11 | Cognizant Technology: Growth Machine

Cognizant is the only major offshore services firm that is not

listed in India. This bit of trivia might explain why it is so different from

the Indian firms. While Indian firms have tried to keep a balance between

margins and growth, Cognizant has consciously reinvested in the business so that

it can grow faster, even if that means lower margins.

Even the execution strategy has been different. Cognizant has

built depth at the cost of breadth. Even today, its revenue, by and large, comes

from ADM whereas most Indian firms have consciously brought that down to 50%

levels. Similarly, three verticalsfinancial services, healthcare, and

manufacturing/retailgave it more than 86% of its revenues. And the Americas

contributed as much as 86%. Call that focus or call that putting too many eggs

in one baskets, so far it has played well for Cognizant. Cognizants growth so

far has remained a credible story. It has delivered.

l Start-up Year: 1994 lProducts & Services: IT services l Address: #5/535, Old Mahabalipuram Road, Thoraipakkam, Chennai 600097 l Tel: 42096000 l Fax: 42096060 l Website: www.cognizant.com

Yet, there are concerns: It has been late in tapping the

high-growth infrastructure services market. Its too dependant on the US

market. So if the dollar slide continues, it will hit Cognizant far more than it

will hit any other offshore firm.

The new 38-year old CEO, Francisco DSouza, who took over in

January, has already initiated a few changes that will broaden the companys

focus without changing the growth-oriented DNA. There are plans to invest

heavily in training and human resources development in India, where companies

like Infosys and Satyam have a distinct edge.

So far, Cognizant has chosen to remain a niche player. At some

stage of companys evolution, it may have to change that. Question is: is the

time now? DQ