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Healthcare ITservices Q2 Report 2017

This quarter, we have included an analysis of the M&A transactions over the past year by the WITCH companies. The analysis provides some interesting insights into the valuation premiums paid and the impact on margins from the amortization of goodwill from these acquisitions. There is also a listing of transactions announced by the major companies in our report since Jan 1, 2017, for those interested in competitor activity.

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Confidential Damo Consulting 2017
THE WITCH REPORT
This report is an analysis of performance of
select companies in the healthcare technology
services space. The term WITCH refers to
Wipro, Infosys, TCS, Cognizant and HCL.
The focus of the report is on M&A activities,
customer wins, partnerships, new product
initiatives and leadership announcements.
For consistency, timelines are referred to in
calendar quarters, though the fiscal year
periods are different for the companies
covered here.
2Confidential Damo Consulting 2017
Technology services firms continued to face challenges last quarter in
the healthcare sector – some more so than others. Cognizant and HCL
posted strong results, Infosys turned the corner, and TCS maintained
consistent growth. Wipro lagged behind its peers, weighed down by
the performance of HPS, the 2016 acquisition that is now a troubled
asset. The recent resignation of Infosys CEO Vishal Sikka may create
some uncertainty in the near term for the company.
All the companies in our WITCH group, except Wipro, showed
healthcare business growth at a rate higher than the company as a
whole. Cognizant remains head and shoulders above the rest of the
pack and has made some interesting moves this quarter, specifically
the cloud-enablement of its Trizetto product portfolio. TCS has
become more horizontally focused, creating a new Business and
Technology Services group, ostensibly to offer the entire digital stack
of offerings as a fully orchestrated end-to-end service for clients in an
industry-agnostic manner.
Despite policy
uncertainty,
WITCH
companies grow
in healthcare
(except one)
3Confidential Damo Consulting 2017
Thematically, we see the following trends emerging:
4
“Digital” is a
major focus area: For
Cognizant and TCS, digital is clearly
driving margin growth. However, “digital”
seems like a catch-all term that includes
systems integration, cloud enablement,
analytics, and more. All the companies
we have covered have their own
definition of “digital”. There is
acknowledgment that pure “digital”
projects tend to be smaller and one-off,
with limited or no “run”
component
at the back end.
Automation
is gaining momentum.
Both Infosys and Wipro have
quantified the impact of
automation on FTE reduction.
Infosys has highlighted its
investments in AI technology,
specifically the
Nia platform.
Confidential Damo Consulting 2017
Regardless of
the type of business, deal
cycles seem to be getting
longer in the U.S., as enterprises
take their time to assess their
investment options in an
uncertain policy environment.
Large
outsourcing deals have become a
commodity. Application services at
the higher end of the value chain,
such as systems integration, is
driving growth for firms such as
Accenture. Other aspects include
legacy platform modernization and
digital enablement.
The infrastructure
management business (IMS) which
has driven a lot of the large deals
flow in the past couple of years may
be slowing down as clients review
their long-term options, especially in
the context of cloud migration.
Companies like HCL that have
traditionally been strong in the IMS
business could see some
uncertainty in the coming quarters.
This quarter, we have included an analysis of the M&A transactions over the
past year by the WITCH companies. The analysis provides some interesting
insights into the valuation premiums paid and the impact on margins from the
amortization of goodwill from these acquisitions.
 
There is also a listing of transactions announced by the major companies in
our report since Jan 1, 2017, for those interested in competitor activity.
 
Once again, our research team (the WITCH doctors) has put together a report
that provides deep insights into the state of the healthcare technology
services markets as well as the relative performance of the companies in our
coverage.
This is a valuable reference document for technology executives in
healthcare enterprises as well as technology solution providers with a
strategic focus on healthcare. Anyone with interest in healthcare and
technology services will find this extremely informative.
 
I invite you to share your comments and observations.
