Business Standard: Cognizant’s Executive Vice President of Strategy Talks About Demand Environment and New Technologies

“It is a purely arbitrary number,” says Malcolm Frank in response to a question around what it means for the company to cross the $10-billion mark when it meets its 2014 revenue guidance. “We don’t think that really means anything. The important issue is how do we maintain what we think is the special sauce of the Cognizant experience as we continue to scale. The issue is to maintain the culture of entrepreneurism, and to continue to be nimble and continue to outgrow the industry. Those are the things that people are expecting from us and our clients are expecting from us, and so we need to work quite hard to ensure we maintain those things even as the firm scales.”

Commenting further on the company’s 2014 revenue guidance, he says, “Expectations are for the market to determine. From our perspective, we feel quite good about how we are proceeding into 2014. We feel more comfortable about the environment as we enter 2014 compared with how we felt when we entered 2013.”

Touching upon the company’s acquisition philosophy, Frank says, “Our philosophy on acquisitions remains the same—we will look for tuck-ins. Also, we will look at capabilities as opposed to capacities. We will continue to look for acquisitions from a geographic perspective. You will also see us looking for acquisitions in the SMAC (Social, Mobile, Analytics and Cloud) stack and in emerging technologies, and the associated services there. Within industry groups, we would continue to look at acquisitions in financial services, health care, life sciences, and manufacturing.”

In response to a question on non-linearity, Frank says, “I have been in this industry for three decades and discussions about non-linearity have been happening every year. But as of now, it is largely a headcount-to-revenue business. That said, we think there are opportunities in SMAC. I think the opportunity to separate headcount from revenue is greater now than it has ever been. But today, across the industry, we are yet to see a material shift in that direction.”

Frank is upbeat about the client sentiment in the US. “We think the US looks quite good from a number of perspectives; first, the economy continues to recover, though I think it is slower than most people would desire. Second, we are seeing a technology shift, particularly around SMAC technologies, and the internet of things. American firms are trying to digitize quite aggressively, which we think will serve us well,” he says.

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