Tag: Cognizant

The Cognizant Dilemma | Sherpas in Blue Shirts

A very public debate has been taking place between Cognizant and Elliot Management Corp – the activist investor that bought a $1.4 billion stake in Cognizant a year ago. Effectively, Elliot has actively sought to alter the course Cognizant’s board has taken for dealing with the changing situation in the IT services industry. As the leading providers in the services industry have accumulated a lot of cash, investors say it makes sense that they should return extra earnings to the shareholders. Let’s look at both positions.

The Debate Essentially Focuses on a Tradeoff

The legacy labor arbitrage market is mature and services providers can no longer maintain their high margins. However, if they transform to digital business models, they have an opportunity to achieve the same or even better margins.

Which vision is the right strategy for their future? As I explained in my recent post, “The Infosys Dilemma,” Cognizant faces the same tradeoff situation currently causing a noisy debate among the founders, board, CEO, and activist investors at Infosys as to which vision is right.

Providers with a legacy arbitrage-based book of business have two options for growth strategies:

  1. Arbitrage-First Vision. In this strategy, providers use their profitability to invest in mergers/acquisitions, consolidating the industry and becoming even bigger in the arbitrage market. This strategy offsets the declining growth of this market. It also drives shareholder value by returning cash to shareholders through repurchased shares and increased dividends.
  2. Digital-First Vision. In this strategy, providers use their profitability to invest in transforming into digital companies with new opportunities to compete and grow in the future. This is the path Accenture has taken to drive growth. This strategy is higher risk and involves actively cannibalizing a provider’s existing arbitrage business. Further, it doesn’t allow returning cash to shareholders, as providers need to invest in digital transformation including aggressive mergers/acquisitions to quickly gain digital talent and business.

Cognizant initially chose the second path. But in December 2016, Elliot sent a letter to Cognizant’s board stating the company should be managed differently to achieve a higher stock price. It also stated the firm should return some of its cash to its shareholders by buying back stock. Its opinion was, and is, that the firm has a strong enough balance sheet to undertake both growth strategies but that it needs to increase its margins.

Therein lies the dilemma: there is a tradeoff between margins and growth. The inconvenient truth is digital is less profitable right now, so a digital-first strategy means giving up profitability.

Cognizant’s management agreed to change its position to come into conformance with Elliot’s open letter to its shareholders, agreeing to a substantial return of cash to shareholders and committing to improving its margins. Cognizant is well positioned to execute on both these commitments; however, it is also clear that these commitments add difficulty to executing a digital-first strategy.

The commitment to improve margins is particularly risky at a time when the market is facing increasing competitive intensity resulting in downward pressure on margins. Cognizant’s plans to increase profit margins and drive stock valuations up by emphasizing its arbitrage business will inevitably deemphasize a digital-first strategy, which requires a willingness to trade margins for digital growth.

Nearly Half of All Sourcing Investments Leave Enterprises Unsatisfied | Press Release

But in performance rankings, TCS, Cognizant, HCL, Accenture and L&T Infotech are honored for creating best ‘overall experience’ for clients

Despite large-scale investments by service providers, 48 percent of enterprises surveyed by Everest Group are not satisfied with their service provider’s performance. In particular, service providers are performing poorly as “strategic partners” for enterprises and score an average rating of five on a scale of one to ten.

There are also significant gaps in enterprises’ expectations and service providers’ performance with respect to innovation, creative engagement models and day-to-day project management.

“Most service providers are perceived to be technically competent, but technical expertise and domain expertise are considered ‘table stakes’ by enterprises across industries,” said Chirajeet Sengupta, partner at Everest Group.  “Enterprises now expect their service providers to move beyond day-to-day delivery and focus on larger strategic business issues. Unfortunately, service providers still have a long way to go to meaningfully engage clients and become strategic partners, and that is a significant concern for the industry. This research signals the wake-up call and offers service providers guidance on how to strategize their engagement approach and prioritize investments to meet mounting customer expectations.”

In general, enterprises believe that mid- and small-sized service providers bring considerably more innovation and engagement flexibility than their larger counterparts. In fact, enterprises believe some large service providers have become lethargic and complacent and are indifferent to client requirements.

In contrast to these sentiments, five predominantly large service providers received the honor of creating the best “overall experience” for clients, based on client commentary and weighted aggregate ratings given by interviewed enterprises on key assessment dimensions.