CEO, Damo Consulting Inc
Aug 22, 2017
5Confidential Damo Consulting 2017
Table
of
Contents
6Confidential Damo Consulting 2017
Wipro
Infosys
TCS
Cognizant
HCL
The WITCH companies
Others
Accenture
Atos
Capgemini
DXC Technology
IBM
NTT DATA
Persistent Systems
Tech Mahindra

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Healthcare ITservices Q2 Report 2017

  • 1. Confidential Damo Consulting 2017 THE WITCH REPORT
  • 2. This report is an analysis of performance of select companies in the healthcare technology services space. The term WITCH refers to Wipro, Infosys, TCS, Cognizant and HCL. The focus of the report is on M&A activities, customer wins, partnerships, new product initiatives and leadership announcements. For consistency, timelines are referred to in calendar quarters, though the fiscal year periods are different for the companies covered here. 2Confidential Damo Consulting 2017
  • 3. Technology services firms continued to face challenges last quarter in the healthcare sector – some more so than others. Cognizant and HCL posted strong results, Infosys turned the corner, and TCS maintained consistent growth. Wipro lagged behind its peers, weighed down by the performance of HPS, the 2016 acquisition that is now a troubled asset. The recent resignation of Infosys CEO Vishal Sikka may create some uncertainty in the near term for the company. All the companies in our WITCH group, except Wipro, showed healthcare business growth at a rate higher than the company as a whole. Cognizant remains head and shoulders above the rest of the pack and has made some interesting moves this quarter, specifically the cloud-enablement of its Trizetto product portfolio. TCS has become more horizontally focused, creating a new Business and Technology Services group, ostensibly to offer the entire digital stack of offerings as a fully orchestrated end-to-end service for clients in an industry-agnostic manner. Despite policy uncertainty, WITCH companies grow in healthcare (except one) 3Confidential Damo Consulting 2017
  • 4. Thematically, we see the following trends emerging: 4 “Digital” is a major focus area: For Cognizant and TCS, digital is clearly driving margin growth. However, “digital” seems like a catch-all term that includes systems integration, cloud enablement, analytics, and more. All the companies we have covered have their own definition of “digital”. There is acknowledgment that pure “digital” projects tend to be smaller and one-off, with limited or no “run” component at the back end. Automation is gaining momentum. Both Infosys and Wipro have quantified the impact of automation on FTE reduction. Infosys has highlighted its investments in AI technology, specifically the Nia platform. Confidential Damo Consulting 2017 Regardless of the type of business, deal cycles seem to be getting longer in the U.S., as enterprises take their time to assess their investment options in an uncertain policy environment. Large outsourcing deals have become a commodity. Application services at the higher end of the value chain, such as systems integration, is driving growth for firms such as Accenture. Other aspects include legacy platform modernization and digital enablement. The infrastructure management business (IMS) which has driven a lot of the large deals flow in the past couple of years may be slowing down as clients review their long-term options, especially in the context of cloud migration. Companies like HCL that have traditionally been strong in the IMS business could see some uncertainty in the coming quarters.
  • 5. This quarter, we have included an analysis of the M&A transactions over the past year by the WITCH companies. The analysis provides some interesting insights into the valuation premiums paid and the impact on margins from the amortization of goodwill from these acquisitions.   There is also a listing of transactions announced by the major companies in our report since Jan 1, 2017, for those interested in competitor activity.   Once again, our research team (the WITCH doctors) has put together a report that provides deep insights into the state of the healthcare technology services markets as well as the relative performance of the companies in our coverage. This is a valuable reference document for technology executives in healthcare enterprises as well as technology solution providers with a strategic focus on healthcare. Anyone with interest in healthcare and technology services will find this extremely informative.   I invite you to share your comments and observations. CEO, Damo Consulting Inc Aug 22, 2017 5Confidential Damo Consulting 2017
  • 6. Table of Contents 6Confidential Damo Consulting 2017 Wipro Infosys TCS Cognizant HCL The WITCH companies Others Accenture Atos Capgemini DXC Technology IBM NTT DATA Persistent Systems Tech Mahindra
  • 7. Glossary of terms CTS: Cognizant TCS: Tata Consultancy Services HLS : Healthcare and Life Sciences OM: Operating margin QoQ: quarter on quarter YoY: year on year 7Confidential Damo Consulting 2017
