Cognizant Acquires KBACE, Makes Headway Into Cloud Service Market

The move shows Cognizant's desire to shift towards disruptive digital technology, focusing on social, mobile, analytics, and cloud computing.

KBACE

IT outsourcing firm Cognizant has acquired U.S.-based KBACE Technologies in an apparent move to bolster its cloud service, one of the high-yielding domains for IT services firms these days.

KBACE comes with 400 consultants and implementation experts, who all will soon start working under the Cognizant brand. Nashua, New Hampshire-based KBACE is an Oracle Cloud partner and specializes in cloud strategy, implementation, and integration.

Faced by decreasing revenue from outsourcing and application management, Cognizant is shifting towards disruptive digital technology, focusing mainly on SMAC, an acronym for social, mobile, analytics, and cloud computing.

Demand for cloud service is growing, with businesses of all stripes and sizes gearing up to move their critical business applications to cloud-based IT infrastructure. Cloud has proved that it can help companies reduce operating cost and complexity, besides improving business agility.

For IT services firms, like Cognizant, cloud has been a tool to offset the declining income from other traditional IT outsourcing services. To cash in on the demand, Cognizant is bulking up on its data centers and making use of Amazon’s AWS, Microsoft‘s Azure and other service providers.

Cognizant’s shares were hit hard on Wall Street recently, particularly after its fourth quarter results missed analysts’ expectations. Despite the stock dip, its revenues in 2015 rose by an impressive 21%, up to $12.4 billion from $10.3 billion in 2014.

Although headquartered in Teaneck, New Jersey, Cognizant was founded by Kenya-born Indian businessman Francisco D’Souza. A majority of its employees are working at its delivery centers spread across India.

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For years, healthcare and financial services have been critical to the company’s success, accounting for more than half of its total revenue. Now, with the commodity market leaving banks with little money to spend on outsourcing services, Cognizant is looking for newer avenues to make money. A spate of healthcare mergers, reports say, has also led some of its clients to suspend IT work.

“The addition of KBACE technologies and expertise in delivering SaaS digital solutions accelerates Cognizant’s cloud strategy and consulting services, provides our clients with access to significant platform expertise and puts us at the forefront of Oracle Cloud partners and technology consultants worldwide,” said Allen Shaheen, executive vice president at Cognizant.

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1 comment

  1.    Reply

    This is part of a larger trend in the IT consulting market right now. Businesses that specialize in Oracle cloud consulting and integration projects are getting acquired across the USA. Here are two other recent deals to note.
    -jp

    Joe Panettieri
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