  • Accenture: Accenture is perceived to bring market-leading domain expertise to solve complex problems and drive business outcomes.
  • Cognizant: Clients appreciate Cognizant’s approach to becoming their strategic partner as well as its flexibility in commercial constructs.
  • HCL: HCL is perceived to be extremely flexible in commercial models and strong in retaining key talent in its client accounts.
  • L&T Infotech: L&T Infotech is perceived to provide strong commercial flexibility as well as domain competence in the specific industries it operates in.
  • Tata Consultancy Services: Enterprises appreciate TCS’s technical capabilities and initiatives to drive strategic partnership with clients.

These results and other findings are explored in a recently published Everest Group report: “Customer (Dis)Satisfaction: Why Are Enterprises Unhappy with Their Service Providers?” The research summarizes over 130 interviews conducted with enterprises across the globe regarding the capabilities of their service providers with respect to applications, digital, cloud and infrastructure services. The report also details the technology investment priorities of enterprises and opportunity areas for service providers.

***Download Complimentary High-Resolution Graphics***

Key takeaways from the research findings are summarized in a set of high-resolution graphics available for complimentary download here. The graphics may be included in news coverage, with attribution to Everest Group.

The graphics include:

  • (I Can’t Get No) Satisfaction: Nearly half of all enterprises are dissatisfied with their IT service providers
  • Enterprises’ technology investment priorities largely focused on innovation
  • IT service delivery: performance versus value
  • Size matters in selecting an IT services provider
  • The top 5 IT services providers

Cognizant’s Cash Choice is a Lesson for All Service Providers | Sherpas in Blue Shirts

Cognizant is now in a position where it must make important choices, and by extension, most service providers are likely to face the same situation soon. Elliott Management, an activist investor, took a position in Cognizant. When Elliott compared Cognizant’s performance to other benchmark companies in the services industry, it determined that Cognizant is undervalued and could be managed differently to create a higher stock price. Elliott then sent an open letter to Cognizant’s board and management to lay out its thesis and outline a Value-Enhancement Plan.

The activist investor pointed out that Cognizant has a strong balance sheet and a strong cash position and the firm could return some of that cash to its shareholders by buying stock. The letter also stated that Cognizant has room to increase its margins. The basis for this belief is that Infosys, TCS and some other benchmark firms have higher margins than Cognizant and Cognizant could match those margins.

My opinion? Yes, Cognizant has plenty of capacity to generate cash and a strong balance sheet. And it certainly could return more cash to shareholders without diminishing its ability to continue to consolidate the industry through acquisitions and fund its drive into becoming a digital business. However, I think it is very risky for it to follow the rest of Elliott’s thesis of attempting to match its competitor’s margins.

Cognizant already operates just as efficiently as Infosys and TCS, and its gross margins are very similar to its leading competitor. However, its net margins are lower. What does it do with the difference? Cognizant uses it to invest in customer investments and relationships, thus driving growth in its legacy business; and it uses the money to fund its transformation into a digital company.

Basically, there is a tradeoff between margin and growth. Changing that ratio would cause two impacts:

  • It would interfere in Cognizant’s ability to continue to have distinctive, above-market growth in its legacy business.
  • It would hinder investing in digital transformation.

The future of the services market will be about digital companies. Cognizant understands this and is investing against that to change into a digital company. So, it needs that money instead of returning it to shareholders in terms of extra earnings. In my opinion, asking Cognizant to increase its margins would screw up that digital growth strategy. Funding the transformation into a digital company doesn’t come cheap, so Cognizant needs that money even more today than in the past.

It makes sense that this activist investor would go after the industry. The industry has been accumulating cash, and it is highly profitable. But it’s now an industry in change. It also makes sense that the services industry, and specifically Cognizant, can return those handsome earnings to their shareholders. But as most people often find out through life, what makes sense is not always the best choice.

The changing market conditions will make it difficult for all providers to maintain high margins. Basically, it’s unrealistic to expect them to expand margins when there is downward pressure on all margins, and they need their operating margins.

I think this puts the service providers’ choice in stark relief. Basically, the legacy services industry is now mature and the providers face three options of what to do with their cash:

  1. Use their profitability to acquire and become bigger
  2. Return cash to shareholders
  3. Fund the path to transform into digital companies so that they can compete in the future

Providers are facing a hyper-competitive pricing environment in which it will become harder and hard to maintain their existing margins in their legacy business. However, they may be able to get the same or better margins as digital companies.

