Offshore Outsourcer Cognizant Picks Up European Partner

Cognizant has found a way to expand its customer base on the European continent; the leader in offshore IT services has formed a partnership with T-Systems, a division of Deutsche Telekom. The deal is aimed at increasing the geographic footprint of the two companies, as well as increasing the breadth of services they offer in Europe, North and South America and Asia. T-Systems' strong existing customer relationships combined with Cognizant's global delivery capacity will be positioned as a value proposition to customers in the region.

T-Systems is strong in the German market, with a leading market share of approximately 16 percent, according to Goldman Sachs. Analysts at that investment firm considered the arrangement a "clear strategic positive" for CTSH, giving it a strong headway and first-mover advantage in Germany. That large market is widely considered by observers to be the next to open up to offshore. In addition, Cognizant's focus on SAP should help the partnership get a foothold in the large, German, SAP-installed base.

Cognizant (CRN Fast Growth company #40), Teaneck, N.J., provides information technology, consulting and business process outsourcing services through more than 35 global delivery centers. T-Systems focuses on desktop services, systems integration, computing and network services and e-business. Europe has proven tricky for outsourcing firms such as Cognizant with large Indian operations, as well as for other competitors that have acquired offshore workforces attempting to gain traction, said Reinhard Clemens, management board member for business customers at Deutsche Telekom and CEO of T-Systems.

"Our new alliance will open up new opportunities, add significantly to T-Systems' profitability, and give both partners a stronger footing in key vertical industries," Clemens said in a statement.

As part of the new business partnership, T-Systems India and its approximately 1,150 employees will be transferred to Cognizant, which currently has more than 55,000 employees worldwide.