  • 8. The WITCH Group: Healthcare Financials * Operating margin is combined for HLS and insurance business Revenue Growth % Comparison Results for 3 month period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) HLS revenue % of company revenue HLS operating margin HLS revenue growth Company revenue growth 1972 292 14.80% 14.28% (3.04%) 0.82%Wipro 2651 175 6.60% 27.60%* 3.55% 3.19%Infosys 4591 325 6.80% N.A 4.70% 3.12%TCS 3670 1050 28.61% 32.67% 4.70% 3.50%CTS 1884 222 11.80% N.A 6.40% 3.69%HCL 8Confidential Damo Consulting 2017 3.69% 4.70% 4.70% HLS revenue growth Company revenue growth 3.12% 3.55% 3.50%0.82% 3.19% 3.04% Wipro Infosys TCS CTS HCL 8.00% 6.40% 4.00% 6.00% 2.00% 0.00% -2.00% -4.00% -
  • 9. Performance highlights Infosys, HCL and TCS have started the transition to new technologies. Investments in AI/automation. Apart from Wipro, all other companies have seen growth in healthcare last quarter. Healthcare growth outperforms company growth for most companies. Wipro continues to see a drag due the HPS business which has been impacted by the policy environment. ‘Digital revenues’ >10% and continuing to grow. All companies are investing heavily in retraining workforce on new technologies such analytics, artificial intelligence, data science, and digital security. 9Confidential Damo Consulting 2017
  • 10. The WITCH Group: The cost of acquisitions * This analysis is based on sample of 8 acquisitions in 2016 ** ‘Goodwill’ is the price which is paid in excess of ‘tangible/intangible’ value of the firm acquired Company Acquisitions since 2014 Average Goodwill ** % as part of acquisition price Least Goodwill Paid (% Goodwill to price) Highest Goodwill Paid % Goodwill to price) 4 77.64% Designit AS (62.24%) Wipro 3 67.30% Noah Consulting (12.40%) Geometric (57.77%) Acquisitions in 2016 * (58.14%) Appiro (86.48%) Panaya (77.11%) Trygstad Technical (85.52%) Trizetto (69.90%) Infosys 8 61.96% 3 68.85%CTS HCL All firms, except TCS, have completed significant acquisitions over the past few years. Based on information in the annual reports, we tracked Goodwill vs Purchase price paid, shown in the table. While there are differences in the nature of acquired businesses (such as IP vs non-IP based businesses), the amount of goodwill paid can potentially impact margins if revenue and margin growth do not match amortization costs. For example, Wipro’s acquisition of HPS has not yielded expected synergies due to the unexpected changes in the policy environment. Infosys has completely written off the carrying value of its investment in DWA Nova LLC ($11 M impact this quarter), and its acquisition costs for Panaya have raised questions about the high valuations. 10Confidential Damo Consulting 2017
  • 11. Revenue Guidance and Outlook Firm April 2017 FY18 revenue guidance June 2017 FY18 revenue guidance Comments Flat-2% Flat-1.50% There might be further risks arising out of HPS acquisition. Wipro 6.5%- 8.5% 6.5%-8.5% Revenue guidance is unchanged Company does not provide revenue guidance Only company in group to raise revenue guidance. Estimated $14.7-$14.84 billion for year. Infosys No guidance No guidance 8-10% 9-10%CTS Revenue guidance is at the higher end of peer group companies 10.5%-12.5% 10.5%-12.5%HCL TCS 11Confidential Damo Consulting 2017
  • 12. Wipro: Q2 2017 Performance and Highlights Significant de-growth in healthcare business impacting the core business growth in the U.S. The drag on margins from HPS may be yet to bottom out. HLS lags company growth significantly for past two qtrs. Company expects further negative impact (on healthcare business) during Q3 due to policy uncertainty, impacting client spend on IT investments related to exchange platforms such as HPS. In the near term, company is reskilling HPS staff and repurposing platform for adjacent use cases. Deployed over 2,000 instances of HOLMES automation tools across 175 customers, delivering productivity equivalent to about 12,000 FTE.Operating margin for healthcare business moves to negative territory. HLS growth lags peers. 12Confidential Damo Consulting 2017
  • 13. Revenue growth over last 4 quartersOperating margins – company and HLS Results for 3 months period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) Health- care % revenue HLS operating margin Health- care % revenue QoQ growth QoQ growth for company 1916 307 16.02% 15.49% 3.79% (.75%)Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 1903 304 16.00% 16.21% (0.50%) (0.70%) 1955 301 15.40% (0.05%) (1.00%) 2.73% 1972 292 14.80% 14.28% (3.00%) 0.87% Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 Healthcare % Revenue QoQ Growth QoQ Growth for company 6.00% 4.00% 2.00% 0.00% -2.00% -4.00% 13Confidential Damo Consulting 2017
  • 14. 14Confidential Damo Consulting 2017 Wipro: Q2 2017 Company Highlights Wipro Partners with and invests in Tricentis to deliver end-to-end hyper automation across quality lifecycle. Has joined the Enterprise Ethereum Alliance (EEA) as a founding member. EEA is a collaboration of enterprises to promote, develop and implement enterprise grade Ethereum-based blockchain applications across industries for specific business use cases. Opens innovation centre in Silicon Valley that will help the company develop new technologies and support its collaboration with startups in the region. Launches Big Data Analytics-as-a-Service solution on Microsoft Azure Data Discovery Platform that will enable businesses to bridge the gap between the insights required by business and the information that is available.
