until management finally figured it out.
Posted by americarocks234 (3 comments )
Link Flag
Grow up
I really think its a case of sour grapes for your lot. Maybe you should do some serious homework before you make comments like that.
Posted by prinks (3 comments )
Reply Link Flag
 

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