I think it would be a mistake to ask Cognizant to increase its net margins and not drive growth and not drive the digital transformation. It would be very short sighted to back away from Cognizant’s current growth strategy.

TCS Makes Digital Bet against Accenture and Cognizant | Sherpas in Blue Shirts

TCS is the largest Indian heritage player in the services industry and is a true market leader. But like the rest of the services industry, TCS faces the maturity of the labor arbitrage market. We see it reflected in TCS’ growth over the last year and in its prospects of growth going forward.

Like its competitors – Accenture and Cognizant – TCS aspires to also become a leader in the new market segments of automation, analytics, cloud and cognitive (AACC) or some type of digital technology and the new business models around AACC. However, the TCS strategy to do this is different from Accenture and Cognizant.

TCS is developing the capabilities and technologies for AACC in house and trying to use its tremendous client base to launch these new capabilities. This strategy stands in contrast to Accenture.

Understanding that its ERP practice was very mature and in decline, Accenture decided to take a leadership role in digital. Historically, Accenture has used a “grow your own capabilities” strategy. But it changed course this time, recognizing digital is a different business model and it was moving so fast that Accenture didn’t have time to build its own capabilities. So Accenture has been on an aggressive digital company acquisition strategy to acquire talent – buying, on average, two digital companies a month for the last two years.

Interestingly, these acquisitions have not contributed meaningful revenue to Accenture, but they have contributed significantly to the Accenture growth. They have done this by allowing Accenture to capture the rare skills in this new market and move to the preeminent leader position in the digital marketplace. The race is still early, but Accenture has opened up a tremendous lead.

Moreover, Cognizant joined Accenture in the acquisitive model, recognizing that building its capacity alone would not assure the market leadership role that it desires.

Here’s the question for TCS: Will it have to change its perspective on acquisitions, adopting the examples of Accenture and Cognizant of acquiring capabilities and talents in the digital arena instead of taking the TCS approach of build-your-own capabilities?

The TCS strategy

I believe TCS is playing the long game rather than looking at near-term capabilities gains. TCS has everything it needs to adopt the Accenture and Cognizant strategy – everything except the willingness to do so. It has the balance sheet and sophisticated management. But it also is a thoughtful organization with a strong culture focused on people.

As retired CEO Subramaniam Ramadorai wrote in his 2011 book, “The TCS Story … and Beyond,” “This is a people business and we are mindful that integrating acquisitions in this type of business is very difficult and that many large deals in this sector have failed.” He added that TCS supplements organic growth with acquisitions “where they make sense” but doesn’t “strike too many deals.” He summed up the TCS position with the statement that most companies “can grow organically much faster and achieve better returns by reinvesting in organic growth than in acquisitions.”

The company’s view of organic growth turned out to be right in the case of labor arbitrage. But is it different this time? The winning formula in arbitrage was about capacity and de-risking service delivery. In the digital world, where speed is important, the risk is not having the right technology fast enough.

The TCS approach of building from within may take a bit longer to bear significant fruit, but it may also enable smoother, more integrated operations and a healthy culture with solid benefits down the road.

Will the TCS strategy be powerful enough to capture the leadership position down the road? This will be a long race. Often the early leaders in a race are the eventual winners. But TCS could be a late bloomer. Do you think TCS will maintain its course, or will it move to a more aggressive, acquisitive strategy?

Health Net – Centene Merger Leaves a (Slightly) Bitter Pill for Cognizant | Sherpas in Blue Shirts

On July 2, managed healthcare companies Centene and Health Net announced a merger in a cash-and-stock deal valued at US$6.8 billion, becoming the latest deal in an intensifying wave of consolidation in healthcare. The agreement has been approved by both companies’ Board of Directors and is expected to close in early 2016. The deal combines the two companies, with the joint entity having more than 10 million members and an estimated US$37 billion in revenue this year. The large-scale reform of US healthcare (instigated by the Affordable Care Act) was never expected to be a smooth and genteel affair. One of the immediate impacts was provider consolidation as health systems (which had endemic cost and profitability issues) looked for scale, efficiency, and lean cost structures. A similar trend was also expected in the payer space, but the rollout of the Health Insurance Exchanges (HIX), which operationalized last year, delayed the eventual M&A frenzy. Last month, America’s numero uno insurer, UnitedHealth Group (UHG), approached the number three, Aetna. The latter responded by buying number four, Humana, for $37 billion on July 3, capping a seminal week for mega mergers in health insurance. Humana was earlier reported to be close to a similar deal with Cigna. The second largest, Anthem, is in the midst of a messy takeover attempt as it relentlessly pursues the number five, Cigna (which rejected an initial US$47.5 billion bid). We covered the potential impact of the potential UHG-Aetna and Anthem-Cigna deals on IT services in a blog soon after the first rumors started floating.

