The Hindu Business Line : Ties with EDS still hold potential, says Cognizant

The conditional open offer made by EDS for MphasiS BFL has turned the spotlight on an alliance forged by Nasdaq-listed Cognizant Technology Solutions with EDS last year. Responding to a questionnaire from Business Line, Mr Krish Venkat, Vice-President and General Manager, Cognizant EDS relationship, outlined how the EDS offer may alter this relationship.

How will the EDS-MphasiS deal, if it goes through, alter your strategic relationship with EDS?

We continue to see potential for the joint EDS-Cognizant offer. Cognizant and MphasiS are different organisations with differing capabilities. In some areas there is certainly overlap, but in other areas there isn't any. We, Cognizant and EDS, are very active in our partnership.

Will this deal turn out to be a Digital Equipment-HP kind of relationship, where MphasiS will be the in-house partner handling practically all the offshore deals in future?

EDS has been continually open with us about their need to provide global delivery solutions to their customers. We knew their strategy included multiple paths (pursued in parallel), including organic, acquisition and partnership approaches.

When we formed the alliance, we understood that EDS would probably pursue additional sourcing routes, so this would be in line with our expectations. Our partnership with them is mutually non-exclusive. Beyond this, we would not like to speculate on specific aspects of the structuring of offshoring.

With MphasiS coming into the picture, is there likelihood that application maintenance deals will be completely handled by them (in select verticals such as financial services or logistics), with EDS working with Cognizant only on application development part of the deal?

We continue to maintain that our relationship with EDS is an "incremental market opportunity" that helps us participate in long-term bundled outsourcing deals. Cognizant's alliance with EDS spans both application development and application management services.

Are you open, at this stage, to negotiating a three-way working relationship with EDS, if it mandates it at some stage?

Multi-sourcing is not only a market reality, but in many cases a customer preference. If we are able to deliver a number of synergistic capabilities under one client-management structure, it's a very attractive offer.