  • 15. Infosys: Q2 2017 Performance and Highlights Healthcare business recovers and operating margin stays steady. Ongoing pivot to new technologies. Revenue growth in healthcare has picked up with a positive growth rate for this quarter. QoQ growth has improved for company. HLS growth at 3.55% is slightly better than company growth at 3.20%. Operating margin has held steady in the last two quarters. Company has provided a slightly lower operating margin guidance of 23-25% in 2018. Successfully pivoting to new technologies: 8.3% of Q2 revenues came from new technology services initiated in last 2 years, and 1.6% of Q2 revenues was from new technology software products including Panaya and Skava. Revenue per FTE has improved for 6 quarters in a row. 3500 FTE worth of productivity gain through automation. 15Confidential Damo Consulting 2017
  • 16. Results for 3 months period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) Health- care % revenue HLS operating margin* Health- care % revenue QoQ growth QoQ growth for company 2587 173 6.70% 26.60% 1.76% 3.44%Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 2551 176 6.90% 28.92% 1.73% (1.39%) 2569 169 6.60% 27.64% (4.00%) 0.71% 2651 175 6.60% 27.60% 3.55% 3.19% * Operating margin is combined for HLS and insurance business Results for 3 months period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) Health- care % revenue HLS operating margin* Health- care % revenue QoQ growth QoQ growth for company 2587 173 6.70% 26.60% 1.76% 3.44%Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 2551 176 6.90% 28.92% 1.73% (1.39%) 2569 169 6.60% 27.64% (4.00%) 0.71% 2651 175 6.60% 27.60% 3.55% 3.19% Revenue growth over last 4 quartersOperating margins – company and HLS Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 Healthcare % Revenue QoQ Growth QoQ Growth for company 5.00% -5.00% 0.00% 16Confidential Damo Consulting 2017
  • 17. Infosys: Q2 2017 Company Highlights Infosys CEO Vishal Sikka resigns from the company (Aug 2017). Infosys Mana and its Robotic Process Automation (RPA) solution, AssistEdge together have amassed 50+ clients and 150+ engagements across all industry sectors, within a year of operations. Infosys appoints Inderpreet Sawhney as Group General Counsel, effective July 3, 2017. Mr. D. Sundaram appointed as an independent Director of the Company, effective July 14, 2017. Launched Infosys Nia, the next-generation Artificial Intelligence Platform. 17Confidential Damo Consulting 2017
  • 18. TCS: Q2 2017 Performance and Highlights Company successfully pivots on two themes Digital engagements constitute 18.9% of this quarter’s revenue (growth of 26% y-o-y). Analytics, cloud, IoT and automation gain more traction and reach critical mass. End to end digital transformation Healthcare and Lifesciences grew by over 4.7% this quarter (outperforming company growth at 3.12%), and by 14% y-o-y between 2016 and 2017. Company has a strong start to the fiscal year; digital business is driving growth Highlights 18Confidential Damo Consulting 2017
  • 19. Revenue growth over last 4 quartersOperating margins – company and HLS Results for 3 months period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) Health- care % revenue HLS operating margin Health- care % revenue QoQ growth QoQ growth for company 4374 332 7.60% N.A 4.40% 0.28%Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 4387 298* 6.80% N.A (2.11%) 0.30% 4452 307* 6.90% N.A 4.22% 1.48% 4591 325 7.10% N.A 4.70% 3.12% *Company recast their business segment numbers, hence the revenue ‘alone’ has been changed to reflect that. Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 Healthcare % Revenue QoQ Growth QoQ Growth for company 6.00% 2.00% 0.00% -2.00% -4.00% 4.00% 19Confidential Damo Consulting 2017
  • 20. TCS: Q2 2017 Company Highlights 20Confidential Damo Consulting 2017 To address the above imperative, creates new horizontal organization called the Business and Technology Services group, or BTS, headed by Krishnan Ramanujam. Appoints veteran Ravi Viswanathan as its global chief marketing officer. He will report to CEO Rajesh Gopinathan. Selected by a European food and health retail major to empower customers by using real-time spend analytics solution using Big Data technologies. Collaborates with Siemens around its IoT platform MindSphere. Implements a major organizational restructuring driven by two main imperatives – one, seamless orchestration of multiple services required to execute and implement end-to-end digital transformation; two, with the right leadership focus, digital service stack, such as, analytics, cloud, IoT and automation will gain significant scale in the coming years.