Collateral damage – the Cognizant story

The announcement comes at an extremely inopportune time for Cognizant. The company had announced (with much fanfare) a marquee seven-year US$2.7 billion deal with Health Net last August. The engagement was unique in multiple ways. Along with Accenture’s Rio Tinto deal, it is the flag bearer of a bold new deal construct, which epitomizes the fundamental tenets of the As-a-Service economy and widely expected to herald the era of a consumption-based IT services model. Under the terms of the seven-year master services agreement (MSA), Cognizant was to provide a wide gamut of services to Health Net across consulting, technology, and administrative areas spanning claims management, membership and benefits configuration, customer contact center services, information technology, QA, appeals & grievances, and medical management support. Cognizant was to be held responsible for meeting specific SLA targets for improving the quality, effectiveness, and efficiency of multiple operating metrics. These included claims processing and routing times, customer contact center response times, and contact center customer satisfaction targets. In effect, a fairly wide ranging set of services with ambitious KPIs for accountability and governance.

The planned implementation was scheduled to begin in mid-2015. Given the Centene-Health Net deal, the implementation is being deferred, while the deal is completed pending the merger review and approval process. As a result, Cognizant does not expect any contribution (previously pegged at about US$100 million in H2 CY2015) from the deal, which the company can easily absorb without tempering its ambitious revenue guidance for the current financial year. Additionally, it also foresees that if the merger is completed, the existing MSA is not likely to be implemented, which (if it materializes) will be a major setback. Cognizant will still remain a strategic technology/operations partner to Health Net (under a prior contract) through 2020 with a total contract value (TCV) of about US$520 million. Cognizant has also negotiated the right to license certain Health Net IP for use in its solutions and “As-a-Service”platforms, which is not expected to be impacted by the proposed merger.

Looking ahead, despite the short-term loss of US$100 million incremental revenue, Cognizant’s CFO Karen McLoughlin has reaffirmed 2015 guidance as strength in other areas of the business are expected to offset the lost revenue. 2015 revenue is expected to be at least US$12.24 billion with non-GAAP EPS at least US$2.93. Overall, the contract was expected to be margin dilutive in the early years and in generally only “margin neutral over the long run.

Lessons for the services world 

As overall macroeconomic confidence is on the upswing and various industry drivers come into play, the M&A activity is only bound to intensify. This has a profound implication for service providers who are deeply entrenched in such large enterprises and need to be prepared to come out on top of any eventuality. One potential impact of such M&A is the tendency for the combined entity to rationalize its vendor portfolio – choosing to stick to a short list of key strategic vendors by trimming the sourcing pie. The selection criteria for vendors then boils down to specific value-differentiators, maturity of service portfolio, senior management relationships, competitive positioning, and account-level exposure. Technology/operations budgets also tend to shrink as enterprises leverage economy of scale and target operational efficiency.

The following image illustrates the current exposure of key service providers across UHG, Aetna, Anthem, and Cigna. As is evident, these mergers tend to benefit larger service providers that are typically well entrenched across the combining firms. However, a few, may find their portfolios at-risk given competitive underpinnings, sourcing maturity, and enterprise penetration.

Account-level exposure of key service providers

Net-net, we don’t expect Cognizant to be unduly impacted by the proposed merger given the current state of affairs and its leading position in the healthcare and life sciences landscape (poised to reach US$4 billion in annual revenue in the next 18 months). The opportunity at hand is not under threat but there will be significant shifts and redistribution between vendors. The healthcare market is poised to witness increased turbulence (we believe this is just a teaser of things to come) and service providers need to realign and reposition themselves to utilize this opportunity. Let the games begin!

Yet Another Healthcare Blog on Cognizant and Trizetto. Not! | Sherpas in Blue Shirts

As much has already been written about Cognizant and its Trizetto acquisition – including Everest Group’s take: The New “Big Blue” of Healthcare IT? – it is time for us to do a post-facto check on Cognizant’s healthcare IT services business, and ruminate on the state of the healthcare IT market.

