This was the latest of developments in the healthcare verticals of India-centric IT services firms that have grabbed headlines in recent months, for positive or negative reasons.
In November last year, the US Supreme Court rejected Tata Consultancy Services‘ appeal against a District Court of Wisconsin verdict, charging $140 million in punitive damages in a case filed by Epic Systems. The US healthcare software company had accused TCS of stealing its intellectual property when the Indian firm was contracted to implement its software.
A month later, Bengaluru-based Wipro initiated legal action against Mohd Haque, the company’s former senior vice president and head of healthcare and medical devices for the Americas, after he joined Cognizant. Wipro demanded a jury trial for his alleged breach of non-compete clauses by joining a direct competitor.
ETtechIT companies are also witnessing improved performance at their healthcare verticals.
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For the first time in Cognizant’s history, its healthcare vertical revenue topped banking financial services and insurance (BFSI) in the December quarter of 2023 — $1,396 million against $1,395 million. Today, healthcare contributes about 30.1% to the US-based company’s revenue, while financial services accounts for 29.8%.
At Wipro, health was the only vertical among its seven that posted growth — 7% year-on-year — in the first quarter of FY25.
Competition too has been on the rise.
In February, there was a news report of Wipro losing a contract with Japan’s Takeda Pharmaceutical to Cognizant, months after the Bengaluru-based company’s former finance chief Jatin Dalal joined the larger rival. Previously, Wipro had provided IT services to Takeda under a $400 million, 10-year outsourcing contract starting 2014.
Meanwhile, Infosys has been beefing up its life sciences business. “Life sciences are on the ascent in Infosys, leveraging investments in SAP, but overall, it’s been challenging for them to take business away from established healthcare tech and consulting shops such as Accenture, EY, Cognizant and Optum,” said Phil Fersht, CEO of HFS Research. “However, Infosys is growing steadily and has ambitions to reach $2 billion in (life sciences) revenue in the next three years from the $700 million they are currently at.”
In June this year, Tech Mahindra approved the merger of its arm Healthnxt Inc with parent company Tech Mahindra Americas. The company at that point of time said businesses of both entities were complementary, hence consolidation would result in synergy of business operations, optimise operational cost and reduce compliance risk.
In the same month, global medical technology company Olympus Corp partnered with HCLTech to establish a research and development offshore centre in Hyderabad. Experts hailed HCLTech partnering with an old client as a smart way to leverage the current global capability centre wave.