  • 21. CTS: Q2 2017 Performance and Highlights Strong quarterly results: Continues to be a leader in healthcare Performance has improved primarily due to: Operating profits increased as a percentage of revenues due to revenue growth outpacing headcount growth. Healthcare growth at 4.68% for the quarter is higher than company growth at 3.5% and has the highest margins among peer group. Benefited from pent-up demand from payers who were dormant in the previous quarters. Pivot to new technologies like AI (automation) and digitization, and making the transition from fee-based to value based engagements. Very positive outlook on Healthcare growth in Q3 and Q4. With TriZetto Cloud and TMG, the company is very well positioned to meet demands of healthcare providers. 21Confidential Damo Consulting 2017
  • 22. Revenue growth over last 4 quartersOperating margins – company and HLS Results for 3 months period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) Health- care % revenue HLS operating margin Health- care % revenue QoQ growth QoQ growth for company 3453 993 28.76% 31.62% 3.55% 2.49%Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 3462 1005 28.70% N.A 1.20% 0.26% 3546 1003 28.28% 27.21% (0.20%) 2.42% 3670 1050 28.61% 32.67% 4.68% 3.50% Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 Healthcare % Revenue QoQ Growth QoQ Growth for company 5.00% 4.00% 2.00% 1.00% 0.00% -1.00% 3.00% 22Confidential Damo Consulting 2017
  • 23. CTS: Q2 2017 Company Highlights 23Confidential Damo Consulting 2017 Cognizant to acquire Health Care Service Corporation's (HCSC) subsidiary TMG Health as part of the expansion of its strategic relationship with HCSC. TMG Health will enter into a new, expanded multi-year service agreement to continue providing information technology, business process and other services to HCSC's various operating units and subsidiaries. The transaction is expected to close in the third quarter of 2017, subject to the satisfaction of the closing conditions, including regulatory reviews. Moves TriZetto products to the Microsoft Azure cloud and launches TriZetto Healthcare Cloud Solution to help their 300 active TriZetto clients migrate from their on-premise software to the cloud. Collaborates with TransCelerate BioPharma Inc. to launch new Shared Investigator Platform (SIP) capabilities that make it easier for clinical trial researchers to access, share and analyze data. Joins Align BiopharmaTM to make it faster and easier for healthcare professionals to connect with the life sciences industry. Cognizant and Pivotal® announced a new joint initiative designed to accelerate the adoption of cloud applications and software platforms at enterprise scale.