What’s up with Cognizant’s healthcare business?

  • Healthcare@Cognizant officially crossed the 30 percent revenue share mark (just behind BFSI at 39.9 percent) in the first quarter of this calendar year
  • Cognizant is the only WITCH (Wipro, Infosys, TCS, Cognizant, and HCL) company with healthcare among its top three industry verticals by revenue
  • In fact, after its Trizetto acquisition, Cognizant’s annual healthcare revenue (in the range of US$3.2 billion) will be more or less equivalent to the sum of the healthcare revenues of WITH combined
  • Per Healthcare Informatics’ Top 100 Healthcare IT providers: Cognizant’s 2013 healthcare revenues, if added to Trizetto’s (a sum of US$2.94 billion) make it the second largest healthcare IT vendor on the list. It is behind only McKesson, and ahead of technology and services behemoths such as Cerner, Dell, Optum, Epic, and Allscripts
  • For the quarter ending March 2015, Cognizant’s healthcare topline grew 42.7 percent year on year, obviously driven by Trizetto’s numbers. Given the growth outlook company has shared with the market, Healthcare@Cognizant is headed toward becoming a US$4 billion unit in the next 18 months – which is huge.

Is healthcare IT a great market to be in?

Let’s put Cognizant’s numbers into perspective with our growth estimates for the overall healthcare IT industry. With the healthcare industry set to grow at a CAGR of 12 percent through 2020, and given what we have seen since we published the following in 2013, the market size projections for healthcare appear well on track to humble the pessimists among analysts.

Global healthcare ITO market

Healthcare – why so serious?

While services spending growth has been steady, especially for the payer and provider markets, the innovation side of healthcare IT has been sulking for a while. Yes, “sulky” is the word that comes to mind when you sit listening to a panel discussion on digital innovation at #AHIPInstitute2015 and not one panelist cites an example of innovation from the healthcare space. They either talk Uber or Airbnb. This is unfortunate.

Despite the huge numbers up for the taking, a big spike in the booming healthcare IT market will not come by unless there is a dawn of new and nimble technology start-ups that change the game of healthcare enterprises looking to move away from bespoke solutions to as-a-service models that reduce their time-to-value exponentially. For good or bad, the healthcare industry in the U.S. has always had an umbilical cord connection closer to Washington D.C. than to Silicon Valley. That is probably what curbs innovation in this industry from breaking out of its shackles to produce its own Ubers and Airbnbs. In my opinion, except for a few fitness/therapeutic/diagnostic wearable-focused investments, little causes titillation in the healthcare technology start-up space. Despite all the brouhaha on the B2C shift, consumer-focused investments are coming more from the enterprise IT side than from third-party innovation. Frankly, do we want to be in a world where Ford not only makes the cars but also drives the cabs? Hence, the question is – in a world dominated by technology vendors (Epic, GE, McKesson, and Philips) are we ready to declutch third-party innovation and let it bloom?

Is this a blog on Cognizant?

There was a reason we titled our blog about Cognizant’s acquisition of Trizetto, “The New Big Blue of Healthcare IT?” The simile was not to herald the dawn of a new behemoth, but to provoke the sort of nimbleness and courage in healthcare IT industry that IBM (the original Big Blue) has shown over the last many decades to stay relevant in the overall technology industry. In an industry with a muffled voice of innovation (few exciting start-ups), a few big bullies (large technology vendors, EMRs, etc.), and well-meaning presiding deities (government and legislatures), the push for change will have to come from outside.

  • Will it be the venture funds and geeks sitting in Silicon Valley who will do the trick?
  • Will it be the EMRs who open up their platforms for an integrated and interoperable healthcare world?
  • Will it be IBM’s Watson that will change the game?
  • Will a recently gone private Dell up the ante toward innovation?
  • Will Cognizant take up the mantle of being an angel integrator for healthcare innovators?
  • Will it be Infosys’ Vishal Sikka, whose US$500 million investment fund will drive traction?
  • Will Google or Microsoft provide the platforms that will gamify technology innovation?

