Cognizant Technology Solutions remains mindful of the state of your technology. Cognizant provides application maintenance services, business intelligence, data warehousing, software and systems development and integration, and re-engineering services for legacy systems. Its customers are primarily corporations from the Forbes Global 2000. Most of Cognizant's software development centers and employees are located in India, although it has other development and delivery facilities around the world. Cognizant serves more than 780 clients in the financial services, health care, manufacturing, media, retail, and technology industries. The company generates about 80% of its revenues in North America.
Cognizant's top five customers account for more than 16% of revenues, and the top 10 generate nearly 28%. Those percentages are down from 2010, when they were at 18% and 30%, respectively. That's the direction the company wants them to go, as it means the loss of any one of them would have less of a detrimental impact on sales. Business in Europe (excluding the UK) was up 28%, while UK sales rose 25%. With economic worries harassing the region, Cognizant expects growth to there to slow, though the company still considers it a key growth region for the long haul.
Other regions the company is bullish on for long-term growth are the Middle East and Asia/Pacific, especially Japan, India, Australia, and Singapore. In 2012 Cognizant opened a new 30,000 sq. ft. development center in Singapore, and the company cites an independent report that pegs expected IT software and services growth in India to come in at 15% for 2012.
Much of the company's growth has been the result of increasing demand for offshore IT software and services and business process outsourcing as the market place grows more confident in the effectiveness and security of such services. Cognizant has also managed to capitalize on its customer relationships by successfully cross-selling. Additionally, despite the general concerns in Europe, spending on IT projects has risen.
Cognizant has tried to differentiate itself in a crowded IT services market by tailoring its services to specific industries, targeting four key areas -- financial services; health care; manufacturing, retail, and logistics; and technology and media and information services. Customers in the financial services industry account for the largest portion of revenues, about 40% of sales, followed by health care (one-quarter); manufacturing, retail, and logistics (one-fifth); and communications, high tech, and information, media, and entertainment services (less than 15%).
The company also offers a mix of on-site and near-shore and offshore service. Unlike competitors that provide no on-site assistance, Cognizant typically locates technical and account management teams at its customers' locations, with development work handled at dedicated development centers offshore. Those locations are in the US, Canada, Argentina, Hungary, China, India, and the Philippines. This boosts Cognizant's bottom line by taking advantage of cheaper labor costs while maintaining a close connection with its customers.
While many tech companies struggled through the global economic downturn, Cognizant has continued to grow revenues, profits, and headcount over the years. The company has more than 40 IT development centers across India alone, and in 2011 it announced plans to invest more than $500 million through 2014 to build an additional 8 million sq. ft. of office space for more than 55,000 developers. About 80% of the company's employees are based in the Asia/Pacific region, while less than 5% work in Europe, mostly in the UK. Cognizant hired some 25,000 people worldwide in 2010, bringing its total workforce to more than 100,000, and has since grown its team to nearly 140,000.
The company continues to focus on providing capabilities in customer relationship management, enterprise resource planning, data warehousing and business intelligence, software testing, infrastructure management, and vertically-oriented business and knowledge process outsourcing. Cognizant's biggest growth drivers have been infrastructure management and business and knowledge process outsourcing.
Cognizant sees the industry as fragmented and offering opportunities for acquisitions. In 2011 Cognizant acquired CoreLogic Global Services Private Limited (CoreLogic India), a subsidiary of California-based CoreLogic, for about $50 million in cash. The deal expands Cognizant's operations in India, particularly in the areas of software development, analytical modeling, back-office services, and technology support. CoreLogic India has offices in Bangalore, Hyderabad, and Mangalore. Later that year it picked up SAP-focused retail consultant and software developer Zaffera to improve its retail industry expertise in SAP offerings, covering areas such as business analytics and point-of-sale integration.
In May 2010 it bought The PIPC Group, a London-based management consulting firm, which helped expand its geographic footprint in Australia, New Zealand, and the UK. It also bought Paris-based Galileo Performance, a provider of IT testing services, a couple of months later. In 2009 it bought the assets of Pepperweed Advisors, the IT consulting services division of Pepperweed Consulting. It also acquired UBS India Service Centre Private Limited, which expanded its offerings in business process outsourcing and knowledge process outsourcing for the financial services industry. Cognizant follows its global customer expansion with build outs of its sales and marketing offices, and presses on in North America, Europe, Latin America, Asia, and the Middle East.
Cognizant Technology Solutions began as an in-house technology center for Dun & Bradstreet in 1994 and was spun off from D&B in 1996. Two years later Cognizant reorganized and spun off its market research operations into two public companies, IMS Health and Nielsen Media Research, in order to focus on IT services. – less