Finally, the company has gained from its focus on fewer countries and industry segments. In , the US accounted for three-fourths of its total revenue, while business from banking, financial services and insurance and healthcare accounted for The Elliott chapter was a distraction for the company, and it needs to be seen if the company can get back its old DNA. Amazon, which was also founded in , set up its cloud services business, Amazon Web Services, in Never miss a story!
Stay connected and informed with Mint. Download our App Now!! It'll just take a moment. Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image. Till a couple of years back, its biggest acquisition was marketRx, a company in analytics space. Number of people who came in: Last year, it bought Corelogic's India operations. Headcount addition: people, ten times more.
In contrast, Infosys has been dragging its feet on acquisitions. There seems to be no apparent reason why it should. Consider: it has been hiring several thousands of new employees every year. Last quarter alone it brought in over people.
It has done complex deals before. The Philips deal is a classic case. One answer could be in the way Infosys looks at acquisitions. It wants to "feel right" about an acquisition.
There is no plan like falling in love! There lies the problem. Many fast growth companies tend to look at an acquisition not as 'falling in love', but as arranged marriages.
Things often work out. The market share game Cognizant came late to the party, and so, it had to tell a more compelling story to the investors to get their attention. In other words, we will keep increasing our market share, come what may.
We will eat into others' pie. Cognizant more or less stuck to that line. His only regret was that, he said, he did not invest even more aggressively and grow even faster. In the context of Cognizant, it meant putting more people on the ground; getting them to spend more time with specific set of must-have customers, disproportionate to the revenue they might account for at that specific point of time; taking on projects which might not give high margins initially, but might eventually become big; investing more resources on a specific project compared to what peers do and so on.
All these meant, Cognizant was constantly grabbing more market share. Contrast this with Infosys. In the last few quarters, it has been growing slower than the industry. And in the last two, it has not been able to keep even with the real GDP growth.
The lack of momentum will cause a drag, even after the market picks up. There will be lost growth opportunities from the organisations it did not gain a foothold in. On the supply side, a slow growth company will find it difficult to attract good talent.
Cognizant had more elbow room to get the market share, and it used it well. Infosys was too constrained by a compelling need to maintain margins. In short, Cognizant was firing on all cylinders - on the basic robustness of the market, increasingly bold acquisitions, and ability to grab market share. Infosys was relying on just one - the robustness of the market.
And when that failed, it simply let Cognizant run past it. Marathon runners don't sprint, because they are in it for the long haul. The only problem with that analogy is that its competitors are running marathons too. When there is plenty of oxygen available for metabolism, glycogen is easily broken down in a process called aerobic metabolism to create ATP which keeps you happy and moving. Lactic acid is not good.
It hurts. Beyond a certain threshold fatigue sets in and, even worse, glycogen starts breaking down even more quickly into lactic acid, creating a self-perpetuating cycle of progressive awfulness. Font Size Abc Small. Abc Medium. Abc Large. It has been days since you took charge as the CEO of Cognizant. How did you spend the first few months as CEO? Where do you think the company is falling back and what has been the feedback from key clients?
I tend to think about three categories of people as pretty critical to our future; one is our employee base, our associates and making sure I got my finger on the pulse in terms of their hearts and minds and their engagement. Then I also think about the two Cs -- customers and the competition. I wake up in the morning and I think about the outside world. I have spent the vast majority of the last six months with customers and with our associates and taking care of both these audiences.
That is great. That is a good start. But earlier this month, you likened Cognizant to a house that has not been cleaned in ages. Where do you tend to find a lot of stuff that you do not need anymore and when do you see the cleanup process ending? Also what will it entail in terms of jobs?
Cognizant has 25 years of tremendous heritage and legacy and it has been a growth company over the years and with that success, comes an opportunity facing the world of digital. That could be Internet of Things, which should accelerate with 5G, data, cloud, or indeed digital engineering. That has been one of the key factors above ground that I have drawn out for the future.
Stock Analysis — Know before investing. Stock score of Infosys Ltd moved up by 1 in a week on a point scale. Subscribe Now Exclusively for. Stock Analysis Stock score of Infosys Ltd is 10 on a scale of View Stock Analysis ».
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