For the Nasdaq-listed software services firm, Cognizant, Europe has always been a soft spot. In a bid to achieve a more balanced growth, the $7.35-billion IT company has taken an aggressive stance to gain more business and bulk up its revenue share from the continent, backed by its recent acquisition of German firm C1 and increasing its local presence.
While Cognizant generates close to 80% of its revenue from North America, the largest IT market in the world, Europe contributes about 17% to the overall top line. Experts point out that Europe’s receptiveness to software outsourcing and offshoring has lagged far behind that of North America.
However, the economic downturn is expected to fuel newer outsourcing opportunities for IT-services companies. The New Jersey-based IT company, which has a majority of its employees based in India, recorded revenue of $326 million from Europe during the December quarter, up 19% year-on-year. Sequentially, the revenue from Europe was up 7.8%
?We are hopeful that Europe?s contribution will go up. We want to diverse our business and expect Europe to be a larger contributor to the revenue chunk. We also want Asia Pacific to be a meaningful contributor to the overall business. In a period of time we are sure that our share of revenue will go up from Europe and other geographies,? said Chandrasekaran.? To ramp up its local head count, the company has also started campus hiring in continental Europe last year.
?There are number of opportunities that are opening up in Europe. For one of the important banking clients in the US, we are providing a complete end-to-end offering including application, data centres and BPO services in continental Europe,? R Chandrasekaran, group chief executive, technology and operations, Cognizant, told FE. ?We have bagged two large transformational deals, one of which is a multi-year contract with Philips and a multi-year application outsourcing deal with Rabo Bank. We are seeing large multi-year deals from Europe, which is making it an attractive destination for us,? he added.
He said Europe was a long-term bet for the IT major. ?There might be some short-term ups and downs, but in the long run, it will be a very important market. That is why we are making significant investment in Europe. Our recent acquisition of C1 will increase our presence in Germany and Switzerland. We are creating local capabilities to attract more business. Considering all the investments that we made in Europe, we feel good about the growth prospects,? said Chandrasekaran.