The WITCH Monthly Monitor

Monthly update on major global IT consulting and services firms in healthcare

April 2019

IT consulting firms post mixed results for their healthcare segment in the March quarter

Wipro, Infosys, TCS, Cognizant, Atos, Capgemini, and IBM reported the results for the quarter ended March 31, 2019. Healthcare and life sciences (HLS) growth for Infosys remained flat, while TCS reported double-digit growth rate with several client wins for their drug development platform. Wipro announced at least four healthcare client wins in the last three quarters, and expects these inclusions to positively reflect in the second half of this year. Cognizant reported decline in healthcare revenue due to “industry consolidation and increasing movement of work to a captive at a large North American client”. Atos’ Public and Health segment revenue growth was flat.

In the last month, Wipro was a victim of advanced phishing campaigns which compromised their employees’ email accounts. The hackers also targeted seven other technology providers including Capgemini, Cognizant, and Infosys. Early April, TCS was in talks to resolve pending cases filed against the company. However now they are facing another lawsuit by Computer Services Corp (CSC) for alleged theft of trade secrets. This is the second such suit for TCS after the 2014 Epic case. HCL also faced a lawsuit for hiring bias in the U.S. by the law firm Kotchen & Low. This law firm is also responsible for similar suits against other top-tier Indian IT companies in the past. IBM Watson’s decision to stop sales of its Drug Discovery program reflects another impediment in Watson’s effort in various areas of healthcare. Since Watson’s foray into the healthcare industry, several products received strong criticism as they failed to meet customer expectations and their current NLP technology struggle to make sense of complex medical information and match a human doctor’s comprehension and insight.

NTT data expanded its footprint in the public healthcare industry with the acquisition of Cognasante Consulting. Accenture and HCL, each inaugurated a new center for cybersecurity in Texas.


Results for the Quarter and Year ended March 31, 2019 for Wipro

Wipro’s healthcare segment contributed revenue of $274 million with 2.2% QoQ growth for this quarter, on a better growth trajectory compared to declining revenue from past quarters.

Device Authority Launches Partnership with Wipro to Deliver Next Generation Identity Access and Security for the Internet of Medical Things (IoMT)

Wipro partnered with Device Authority to deliver a secure and compliant IoMT solution for a large multinational healthcare company to launch a remote patient monitoring service. Device Authority is a provider of Identity and Access Management (IAM) for IoT focused on the healthcare industry.

Breaking Down The Wipro Breach — And What It Means For Supply Chain Security

Wipro faced an advanced phishing campaign on its IT system which was used to launch attacks targeting at least a dozen client systems, reportedly focused on perpetrating gift card fraud.The hackers also targeted other competing providers including Avanade, Capgemini, Cognizant, Infosys, PCM, Rackspace, and Slalom.

Indian Firm Wipro Ltd. Sues State of Nebraska for $15.5M Following Canceled Contract

Wipro sued the state of Nebraska after the government canceled an $84 million Medicaid eligibility and enrollment system upgrade contract in December 2018 claiming that the state failed to pay $15.5 million for work done before the project was halted.


Second consecutive quarter of double digit growth in constant currency for Infosys

Infosys reported revenue of $3,060 million with a growth of 11.7% YoY for the quarter ended March 31, 2019. Life sciences revenue for the fiscal year was $743 million and $183 million for this quarter, the growth in the segment remained flat as clients face slow growth and increased cost pressures.

H-1B denials behind attrition, says Infy

Infosys recorded an all-time high attrition rate of 18% for the quarter ended March 31, 2019 partly due to falling H-1B visa approvals as the company faced the most visa rejections (2,042) in 2018 compared to TCS, Wipro, Tech Mahindra, and HCL Tech. The company is taking measures such as milestone-based increments and incentives tied to digital skill certifications to contain the attrition rates.

Intel consolidates IT operations with Infosys, lays off US employees

Intel layed off several hundred IT workers in the U.S. and Costa Rica as part of a move to consolidate its IT operations under Infosys as a single contractor. The layoffs were more focused on simplifying the way Intel handles internal technical systems than as a cost-cutting measure.


Strong order book and double digit growth mark stand-out year for TCS

TCS reported revenue of $5,397 million and growth of 12% YoY for the quarter ended March 31, 2019. Healthcare and life sciences accounted for 7.7% ($415.6 million) of the total revenue, up 18.2% YoY and its Advanced Drug Development platform had seven new wins and two go-lives in the fiscal year.

