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Cognizant

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

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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

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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

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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

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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?

  • [email protected] 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, [email protected] 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

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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

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.

Global healthcare ITO market

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.

Internet of Things Opens Up Intriguing New Growth Opportunities for Service Providers | Sherpas in Blue Shirts

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Code Halos: How the Digital Lives of People, Things, and Organizations are Changing the Rules of Business, by Cognizant’s Malcolm Frank, Paul Roehrig and Ben Pring, discusses the impact of the already huge and ever-increasing amounts of data surrounding individuals and our environment. The authors point out today many pieces of equipment or devices have the potential to generate data about themselves and we can collect, analyze and act on that information and transform the world around us. The implications for service providers are exciting.

The authors of Code Halos explain that equipment, processes and people will have so much information coming off of them that it will create a halo that surrounds them, containing an ongoing flow of information.

An example is a GE jet engine into which GE has put sensors that provide GE and its customers with ongoing diagnostics of an engine’s performance, location and conditions on which it’s operating. This information is collected and synthesized, allowing GE to move from a one-to-many maintenance schedule to an individualized path that treats all of its jet engines the same with customized maintenance. This allows GE to predict when an engine is going to fail so the company can act ahead of failure. Creating customized maintenance also dramatically improves the performance and cost to maintain the engines.

The same potential exists for most, if not all, pieces of equipment. Let’s take the common light bulb. Today we can put a sensor on the light bulb and treat that bulb as an independent entity. We can monitor its working conditions, its useful life, replace it when necessary and adjust the electricity coming to it for greater or lesser amount of light at certain times and conditions. So we can take the most mundane household appliance and create a code halo around it and transform its use, its cost to serve and its usefulness.

As the authors rightfully point out in the book, if we apply this to business processes, it opens up an unending series of opportunities to apply digital technologies and transform the world around us.

One of the meta effects of this phenomenon is that service providers can create completely new lines of service to transform their impact on their customers. Think of GE, which utilizes Genpact to gather and analyze the data to transform its maintenance of its jet engines.

In a services world where we have maturing markets for traditional outsourced application development services, the potential of these code halos is almost limitless. And the need for partnership with companies such as Genpact and Cognizant is significant.

This could create a whole new set of services and market growth opportunities in a maturing market space and become a significant bright spot for the services industry.

The Limits of Verticalization | Sherpas in Blue Shirts

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Many service providers are busy organizing along vertical industries and going to market with vertical solutions. As the services industry matures, it’s very clear that customers want to do business with companies that understand their industry. However, many providers find that verticalization doesn’t give them the growth acceleration they anticipated. So there are limits to this strategy; just knowing about a customer’s industry is not enough. What’s missing?

Customers want providers to know more about their industry but also to know more about their business and how they operate. Providers that succeed in putting these two aspects together enjoy faster growth.

Cognizant is an example of how to be effective in this strategy. They have organized by industry and built industry expertise, but they also invest a great deal in understanding their clients and leaving the teams or key players in place for clients (particularly the in-country teams).

Customers express a lot of frustration to us. They don’t like providers’ churn. They have to train new people every six months, and the churn is debilitating. They want providers whose people get to know them, build relationships with them and understand who they are and how they work. Those kinds of relationships allow both parties to cut through the noise and get things done.

Despite what the customers are looking for, we see many providers responding in one dimension — the industry knowledge.

My advice to providers: don’t overlook how important relationships are. It doesn’t matter how clever you are or how much vertical knowledge you have. The relationship activates the opportunity.


Photo credit: Curtis Perry

Cognizant Shows New Signs of a Market Maturing | Sherpas in Blue Shirts

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In its latest quarterly earnings report, Cognizant recently guided to slower growth than they achieved last year. Although it is usual for Cognizant to be conservative in its guidance, it is still notable that it is sanguine about repeating last year’s strong performance in what most regard as an improving economy. Cognizant has been the bellwether in terms of fast market growth and the envy of every service provider in the marketplace in its ability to consistently growth faster than the market. So why is Cognizant guiding down on this year’s growth?

Hard Truths

To be clear, Cognizant still expects to grow substantially faster than the rest of the industry and raised its guidance relative to past year. But with an economy expected to improve and discretionary spending on the rise why the recent indication of slower growth ahead?

It’s an important question. The answer: Cognizant always guides lower than it performs, and it knows that growth is becoming more difficult and more expensive in the maturing marketplace. This is especially true in its Horizon 1 offerings (application development and maintenance), which is core to Cognizant’s business.

Having said that, Cognizant is still well positioned for growth because of its Horizon 2 focus (BPO, IT infrastructure and consulting) and Horizon 3 offers in in cloud, mobile and next-gen solutions. Even so, Cognizant’s latest guidance to slower growth indicates it is guiding the market to a realistic perspective.

The Outlook

I believe this acts as a warning for the overall marketplace and supports Everest Group’s long-stated guidance for the last few years that the outsourcing space, especially the talent-based space, has moved into a more mature phase.

In a maturing marketplace, clients are more discriminating. They pressure service providers on price points. And they ask their providers to know more about the client’s industry and business. Those demands will likely result in slower growth and fiercer competition.


Photo credit: Cognizant Technology Solutions

Cognizant Prepares for Inevitable Shift in Immigration Law | Sherpas in Blue Shirts

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Cognizant recently made two key announcements. One was that they are hiring 10,000 people in the United States. The other is that they are relocating their operations center from New Jersey to College Station, Texas.

Taken together, it’s evident that Cognizant is doubling down on its U.S. presence. It’s moving to low-cost locations and is expanding its presence.

We also know that Cognizant is likely to be one of the firms most impacted by immigration and H-1B visa reform. We believe these actions indicate that Cognizant is taking a preemptive strike to prepare itself for a day when it won’t be able to use H-1B visas as aggressively.

Although the potential immigration reform may not be directly driving Cognizant’s increased U.S. presence, the announced plans certainly lay the groundwork for Cognizant to address H-1B visa issues should negative immigration law be forthcoming over the next few years.


Photo credit: Cognizant Technology Solutions