Healthcare to be key driver for Cognizant

CHENNAI: Cognizant Technology Solutions expects healthcare segment to be a key driver of its business this year too, underscoring the increasingly important role new verticals play in growth of software sector. In fact, Cognizant's revenues from healthcare segment crossed Rs 1,000 crore last year, the first time for an IT player here and a signal that this seg-ment is gaining critical mass.

Traditionally, it is to financial services, telecommunications and manufacturing segments that the country's IT industry turned to for much of its revenues and growth. Over 70% of total software and services revenues or about $21 billion in FY2006 came from these three segments alone, according to Nasscom's strategic review docu-ment for this year.

For calendar 2006, Cognizant reported revenues of about $330 mil-lion, or Rs 1,450 crore, from healthcare and life-sciences segment. While the company's topline grew at 61% during this period (to $1.42 billion), the segment grew at 88%. Cognizant said the segment would be one of the key drivers of Cognizant's growth in 2007 as well.

The growth would be driven by growing demand for offshore IT serv-ices in the western markets even as pharma companies cut costs, con-solidate and forge tie-ups. Further demand would come from insur-ance firms and community hospitals, Ms K Vinayambika, vice-president, healthcare practice, said.

As the pipeline of blockbuster drugs is diminishing, there is greater focus on cost rationalisation, she said. Secondly, with rapid consolidation among pharma companies there is a clear need to consolidate their IT systems.