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Sep 15, 2014, by Dominique Raviart
Cognizant is to acquire TriZetto, a healthcare ISV in the U.S., for $2.7bn in cash.
TriZetto has a headcount of 3.7k (Cognizant at end of H1 2014: 187k.4). In its last 12 months, TriZetto had $711m in revenues and a non-GAAP operating margin of 18.4% (Cognizant in 2013: 20.6%).
TriZetto LTM revenues breakdown by service/product line is:
Payer software: 40% (~$277m)
Consulting: 23% (~[...]
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Sep 15, 2014, by Dominique Raviart
TCS, Infosys and SQS have recently published their calendar Q1 and H1 2014 revenues, and provided financial details on their software testing revenues (see notes below).
In calendar H1 2014 (all numbers below are constant perimeter NelsonHall estimates):
TCS: revenues were ~+24% to ~$612m (H1 2013: ~+23%)
Infosys: ~+21% to ~$395m (H1 2013: ~+15%)
SQS: + 9% to €129m (~$174m) (H1 2[...]
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Aug 29, 2014, by Dominique Raviart
EVRY has announced that it is considering strategic opportunities including a sale. EVRY is in theory an attractive target: the company has a sizable presence in a region with short- to mid-term growth potential:
It is the largest IT service vendor in Norway ($1bn in revenues, excluding its financial services unit). Norway, with an economy that is heavily influenced by oil & ga[...]
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Aug 21, 2014, by Dominique Raviart
Wipro has updated NelsonHall on its ServiceNXT initiative. ServiceNXT aims to increase productivity in both IT infrastructure management and application management contracts. ServiceNXT is based on:
Usage of Wipro IP and recommended COTS tools across the client’s operation for various tasks including ITSM, change management, demand management, problem management
Analytics, based on d[...]
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Aug 19, 2014, by Dominique Raviart
T-Systems recently updated NelsonHall on its virtual desktop service offering, Dynamic Workplace, its new brand name for Future Workplace, a virtual desktop offering introduced in 2013.
T-Systems Dynamic Workplace was introduced to address client needs for virtual desktop and mobility overall, based on a centralized approach to applications and data. T-Systems with this offering has taken sever[...]
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Aug 12, 2014, by Dominique Raviart
CSC recently briefed NelsonHall on its SAP Next-Gen offering, unveiled in June 2014.
CSC’s SAP practice is relatively large within CSC (headcount 7.7k, ~10% of CSC’s overall 80k). CSC has recently engaged in a service portfolio refresh to increase its differentiation through more specialized SAP-related services. This differentiation relies on adoption of automation tools and enhanc[...]
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Aug 12, 2014, by Dominique Raviart
Sopra recently updated NelsonHall on its application management (AM) capabilities. In 2013 Sopra generated ~€393m revenues from AM, or ~29% of its total revenues. The company is a top application management vendor in its domestic market, along with Accenture, Capgemini, Atos CGI, and IBM. Key AM clients of Sopra include Airbus, Orange, SFR, Crédit Agricole, EDF, Auchan, SNCF, BN Pariba[...]
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Jul 18, 2014, by Dominique Raviart
Tieto's Q2 2014 revenues were €386.4m, down 7.3% y/y, and down 1.3% y/y at constant currency. (for full details see here)
Q2 2014 revenue (and growth both on an actual and CC/organic basis) by service line was:
Managed Services: €132m (+5%, +9%). Half of the CC organic growth this quarter resulted from hardware reselling as part of a large IT infrastruct[...]
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Jul 10, 2014, by Dominique Raviart
TCS recently briefed NelsonHall on the intelligent testing system (ITS) it launched in April 2013 in an effort to automate tasks across the software testing lifecycle. It intends to expand usage of test automation from test execution to include other tasks e.g. test design and test support services such as test data management and service virtualization.
ITS integrates COTS tools e.g. Inf[...]
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Jul 08, 2014, by Dominique Raviart
In the world of IT services, professional services, e.g. consulting, systems integration and application development, are a cyclical business. Spending growth – or decline – depends very much on GDP growth, corporate moral and investment intentions. Professional services growth has varied since on a quarterly basis, since 2008, between -8% to +9%, on a worldwide basis.
