Investigating Outsourcing

Sep 29 2010   11:26AM GMT

What do Google and Apple have in common with HCL and Cognizant?

KarlFl40 Profile: KarlFl40

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Apple
Bloomberg
Cognizant
Google
HCL

I had a meeting the other week with a supplier with an interesting way of showing how well it is doing. What better way than to group yourself alongside Google and Apple?

The intelligence arm of HCL did some number crunching on the Bloomberg database using 3 criteria.

Sorry for passing on marketing talk but I think when IT services firms are ranked alongside the likes of Apple and Google it is evidence that it is a hot market. Even a hardened journalist like myself can find some marketing blurb interesting. After all I haven’t got time to number crunch.

The fact that all the companies ranked have recorded over 30% growth over the last five years despite recession is a clear message that IT outsourcing is getting bigger.

These three criteria used were:

1 – Over 30% compound annual growth rate for the last 5 years
Of the 3302 companies in the IT sector only 307 achieved this.

2 – 2009 revenues over $2bn
Of the 307 left only 11 achieved this.

3 – Market Cap greater than $5bn
Only six companies achieved this.

Here are six of them in no particular order.

1 – Lenovo Group
2 – Cognizant Tech
3 – Apple
4 – Google
5 – HCL Technologies

6 – Amazon

4  Comments on this Post

 
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  • Rajavat
    Good insights.

    But a more interesting study finding was presented at a recent conference. I believe the research was done by Accenture in conjunction with Columbia university.

    The research looked at public companies with a market capitalization of over $1 billion for a ten year period ending 2009, across the globe. Globally, there were 4,793 companies that fit this broad criteria.

    Of which, only 2 percent of the companies grew its revenues by 5 percent each year, or 62 companies. And only 0.2 percent of the companies grew its net income by 5 percent each year, or 8 companies.

    Interestingly, only 5 of them saw both revenue and net income grow by 5 percent each year and one of the companies is Cognizant. The others I remember are Yahoo Japan and HDFC Bank.

    The HCL study seems to have been done using parameters that would get the company into the list. A good try, nevertheless. A third-party study like the one I referenced seems more objective and credible.

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  • Karl Flinders
    Thanks Rajavat

    Yes that is more interesting. Do you have a link to that study? If not I will call my Accenture contact and see if he can supply it. If so I will blog about it.

    Yes this will stand Cognizant apart.

    Thanks

    Karl Flinders

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  • Rajavat
    Hello Karl:

    You can reach out to rdm20@columbia.edu or her assistant Anne at anne@ritamcgrath.com for the study.

    Rajavat

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  • Marcellarhughes
    Sorry for passing on marketing talk but I think when IT services firms are ranked alongside the likes of Apple and Google it is evidence that it is a hot market. Even a hardened journalist like myself can find some marketing blurb interesting. After all I haven't got time to number crunch.

    The fact that all the companies ranked have recorded over 30% growth over the last five years despite recession is a clear message that IT outsourcing is getting bigger.

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