Cognizant Connects With Europe

Cognizant Technology Solutions Corp. (CRN Fast Growth 100, No. 40), the leader in offshore IT services, has found a way to expand its customer base further into Europe by forming a partnership with T-Systems Inc., a division of Deutsche Telekom, Bonn, Germany. The deal is aimed at increasing the geographic footprint of both companies, as well as increasing the breadth of services they offer in Europe, North America, South America and Asia. The thought is that 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 healthy in the German market, with a leading market share of approximately 16 percent, according to global investment titan The Goldman Sachs Group Inc., New York. Analysts at that firm considered the arrangement a "clear strategic positive" for Cognizant, giving it strong headway and a first-mover advantage in Germany. That large market is widely considered by observers to be the next to embrace offshore. In addition, Cognizant's focus on SAP should help the partnership get a foothold in the large German SAP installed base.

Cognizant, 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 proved 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 partnership, T-Systems India and its approximately 1,150 employees will be transferred to Cognizant, which currently employs more than 55,000 worldwide.