Cognizant to Target More of Smaller Deals as Part of its New Digital Strategy

Share on facebook
Share on google
Share on twitter
Share on linkedin
Time to Read: 2 minutes

Some of these deals are expected to bring transformation and make organizations more competitive while others will be used by companies to upgrade existing legacy infrastructure, or ‘modernization services’.

As the US-based IT services provider undertakes a project-focused approach to turn itself into a more aggressive digital services provider, Cognizant will be focusing on a large number of smaller digital services deals. It has, however, been questioned by the analysts as it can cause a slowdown in global technology expenditure.

“The pivot to digital requires us to rethink many aspects of our company, including our brands, skills, processes, systems and tools. Client engagements will become more project-oriented, meaning more contracts with lower total contract value,” CEO Brian Humphries said in an analyst call last week.

He also informed that “digital projects will not have the same renewal price erosion faced within the legacy unlike the legacy business.”

A distinction between these digital deals is being drawn by the analysts. Some of these deals are expected to bring transformation and make organizations more competitive while others will be used by companies to upgrade existing legacy infrastructure, or ‘modernization services’.

“We predict that as the global economy slips into recession…the business transformation segment will be hit hard by the reduction in discretionary spend, whereas the modernization segment will continue to accelerate…,” said Peter Bendor-Samuel, CEO, Everest Research.

“It would appear from his (Humphries’) commentary that he is directing Cognizant at the business transformation space — this is somewhat surprising as Cognizant seems well positioned to address the modernization space given its large backlog of legacy work,” he said.

Related Article  Venture Catalysts Introduce India’s First Accelerator VC, 9Unicorns Fund

According to its second quarter numbers, revenue from digital services contribute to 35% of Cognizant’s overall revenue while India’s biggest software exporter TCS has pegged this figure at 32.2% in its first quarter results.

We have clearly embarked on the journey of digital transformation and the step by Cognizant is an example of the same. Key IT service providers have started to map strategies on how revenues could be increased from digital offerings: artificial intelligence, cyber security, allied services and cloud.

Leave a Reply

RSS Latest Technology News

  • This Nvidia RTX 3080 crypto mining rig was built into a BMW 'just to annoy gamers' January 26, 2021
    Stock issues have plagued the launch of Nvidia's Ampere-powered RTX 3000 series, with high demand and bots buying up stock to resell online at inflated prices. Crypto miners have also been partially responsible for the shortage of next-gen PC gaming ...
  • Take-Two Interactive nails GTA Online cheat site, makes it shut down January 26, 2021
    It was the perfect crime. There was no need to assemble a gang of eleven misfits, comprised of a perfect ratio of heartthrobs and comic relief specialists who would make their colleagues look even more handsome by comparison. A convoluted plan to pull off ...
  • How to play FAU-G, tips and tricks to win the game January 26, 2021
    FAU-G mobile game is available on the Google Play store. If you have been waiting for this “so-called” PUBG Mobile alternative for a long time, head over to the Play Store using your Android smartphone. Ensure to connect your mobile device to a stable WiFi ...

SUBSCRIBE FOR XTECHALPHA NEWS AND RECEIVE WEEKLY UPDATES

Follow Us

Cognizant to Target More of Smaller Deals as Part of its New Digital Strategy

by Sameer Dhanrajani Time to Read: 1 min
0
AI Tool to Reshape Treatment by Predicting Cell Behaviors
Get to know the latest updates on exponential technologies, new age industry segments with our weekly XTechalpha Xclusive newsletter straight in your mailbox.