In November of the previous year, the United States Supreme Court declined to review an appeal made by Tata Consultancy Services (TCS) against a decision from a District Court in Wisconsin. This verdict involved punitive damages amounting to $140 million in a lawsuit initiated by Epic Systems, a prominent healthcare software firm. Epic had accused TCS of misappropriating its intellectual property while TCS was under contract to implement its software solutions.
Following this legal setback, Wipro, another leading Indian IT services company, took significant legal action against Mohd Haque, its former senior vice president and head of healthcare and medical devices for the Americas. This move occurred after Mr. Haque transitioned to Cognizant, prompting Wipro to seek a jury trial, alleging breaches of non-compete agreements regarding his employment with a direct competitor.
Despite the legal challenges, Indian IT firms are exhibiting notable growth within their healthcare sectors. For instance, Wipro reported a 7% year-on-year growth in its healthcare vertical during the first quarter of the fiscal year 2025, marking it as the only segment among its seven business units to achieve growth during this period.
Additionally, the competitive landscape is intensifying, as Wipro recently lost a significant contract with Takeda Pharmaceutical to Cognizant. This contract, valued at approximately $400 million and spanning a decade, was previously held by Wipro since 2014. The loss of this contract coincided with the departure of Wipro’s former finance chief, Jatin Dalal, to Cognizant, raising concerns over competitive attrition within the sector.
Moreover, Infosys is making strides in bolstering its life sciences division, with aspirations to increase its revenue from $700 million to $2 billion in the upcoming three years. As noted by Phil Fersht, CEO of HFS Research, while Infosys is experiencing steady growth, it faces formidable competition from established healthcare technology and consulting firms such as Accenture, EY, Cognizant, and Optum.
In June of this year, Tech Mahindra announced the merger of its subsidiary, Healthnxt Inc., with Tech Mahindra Americas, citing the complementary nature of the businesses. This consolidation is anticipated to yield synergies, optimize operational costs, and mitigate compliance risks.
Furthermore, HCLTech partnered with Olympus Corporation, a global leader in medical technology, to establish a research and development offshore center located in Hyderabad. This collaboration has been viewed positively by experts, recognizing it as a strategic move to capitalize on the current wave of global capability centers.
In conclusion, the Indian IT services industry, particularly in the healthcare vertical, is navigating through legal complexities while simultaneously striving for growth. As competition escalates, companies like Wipro, Infosys, Tech Mahindra, and HCLTech are seeking innovative strategies to enhance their market positions in the healthcare sector.
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