Rival accuses TCS of misappropriating its code, files suit

CSC (DXC technology) filed a lawsuit against TCS for alleged theft of CSC’s source code and its proprietary product to develop an insurance platform for TransAmerica, following a billion dollar deal that TCS won from TransAmerica.

TCS looks to settle US discrimination suits by ex-staffers

TCS to settle discrimination suits filed by some former employees in the U.S. which could resolve three pending cases and other charges made against TCS. The settlement comes after the jury had ruled in favor of TCS in November 2018 over a class action lawsuit filed by three former employees. They alleged TCS of discrimination against non-South Asian workers in the U.S.


Cognizant Reports First Quarter 2019 Results

Healthcare and life sciences business accounted for 28.3% ($1,165 million) of the revenue and declined 3.2% from the preceding quarter owing to “industry consolidation and increased movement of work to a captive at a large North American client”.

Cognizant digitally transforms the clinical trial protocol process

Cognizant launched Cognizant Protocol Creator, a SaaS collaboration product that uses automation and AI to digitally transform the clinical trial protocol process. The new protocol creator enables clinical teams to collaborate and simplify the production of protocol documents that adhere to industry standards and best practices.


It’s HCL’s turn to face a suit for alleged hiring bias in US

Law firm Kotchen & Low filed a class-action lawsuit against HCL Technologies for discrimination in its hiring practices. They alleged that the company failed to hire Gregory Handloser for a sales position and instead hired an Indian candidate. In the past, the law firm also filed cases against top-tier Indian IT companies, including Infosys, Wipro, Cognizant, Tech Mahindra, and TCS.

HCL technologies expands U.S. operations with new cybersecurity center

HCL Technologies launched CyberSecurity Fusion Center (CSFC) in Frisco, Texas to support secure business growth. The new center will provide customers a single point of contact for complete security incident lifecycle support from detection to remediation. It is equipped with more than 3500 certified analysts with the experience of managing more than 2000 global clients using integrated Cyberthreat intelligence for better and faster detection and remediation of security incidents.


Accenture Opens Federal Cyber Center in San Antonio

The company launched the Accenture Federal Services (AFS) Cyber Center in San Antonio that provides cybersecurity capabilities on an as-a-service basis to help government agencies identify and eliminate cyber threats. Accenture currently employs more than 1,300 people at its two primary locations in San Antonio. The company also plans to invest $5 million and add 500 full-time jobs over the next four years in San Antonio.


First quarter of 2019: A good start to the year for Atos

Atos reported revenue of $3201 million (€2818 million) for the quarter ended March 31, 2019. The Public & Health segment contributed revenue of $967 million (€851 million) and the YoY growth remained flat.


Capgemini: revenue growth of 6.7% in Q1 2019

Capgemini recorded revenue of $3,908 million (€3441 million), up 6.7% YoY at constant exchange rates for the quarter ended March 31, 2019. No update on the healthcare business.


Deloitte and Google Cloud Announce Plans to Collaborate on Transformative Solutions for the Health Care, Finance and Retail Sectors

Deloitte and Google Cloud plan to develop solutions and services for healthcare and life sciences to provide infrastructure for AI and data analytics.


IBM Reports 2019 First-Quarter Results

IBM reported revenue of $18.2 billion with a decline of 4.7% YoY for the quarter ended March 31, 2019 which marks the third consecutive quarter of declining YoY revenue. Cloud & Cognitive Software and Global Technology Services witnessed a decline of 2% and 7% respectively while the Global Business Services, remained flat.

IBM to wind down Watson’s work in AI-based drug discovery

IBM halted new sales of it’s Watson programs, aimed at AI-based drug discovery and development, due to poor financial returns. The company will continue serving its existing customers. However, IBM is re-focusing on Watson Health for clinical trials where there is a greater market need for its data and AI capabilities.

Centerbridge Partners to Acquire IBM’s Marketing Platform and Commerce Software Offerings to Form Standalone Marketing and Advertising Technology Company

Centerbridge Partners acquired IBM’s marketing platform and commerce software offerings and intends to form a standalone company that will deliver a comprehensive portfolio of solutions across marketing and advertising. In December 2018, IBM divested its collaboration and on-premise marketing and commerce software products to HCL. The divestiture reflects IBM’s ongoing commitment to streamline financial management and prioritize investment due to declining revenue from these products.

NTT Data

NTT DATA Services to Acquire State Healthcare Consulting Practice from Cognosante

NTT DATA Services acquired Cognosante Consulting, LLC, a provider of health IT solutions and services for federal and state health agencies. The acquisition provides NTT DATA Services access to 250 consulting resources and intellectual property supporting IT transformations specific to Medicaid in 20+ states.

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