As a growing number of companies continue to shift to the cloud, cloud migration services “will continue to be a big opportunity” for Cognizant, according to its CFO, Karen McLoughlin.
Noting that “almost everybody is playing in cloud,” she told the RBC 2019 Global Technology, Internet, Media and Telecommunications (TIMT) Conference in New York Nov. 19 that it’s just a “very big marketplace [with] lots of room for lots of competitors.”
And “if you look at the big cloud providers, they are all actively seeking partners who can be the services providers to help clients migrate to the cloud,” she told attendees.
Asked where we are in the cloud migration cycle, she responded: “On the one hand, I think we’re very early in the cycle. On the other hand, I would actually say it’s moved faster than certainly I might have expected a few years ago. A few years ago, when we started talking about cloud and particularly our client base,” the discussion was around “large, global 2,000 Fortune 500-type companies,” she noted. At that point, “there was a lot of dialogue about” whether those companies will go to the cloud or not, or “just put some peripheral things” in the public or private cloud.
But “I think what you’ve seen over the last really two years or so [is] most companies now are very comfortable saying, ‘Yes, I’m on a cloud migration journey,’ and the question is then how fast can they move and how do they do that?” she said.
Therefore, “I think there’s lots of opportunity there in the coming years,” she told attendees.
Digital engineering, meanwhile, has “been a big focus for us in the last couple of years” also, she told the conference, noting Cognizant has made a couple of acquisitions in that sector, including its purchase of privately-held digital engineering and consulting company Softvision about a year ago.
The purchase of Softvision “gives us a very strong footprint in the digital engineering space,” she pointed out, adding it also provided Cognizant with a “very strong methodology… to deliver digital engineering projects at scale for clients.” Therefore, that’s “been a great acquisition that we will continue to build” on, she said. Through the Softvision acquisition, Cognizant was “seeing good traction for digital engineering solutions with our technology clients,” she told analysts during the company’s earnings call for its second quarter (ended June 30).
Another area that Cognizant has been focused on recently is the Internet of Things (IoT), which she noted Nov. 19 represents a “newer space for us.” It’s a sector that it “really started to get a lot more focused” on when Brian Humphries became the firm’s CEO early this year, “partially because of his background,” she said.
IoT represents another “market opportunity that is very, very significant,” she said. It’s just the “early stages in that market and when we looked across the landscape, we said …. there really aren’t a lot of competitors in that space who have really been able to stake a claim in a meaningful way yet,” she noted, adding Cognizant already had “some nice capabilities to build upon” and that became more significant recently with Cognizant’s purchase of Zenith Technologies. That firm was “focused on IoT in the life sciences manufacturing space,” she said, adding it has strengthened Cognizant’s “footprints to really now build upon that business moving forward.”