The WITCH Report: 2018 Mid-Year Review
A review of the financial and market performance of global technology consulting firms in healthcare
H1 in review: Uptick in M&A, lower growth rates, steady margins, leadership exits
Our mid-year review of 11 publicly held global technology consulting firms indicates weak organic growth for most in the healthcare segment relative to their respective overall company growth rates, with Wipro being the most challenged in the group. The drag on overall growth and margins arising from the ill-timed HPS acquisition continues to be a problem for the firm. We have included a timeline of events pertaining to the HPS acquisition in the report. The recent departure of Wipro’s head of the healthcare business follows a series of quarters of low growth, and it remains to be seen what the next few quarters look like.
Among the WITCH Group companies, Cognizant remains the largest player in healthcare by revenues. However, HCL has shown the highest growth rates, outperforming the peer group as well as the overall company growth rate significantly. HCL has shown steady growth in healthcare overall in the past few quarters. HCL’s Mode 1, Mode 2, and Mode 3 strategy has seen the company shift in the direction of an IP-led business.
M&A activity continues to be robust with both tactical acquisitions and industry consolidation playing out. Cognizant’s acquisition of Bolder Healthcare, a revenue cycle management firm, is the latest in a series of healthcare-focused acquisitions for the company. We have included a timeline and analysis of Cognizant’s healthcare acquisitions in the report. Other notable transactions include HCL’s acquisition of C3i Solutions from Merck, Atos’ $3.4 billion acquisition of Syntel, DXC’s acquisition of Molina Medicaid Solutions, and Capgemini’s acquisition of LiquidHub.
Wipro, Infosys, and Atos have seen leadership departures with new heads yet to be named at the time of writing. Among the other large global firms, DXC seems to have gained significant traction in healthcare, based on reported transactions. IBM’s Watson Health business appears to be the most challenged, based on media reports.
The overall environment for the healthcare technology market demand seems to be holding up, based on the performance of the companies covered in this report. As the market for traditional services such as infrastructure management and outsourced applications support falls into decline, healthcare consulting firms are focusing on emerging opportunities in cloud, AI, automation, and digital with varying degrees of progress over the past few quarters. We have included detailed financial analysis in this report for all the major firms, and I encourage you to go through the report in detail.
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About the Report
This report is a summary of the financial and market performance of major global technology consulting firms, specifically in the healthcare segment. The focus of the report is on M&A activities, customer wins, partnerships, new product initiatives, and leadership announcements. The report is based entirely on publicly available information about the companies covered. For consistency, timelines are referred to in calendar quarters, though the fiscal year periods are different for the companies covered here.
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