The IT firm is poised to grab significant market share in 2011
Capgemini returned to growth in the second half of 2010 and anticipates as much as 10 percent growth in 2011. The firm's consulting business remained so strong that it held fees steady throughout 2010 and even "increased [rates] slightly towards the year-end," the firm announced to shareholders last month. Future growth seems to be coming from multiple channels, explains Lanny Cohen, the firm's North America CEO.
Consulting: Is the growth you're experiencing just pent-up demand or is this the beginning of a new growth curve?
Cohen: That's the $64,000 question. We had a very strong second half of 2010, especially in the fourth quarter. We definitely saw, and are seeing, a pickup in the market. Our view is one of continued cautious optimism. We do not foresee a massive uptick or a significant downturn; we see steadiness and stabilization. We suspect it will be a trend line heading in a positive direction, but it's not a steep curve.
Consulting: Where do you see the biggest growth?
Cohen: Overall, in the second half of last year we saw widespread positive performance. All regions returned to growth in the second half of last year, with especially strong growth in the U.K. and Ireland. Our financial services global practice had very strong growth. North America also saw some very strong growth fueled significantly by financial services and systems integration work. The consumer products/retail group in North America was one of our fastest growing verticals; public sector was probably the strongest industry practice. Even the Benelux countries did well in the fourth quarter.
Consulting: What's the latest driver of growth in financial services?
Cohen: Certainly the regulatory environment is fueling the current impetus. There's a lot out there under the regulatory umbrella, including security and privacy engagements.
Consulting: What do you think accounts for your firm's success in capturing this new demand?
Cohen: There are a number of factors, but I think part of the answer is that our 'right shore' approach is giving us flexibility on pricing. When clients had lower budgets or needed higher ROIs, our offshore capability made us better able to meet their needs. We saw this being a big factor in our systems integration practice, our retail vertical—especially on the West Coast, and we saw the same thing play out in life sciences and financial services.
Consulting: Can you keep up this pace in 2011?
Cohen: Certainly we're expecting the public sector to be impacted. We won't have the growth there we'd hoped because of budget issues at the U.S. federal level. But generally, we think we have the right service mix. We're seeing more interest in cloud-based opportunities, and we think software-as-a-service will fuel more growth, as well as core ERP, business intelligence and analytics.
Consulting: Of all the providers of those services, why do you think you're attracting greater market share?
Cohen: First, we think our business mix is very important. We're constantly re-evaluating our portfolio to make sure that our mix of offerings is properly aligned with market needs. Second, we think we're emerging as a preferred alternative to both the big Western Players and to the pure-Indian players. Third, we believe our operating style also differentiates us. We're at the far end of the collaboration spectrum—we really go to market in a team oriented way.
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