Why did I harp on Cognizant while writing this blog? It was a rank outsider in the healthcare technology industry (well, almost, given its offshoring, pure play service legacy). Even if it becomes a US$4 billion healthcare enterprise, it will still be a fraction of the market. Via its investments, growth, and outlook, what it has given the industry is a peek into the kind of bravado that can make this market rock. We require more of this bravado. But, if it is going to be just once in a blue (pun unintended) moon, it will be rank boring. So, as the Joker would have said, let’s put a smile on that face!

This is the first in a series of blogs Everest Group is publishing on exciting opportunities and implications to watch out for in the healthcare IT services market.

Cognizant Acquires TriZetto: The New “Big Blue” of Healthcare IT? | Sherpas in Blue Shirts

Today, Cognizant announced the acquisition of TriZetto® (a leading provider of healthcare IT software and solutions) for US$2.7 billion. The deal ties in favourably with Cognizant’s dominant position in the healthcare IT marketplace, with the combined entity having US$3 billion in healthcare revenue. TriZetto has around 3,800 employees across the U.S. and India, who will join Cognizant’s existing healthcare business, which currently serves more than 200 clients.

The acquisition is a landmark deal within the Indian IT service provider community, given the size, scale, intent, and implications to the status quo, but what makes it unique is its focus on industry solutions vs. other services-centric acquisitions.

Indian IT service providers’ notable acquisitions


What it means for Cognizant’s services focus

TriZetto primarily develops and licenses IT platforms and service for healthcare providers and payers, competing with the likes of Allscripts, DST Systems, and McKesson. Cognizant aims to leverage its dominant position in the market–a healthcare IT portfolio in excess of US$2 billion–to provide an integrated portfolio across services and platforms. Investing in products and solutions has been a key area of focus for Indian IT service providers as they look to embed their solutions within enterprises buyers, use technology adjacencies, and leverage the technology-platform model instead of flexing just the labor arbitrage card. This acquisition could be one of the steps allowing Cognizant to cross-pollinate and build an integrated (applications/infrastructure/business process services) services play in an industry in which it has primarily relied on its application services strengths. 

What it means for Cognizant’s growth story

Cognizant will get access to multiple software platforms and aims to realize nearly US$1.5 billion of potential revenue synergies over the next five years. TriZetto currently operates at 18.5% margins on a revenue base of US$711 million. The numbers are right in the zone for Cognizant, as it wants to continue to drive its growth-plus-margin story in the high revenue base in which it currently operates. The products, platforms, and solutions play has very unique challenges, opportunities, and operating dynamics. Whether Cognizant can navigate this fundamental transition and still maintain its growth story, will be an interesting study.

How it relates to the way Healthcare IT industry is evolving

The ongoing transformation in the U.S. healthcare system is shaping service provider’s strategies as they look to capture the incremental opportunity that is up for grabs. The focus on driving down healthcare costs, wide-sweeping reforms (driven by Obamacare and ICD-10), and blurring lines between payers and providers, are principally reshaping the healthcare delivery model. Cognizant will aim to drive increased stickiness with healthcare buyers to drive retention in an increasingly complex vendor landscape. It is aimed at garnering a large share of the growth pie, when it comes to the payer and the provider ITO market. This acquisition is an unmatched clear indication that service providers must evolve from a services-only play to a platform-based solutions play, to stay relevant in a market that has an immense potential to grow.


What this means for the competition

The deal will also have myriad implications for the overall healthcare IT services competitive landscape. Most competitors of Cognizant already have a steady revenue stream (large or small) implementing TriZetto solutions, most importantly Facets™, which is used by most payers in the U.S. How this impacts its engagements and partnerships will be tricky. Whether Cognizant will want to (and if so, how) assume a dichotomous role of a partner and competitor will be another interesting area to watch. Additionally, whether Cognizant plans to ultimately absorb TriZetto (thereby dissolving the brand) or leverage its unique positioning is also unclear.

Cognizant is ideally placed in healthcare with few like-sized competitors, allowing it to consolidate. Two things that are definitely salient here–one, Cognizant is going all out to bet big on healthcare; and two, this acquisition has the potential of taking it to a different league altogether! There are already murmurs in the healthcare IT industry equating Cognizant to a new “IBM,” when it comes to its negotiating power at the table. This is another step in ensuring it stays ahead of peers as the competitive intensity in the market increases. The deal definitely has characteristics of a long-term strategic bet than a tactical manoeuvre.

Download the complimentary breaking viewpoint: Cognizant Acquires TriZetto for US$2.7 Billion.

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