Satyam sets up testing center for MasterCard

The deal reflects the company's growing acceptability with customers, as it recovers from a financial scandal

Satyam Computer Services is setting up a business applications testing center in Kuala Lumpur, Malaysia, for payments company MasterCard, reflecting a growing interest among customers to sign up new business with the Indian outsourcer as it recovers from a financial scandal.

Satyam -- now trading under the Mahindra Satyam brand to reflect its new owner, Tech Mahindra -- will provide support for global testing for MasterCard's business applications, as well as application development in Java and business intelligence, it said in a filing to the Bombay Stock Exchange on Monday. It did not disclose the value of the deal.

"The focus of the center will predominantly be on testing but we will also do software development for MasterCard," said Hari Thalapalli, Satyam's chief marketing officer. The relationship with MasterCard has grown from a one-time deal about six months ago to a more enduring relationship, he said.

Earlier this month, Satyam said it had set up an offshore development center in Hyderabad, India, for health-care company Roche. The center is to deliver services in the areas of application development, testing, project management, and training.

Satyam was plunged into a financial crisis in January 2009 after its co-founder B. Ramalinga Raju confessed that the company's revenue and profit had been inflated for a number of years. The Indian government took over the company and invited bids for a strategic stake. Tech Mahindra acquired a dominant 43 percent of the company.

Satyam reported a loss for the quarter ended March 31, but this was because of a charge to settle a class-action lawsuit from investors in connection with the 2009 scandal. Excluding the charge, the company had a net profit higher than in the previous quarter. Revenue was also higher than in the previous quarter.

Analysts said this month that customers are now willing to consider giving business to Satyam, a significant change from the large number of customers who rushed for the door after Satyam's financial irregularities became public.

The company said it added 12 new customers in the quarter ended March 31. A lot more new customers are signing up in comparison to a few quarters earlier, Thalapalli said. The company also expects to close some large deals in this quarter, he added.

The company has been expanding in Malaysia, even before the scandal, as part of its strategy to build delivery centers outside India.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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