FREMONT, Calif. — Sierra Atlantic Inc., an IT company that specializes in enterprise applications and outsourced product development, has acquired ArrAy Inc., a Boston-based software-engineering services firm with global delivery centers in Guangzhou and Shanghai, China.

The deal makes Sierra Atlantic one of the first mid-sized IT businesses to have developing capabilities in China, the company said.

The Chinese locations will augment the Fremont, Calif.-based company's Indian operations located in Hyderabad. The combined entity after the companies assimilate operations will have more than 1,500 employees worldwide.

"Customer intimacy is our priority," said Raju Reddy, chairman and chief executive officer of Sierra Atlantic. "We need to have a presence in China to be a leader in the market segment that we are operating in. China has talent that is on par with India."

The company will continue to serve the United States and European customers for the New Oracle Economy, which is Oracle Corp.'s collection of software from PeopleSoft, Siebel, and others. Sierra Atlantic's Chinese arm will continue to work toward complimenting the company's core competencies in outsourced product development and testing services.

"Sierra Atlantic has been an excellent partner servicing our IT needs over four years," Werner Baer, PPG Industries' vice president of information technology, said in a statement. "They have consistently met our needs, and, for a fast growing company like PPG, their global delivery capabilities are highly valued. In particular, as PPG is expanding operations significantly in China, Sierra Atlantic's expansion into that market opens additional opportunities for us to leverage lower cost services locally that have the appropriate language skills."

Reddy said that currently ArrAy has about 200 employees in China. He hopes to expand this number to about 500 in the next year.

"The management team in China has lived and worked here in the United States," he said. "We have experienced professionals and have managed teams in China and India."

Reddy also said that the deal would be beneficial to most of Sierra Atlantic's customers. Some of its customers include Network Appliance Inc., Microsoft Corp. and Qualcomm Inc.

"For a lot of our customers China represents an important and strategic market," he said. "By having a presence in China we become much more valuable by providing strategic services to them. I think we wanted to expand and set Sierra Atlantic apart from the rest of the industry."

ArrAy is one of only a few companies in the United States to have developed a high quality delivery capability in China, according to Reddy. The expanded geographic presence will enable Sierra Atlantic to meet the increasing demands of its customers, providing offshore delivery from both India and China.

"We are excited about the additional opportunities we can pursue with the increased resources and capabilities that Sierra Atlantic provides and the expanded client base that we can serve," Charlie Palmer, ArrAy co-chief executive officer, said in a statement. "Our employees are very eager about the prospects of integrating our sales and delivery teams and providing our clients the best software development services the world has to offer from India, China and the United States."