IT outsourcin[...]
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Jun 06, 2014, by Dominique Raviart
Sopra and CS Communication & Systèmes, a French IT services vendor, have announced a multi-tiered agreement:
CS is to proceed to a €12m convertible bond issuance (maturity 5 years, conversion price per share: €3.6; interest rate: 4%; delivery: July 2014). As part of this issuance, Sopra agreed with DUNA & Cie, th[...]
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Jun 04, 2014, by Dominique Raviart
Bloomberg reports that Sprint and T-Mobile U.S.A. are close to a merger whereby Sprint would acquire T-Mobile U.S. for $40 a share (up 17% from the current $34), valuing the company to $31bn. Deutsche Telekom (DTAG), which holds a 67% stake in T-Mobile U.S.A., would receive 27.5% in cash, 27.5% in Sprint stock and retain a 12% stake in T-Mobile U.S.A.
T-Mobile U.S.A. had 2013 revenues of $24.4b[...]
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May 28, 2014, by Dominique Raviart
Tech Mahindra Testing Services (TMTS) recently provided insights on the work it is doing to expand automation outside of test execution to newer areas.
Part of the company’s rationale in increasing the level of automation is based on statistics showing testing teams suffer testing cycle delays regularly, representing 31% to 69% of their testing time. Testing delay result from a variety of[...]
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May 26, 2014, by Dominique Raviart
Atos is to acquire France-headquartered technology vendor Bull for €620m in an all cash transaction. Atos offers €4.9 per Bull share, a premium of 22% over May 23’s closure price of €4.01. The offer is conditional on Atos receiving 50% and 1 shares. The largest shareholders of Bull, Crescendo Industries and Pothar Investments, which own a 24.2% stake in Bull, ha[...]
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May 23, 2014, by Dominique Raviart
Capgemini held its 2014 investor and analyst day this week. For the first time since the beginning of the 2008-2013 crisis, the company has talked about organic growth, a significant development on its focus in recent years on margin improvement. Capgemini’s guidance for 2014 is organic revenue growth of 2% to 4%. The company has now shared a mid-term target of 5% to 7% organic growth. This [...]
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Apr 08, 2014, by Dominique Raviart
Sopra Group is to acquire Steria for an all-share transaction valuing Steria at €722m. The acquisition is presented as a merger of equals.
Sopra's rationale for the acquisition includes:
Expanding its geographical presence from France to the U.K., Germany and Norway
Gaining a new service portfolio in BPO services and IM.
Sopra is to launch a public exchange [...]
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Apr 04, 2014, by Dominique Raviart
NelsonHall recently attended an Atos analyst summit which provided a follow-up to the 2014-6 three-year plan first outlined last November (see our blog “Atos Unveils 2016 Financial Objectives”). As a reminder, the financial targets for IT services are:
2014-2016 CAGR of 5% with half of this growth to come from acquisition
A 100 to 200 bps improvement in adjusted operating margi[...]
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Mar 24, 2014, by Dominique Raviart
NelsonHall recently attended Computacenter's second ever analyst and advisor day. The company highlighted recent achievements, its connection with hardware and software reselling and its immediate strategic priorities.
CEO Mike Norris referred back to 2002 and the acquisition of Compaq by HP, which led to it losing a major source of revenues and[...]
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Mar 06, 2014, by Dominique Raviart
T-Systems' parent company, Deutsche Telekom, has announced its T-Systems 2015+ strategic plan. T-Systems 2015+ aims to increase the EBIT profitability of the company and help it resume organic growth by 2017.
Principles of T-Systems 2015+ rely on a change in it service portfolio mix:
Stopping of unprofitable offerings
Adoption of more standardized service offerings, which will[...]
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Feb 03, 2014, by Dominique Raviart
CSC and HCL Technologies have announced a strategic partnership for application modernization and IT cloud migration services.
The two companies are to:
Offer application modernization services around migrating applications to the cloud. The service will rely on several IPs, including the recently CSC-acquired ServiceMesh
Enhance their existing vertical-specific app modernization o[...]