Cognizant’s founders are making way for a new CEO — and a new approach

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  • IT giant Cognizant announced a change of the guard last evening, in addition to releasing its quarterly results.
  • Brian Humphries, the current CEO of Vodafone’s enterprise solutions unit, has been appointed to replace Francisco D'Souza as CEO.
  • The appointment of a company outsider as CEO - the first in Cognizant’s history - signals a shift away from its core services offering towards cloud computing and data analytics.
IT giant Cognizant announced a change of the guard last evening, in addition to releasing its quarterly results.

Brian Humphries, the current CEO of Vodafone’s enterprise solutions unit, has been appointed as the CEO of the Indian IT services behemoth. He replaces Cognizant’s vice-chairman and co-founder, Francisco D'Souza, who is stepping down in April 2019 after a 12-year stint at the helm of the company.

Reports surfaced in September 2018 that the company was looking for a replacement for D’Souza. When he took over as CEO in 2007, he became the youngest head of a major technology company in the world. In the following 12 years, Cognizant’s annual revenue rose ten-fold to $16.1 billion as the firm became the go-to IT services company for healthcare and life science clients.

Cognizant’s president and co-founder, Rajeev Mehta, who was widely tipped to take over as CEO will also leave his post in April.

The appointment of a company outsider as CEO - the first in Cognizant’s history - signals an evolution in the company’s long-term strategy, and one that will be powered by fresh thinking.

Humphries brings a different set of ideas to the table, having driven the business solutions divisions of consumer-focussed technology majors like Dell and Hewlett Packard over the course of his career, in addition to Vodafone.

As a result, he seems well placed to help Cognizant navigate through an uncertain short term by doubling down on its cloud computing and cybersecurity solutions.

Cognizant just announced a subdued outlook for 2019. It is expecting a 7.5-8.5% growth in revenues, well below the double digit growth it is accustomed to.

Revenues in the quarter ended December were up only 8% as a rise in revenues from its healthcare clients offset sluggish growth in revenues from services for banking clients - its largest source of income.

Cognizant is looking to reduce its reliance on its core IT services offering, which has seen lower margins in recent years and focus on other IT solutions for businesses like cloud services and data analytics.

Most importantly, the company is said to be prioritising inorganic growth over profitability by pursuing acquisitions of smaller firms. Just two weeks ago, it purchased Samlink, a Finnish IT firm, to boost its service offering for companies in the financial services space.


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