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Cognizant establishes Irish operations
Tuesday, June 11 2002
by Matthew Clark


US company Cognizant Technology Solutions has announced plans to launch a "near
shore" software development facility in Limerick that will employ 70 people. 

The firm said on Monday that it has plans to purchase certain assets from
UnitedHealth Group's UnitedHealthcare Ireland Ltd. unit, resulting in the
transfer of around 70 IT and software workers to Cognizant. The financial terms
of the deal were not disclosed and the deal requires regulatory approval and
execution of definitive agreements. 



There also remains a possibility for the creation of more jobs in the coming
months as the business looks to expand its European operations further, explained
Larry Gordon, vice president of marketing. 



Cognizant, which employs around 3,900 globally, is one of only a few technology
firms that is sailing through the downturn almost unscathed. The Nasdaq-listed
company saw its shares hit an all-time high only last month, although its stock
has been impacted in recent weeks due to the tensions between Pakistan and India,
a region where Cognizant has substantial operations. 



Cognizant is basically a software and services provider. But the company's unique
business model lets it mark down the price of its services well below what
competitors charge. Essentially, Cognizant fulfils the computer services needs of
its US clients from overseas locations, such as India, where employment costs are
much lower. By offering savings of up to 50 percent to clients, the economic
downturn has only benefited Cognizant on the services side, as customers look to
cut costs. 



In most of its contracts, Cognizant places around 20 percent of the employees
working with a client on the company's US site to provide support. The remaining
80 percent are based in a technical centre in India. The two sides are connected
with fibre-optic and satellite networks.   



The expansion into Ireland is part of Cognizant's previously announced
international expansion strategy, which includes its infrastructure investment in
India and geographic expansion in Europe and Asia. This strategy, announced in
April, will have a particular emphasis on the United Kingdom, the firm has
claimed, in addition to a USD40 million investment in new Indian facilities. The
firm has also recently opened a subsidiary in Singapore and is actively pursuing
alliances and relationships in Japan and Australia. 



"A presence in Ireland will allow us to serve European clients with a near
shore facility, better serve our North American clients who have multi-time zone
requirements, and further solidify the business continuity and disaster recovery
options available to our global clients," said Francisco D'Souza, senior vice
president of Cognizant.



Cognizant, which is 59 percent owned by IMS Health, was spun out from Dun &
Bradstreet in the early 1990s and went public in 1998. For the three months ended
31 March 2002 the company's total revenues increased 7 percent to USD46.5
million, and net income in the period rose 28 percent to USD7.1 million. 



For more information visit the Cognizant Web
site.