  • 24. HCL: Q2 2017 Performance and Highlights QoQ growth at 6.8% and overall revenue growth at 11.8% puts it at the top of the league among peer group. Growth rates over the past couple of quarters has picked up and has outperformed company growth this quarter which is 3.69%. HCL is one of the best overall growth stories among peers 24Confidential Damo Consulting 2017
  • 25. Results for 3 months period ending June 30, 2017 Total revenue (in USD MM) HLS revenue (in USD MM) Health- care % revenue HLS operating margin Health- care % revenue QoQ growth QoQ growth for company 1722 217 12.60% 8.20% 1.89%Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 1745 215 12.40% N.A N.A N.A N.A (0.90%) 1.34% 1817 208 11.50% (2.80%) 4.12% 1884 222 11.80% 6.80% 3.69% Revenue growth over last 4 quartersOperating margins – company and HLS Sep 30,2016 Dec 31 2016 Mar 31 2017 Jun 30 2017 Healthcare % Revenue QoQ Growth QoQ Growth for company 10.00% 8.00% 6.00% 4.00% 2.00% -2.00% -4.00% 0.00% 25Confidential Damo Consulting 2017
  • 26. HCL: Q2 2017 Company Highlights For HCL, four of their key verticals that delivered sequential growth greater than 3%, life sciences is one. Company has indicated softness in the IMS business which could impact HLS business as well in coming quarters. Company has reported traction in new technology including cloud, IoT, Big Data and Cyber security. 26Confidential Damo Consulting 2017
  • 27. Q2 2017 Highlights – Other Key Players in Healthcare IT Services 27Confidential Damo Consulting 2017
  • 28. Launches its first innovation hub in Bengaluru to enable clients to experience innovation at scale through customized visits, design-thinking workshops, co-innovation workshops and cross-industry innovation Other Key Players in Healthcare IT Services – Financials commentary Healthcare & Public Service is around 18% of total revenue and the operating margin is between 12.75%-13.50%. Performance of Health & Public Service was ‘soft’ during the latest quarter (especially in US) and the primary reason is uncertainty around Affordable Care Act. Accenture IBM has seen several quarters of reducing revenues and margins as the company undertakes a strategic transformation. Gross margins have reduced from ~49% in 1st two quarters of 2016 to around 46% in 1st two quarters of 2017 IBM Revenue growth is around 7% over the past 4 years with operating margin between 6-7%. NTT Data DXC had declining revenues starting 2013 till 2016. It has made a couple of acquisitions in 2016, the impact of which should be felt in the current financial year. DXC Technology Public & Health constitutes ~28% of total revenue with operating margins under 10% ATOS Manufacturing, automobile and Life Sciences constitute 18-19% of total revenue with 10.50% operating margin Note: Net operating margin of all these companies is lesser than the WITCH group of companies. However, despite higher margins, the WITCH group of companies is spending money on share buybacks, raising questions about their long-term outlook for their core businesses and their ability/willingness to deploy cash for strategic acquisitions or other investments. Capgemini Company Financials summary 28Confidential Damo Consulting 2017
  • 29. H&PS came in lower than expected at 2% growth due to slower than expected decision making and initiation of new projects affected by continued uncertainty on healthcare legislation and state and federal budgets. These factors are expected to continue to impact H & PS business at least through the fourth quarter (Accenture fiscal ends Aug 31). Develops a new analytics platform to enhance the status and performance of clinical trials for the life sciences industry. To acquire Phase One Consulting Group, Inc. to enhance its Salesforce capabilities and client innovation in the cloud for federal market. Develops an AI-powered solution to help the visually impaired workforce around the world. Launches its first innovation hub in Bengaluru to enable clients to experience innovation at scale through customized visits, design-thinking workshops, co-innovation workshops and cross-industry innovation Collaborates with Roche to transform diabetes patient-care using data-driven analytics. Collaborates with BioCelerate to advance biopharmaceutical innovation through increased insights in R&D. Acquires Intrepid to help organizations create engaging mobile experiences for customers at speed and scale. Appoints Tracey T. Travis, CFO of The Estée Lauder Companies, to Board of Directors; hires Rafael López as a Managing Director in its Health and Public Service Practice. Acquires LabAnswer to provide clients with more comprehensive scientific informatics capabilities. Helping a global healthcare company embrace digital across its entire enterprise, using Accenture myWizard, an intelligence automation platform to improve application quality and productivity. 29Confidential Damo Consulting 2017
  • 30. Despite the Obamacare repeal effort and tax reform delays, Atos recorded the strongest commercial performance of the group in Q2 and outstanding book to bill close to 170%.  In the Infrastructure & Data Management practice, Atos witnessed growth primarily in the Public & Health sector, notably in North America, due to increase in volumes and additional scope from Oracle Exadata implementation for the Texas Department of Information Resources. Leveraging their technological offerings in Hybrid Cloud Orchestration, automation, cyber security and so on, Atos expects to have a stronger H1-H2. Launches its new-generation computing platforms to redefine the future of business critical computing and HPC. Collaborates with DELL EMC and Microsoft to launch Atos Canopy Orchestrated Hybrid Cloud for Microsoft Azure Stack. Launches world-first prescriptive Security Operations Center (SOC) that claims to thwarts attacks even before they happen. Launches fully-managed cloud solution powered by Apprenda to manage legacy and cloud-native applications and microservices. 30Confidential Damo Consulting 2017 Appoints Alexander Korogodsky as Vice President in the role of Global Head of Analytics within the Insights & Data Global Practice. Appoints Rosemary Stark as Global Sales Officer (GSO) reporting to Paul Hermelin, Chairman and CEO, Capgemini Group.
