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IT services supplier Cognizant sees cloud sales take off in quarterly results

Karl Flinders

IT service firm Cognizant reported almost 27% sales growth in its latest financial quarter, with cloud computing and mobile investments growing above industry average.

Cognizant said there had been a return of large outsourcing projects as well as a few transformational contracts.

Cognizant reported sales worth $1.6bn in the final three months of 2011. Sales for the full year were $6.12bn, 33% higher than in 2010.

Sanjiv Gossain, UK managing director at Cognizant, said UK customers favour contracts that offer savings in the first year.

On the technology front, Gossain said customers are trying things out in the cloud, with cloud assessment service sales in demand as well as platform-based business processes as services.

Cognizant is seeing demand for mobile services which reflects trends in the market, with enterprises moving mobile to satisfy customer demand and requests from employees to use their own mobile devices as part of their work.

Gossain said services suppliers such as Cognizant have had to broaden their offerings to continue to grow. He said Cognizant had already broadened its offering, investing in its consultancy business for example. But he said acquisitions could be made to fill gaps.

Cognizant added over 7,000 workers in the final three months of last year and now employs 137,700.

Peter Schumacher, CEO at management consultant The Value Leadership Group, said Cognizant stood apart from many of the growing global service providers. He said services providers, particularly the India-based suppliers, are challenging large western based global service providers Accenture and IBM Global Services for global clients.

The Value Leadership Group recently completed research of 80 large companies across Europe, looking at their attitudes to IT service providers. It found customers are increasingly attracted to offshore suppliers that have a global footprint. 

Schumacher said Cognizant – commonly grouped with Indian suppliers because most of its staff are based in India – stands out from this crowd because of its US management.

“The key difference that Cognizant brings to the table is the fact that it can connect the business and IT and deliver technology enabled business change. The Indian companies come at it from a functional point of view and fix a problem but when a client asks for more in-depth advice such as making the business more agile to react to a competitive challenge, they struggle.”

Schumacher said that, in the view of companies interviewed in the survey, Cognizant speaks the language of business and IT, whereas many other offshore suppliers talk IT only.

Read more about Cognizant here.


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