  • 31. Expands alliance with Amazon Web Services (AWS) to enterprise clients unlock the efficiencies and innovation of the cloud. Acquires Tribridge to solidify DXC’s position as a leading global systems integrator for Microsoft Dynamics. Collaborates with Mphasis to transform and modernize enterprise applications for the public, private and hybrid cloud.    Wins a large ServiceNow deal with a major healthcare company. Digital revenue grew 13.4% year-over-year in constant currency and on a similar basis our industry IP and BPS revenue was down 3.2% reflecting the completion of a large phase of our UK NHS contract in July of last year. DXC Technology has also wrapped up a significant completion of the NHS contract in UK which was the bulk of their revenue decline in previous quarters. The NHS contract was to deploy an Integrated electronic patient records system using CSC’s Lorenzo Regional Care software product on which there was a significant loss. 31Confidential Damo Consulting 2017 Appoints Shamlan Siddiqi as chief technology officer of the company’s public sector group. Partners with Praxify to provide enhanced clinical workflows to hospitals and health systems using MIRA technology (Athena Health has since acquired Praxify Technologies). Makes a strategic capital investment in leading enterprise NoSQL database provider, MarkLogic Corporation, to deliver integrated next generation database systems and business services worldwide.
  • 32. Watson Health witnessed strong growth, particularly in the areas of state and local government agencies and oncology. Watson Health’s analytics and social program management drove strong growth this quarter by helping clients make-informed decisions in reducing healthcare costs and outcomes. Watson Health Oncology is now in over 50 hospitals on five continents. 80% of the hospitals who have adopted Watson for oncology are outside of the U.S. MAP Health Management and IBM Watson Health partner to address the pervasive problem of relapse among Americans suffering from Substance Use Disorder. CipherHealth is using IBM Power Systems™ to run its technology platform that helps healthcare providers reduce re-admissions and improve the patient experience by providing effective patient engagement from pre-hospitalization through to post-discharge. Collaborates with Hackensack Meridian Health to combine Watson for Oncology with their real world data and help oncologists improve cancer treatment and reduce costs. 32Confidential Damo Consulting 2017 IBM GBS witnesses two consecutive quarters of signings growth, substantial improvements in the consulting backlog and a modest 20 basis point improvement in revenue performance. The growth is organic. IBM Watson Health deployments are going global as the first healthcare provider in Latin America deploys Watson for oncology, along with Baheal for genomics in China.
  • 33. Persistent acquires PARX , a Salesforce consulting company, to focus on its customers’ business models, strategic and operational objectives in the markets of Germany, Austria and Switzerland. Persistent and Attivio announce Engage 360 on the Salesforce AppExchange to help organizations improve customer service productivity and effectiveness with optimized turnaround on customer issues and cases, better mean time to resolution, faster agent onboarding and effective service supervision. 33Confidential Damo Consulting 2017 With acquisition of HCI Group, Tech Mahindra strengthens their position in healthcare provider space worldwide. HCI Group currently serves about 200 hospital relationships. The new clients from HCI Group acquisition are also seen as a huge BPO opportunity for Tech Mahindra.
  • 34. Company Name PATH Client Partnership NHS Scotland Enterprise Master Patient Index (eMPI) solution Nature of deal Jan-17 Mar-17 Texas Department of Family & Protective Services (DFPS) IMPACT (Information Management Protecting Adults and Children of Texas) system Mar-17 a European food and health retail major Real-time spend analytics solution Q1 2017 Santa Clara Family Health Plan  (SCFHP) Administration support Jan-17  TMG Health  (subsidiary of Health Care Services Corporation (HCSC)) Acquisition Jun-17 Siemens Partnership for industrial IOT Jun-17 Bodhtree Consulting Limited Partnership to offer GST solutions Jun-17 Jul-17 Tricentis Partnership for quality engineering Ramot Partnership for joint research in emerging technologies Announced Infosys Tata Consultancy Services Cognizant Wipro M&A, client wins, partnerships: Jan - June 2017 34Confidential Damo Consulting 2017
  • 35. Company Name LabAnswer Client Acquisition AcquisitionGenfour Acquisition Acquisition Altitude AcquisitionIntrepid Nature of deal Jun-17 Jun-17 Partner / service delivery University College London Hospitals (UCLH) NHS Foundation Trust Jan-17 Jun-17 Apr-17 Jan-17 Collaboration to provide RPABlue Prism Jan-17 Phase One Consulting Group Collaboration to develop a data-driven core analytics platform in diabetes Jul-17Roche Collaborate to Advance Biopharmaceutical Innovation Apr-17BioCelerate Announced Accenture Accenture AcquisitionIdean Feb-17 Feb-17 Capgemini AcquisitionTribridge Jul-17 Customer wina major healthcare company Application hosting, file storage, operations monitoring, data center support and cloud management Centers for Disease Control and Prevention  (CDC) Collaborates to expand cloud capabilities for Oracle Health FoundationOracle Q1 2017 DXC Technology NTT DATA Feb-17 PartnershipPraxify Apr-17 35Confidential Damo Consulting 2017
  • 36. Company Name Jupiter Medical Center  Client Use Watson for Oncology Partners for population engagementWelltok Blockchain technology Partners to predict heart failure Collaborates for breast cancer treatment the FDA Partners to bring genomics to ChinaBaheal Pharmaceutical Group Nature of deal Feb-17 Jun-17 Collaborates to combine Watson with Cota technologyHackensack Meridian Health Jun-17 May-17 Jan-17 Jan-17 Partners for licensing agreementMedyMatch Mar-17 Sutter Health Jun-17Novartis Partners to reduce substance abuse May-17 Map Health Management Announced TermTotal contract value IBM Partners to provide eye health through cognitive computingIDx, LLC Mar-17 Develop Watson-powered ‘virtual personal assistant’Arthritis Research UK Mar-17 Create a cognitive population health platformCentral New York Care Collaborative (CNYCC) Feb-17 Develop a cloud based service to improve the physician-pa- tient experience Atrius Health Feb-17 Mar-17 $110 5 4CollaborationPartners HealthCare May-17 PartnershipMulesoft Feb-17 AcquisitionPARX Jul-17 Tech Mahindra Persistent Systems 36Confidential Damo Consulting 2017 CJS Solutions Group LLC (The HCI Group)
  • 37. Arpita is responsible for managing thought leadership content initiatives at Damo and ensuring quality deliverables that answer consumer needs in healthcare. Report authors: The WITCH doctors Arpita Bose Das Content Operations Lead Bharath is a licensed Chartered Accountant from India and a Chartered Financial Analyst (USA). He is adept at financial analysis of Indian companies and global corporations. Bharath Natteri Research Lead Meera publishes corporate news and marketing trends across industries. Her international exposure enhances her attention to details and her capacity to understand many facets of research topics. Meera Gopalakrishnan Research Analyst 37Confidential Damo Consulting 2017
  • 38. ABOUT DAMO CONSULTING, INC. Damo Consulting is a healthcare growth advisory firm offering market growth strategy, content marketing solutions and thought leadership services to healthcare technology companies and enterprises. We offer research and market intelligence, and managed marketing services to help execute on growth strategies. 38Confidential Damo Consulting 2017
  • 39. Disclaimers The Healthcare IT Services Q1 2017 report is based mainly on secondary research. Damo Consulting therefore takes no responsibility for any incorrect information published by any company. No part of the report may be resold without written permission of Damo Consulting. All statements of fact, opinion, or analysis expressed in the report are those of the respective analysts. The information used and statements of fact made are not guarantees, warranties or representations as to their completeness or accuracy. Damo Consulting assumes no liabilities for any short term or long term decisions made by any clients based on analysis included in our reports. This report is not to be taken as investment advice. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them. The report was prepared independently. Damo Consulting did not accept any monetary or non-monetary compensation for consideration or mention in the report. 39Confidential Damo Consulting 2017
  • 40. Thank You Email : info@damoconsulting.net | Website : www.damoconsulting.net Damo Consulting Inc 1000 Jorie Blvd #200, Oak Brook, IL 60523 Phone : (630) 928-1111, Ext. 204 USA INDIA Mariam Center, 7M - 302, 3rd Floor, HRBR Layout, Bangalore - 560 043 Phone : +91 8064051999 CONFIDENTIAL. DAMO CONSULTING 2017 Damo Consulting is a healthcare growth advisory firm that works with healthcare enterprises and technology firms. We provide market growth strategies, thought leadership-led content marketing solutions, and managed marketing services. 40