On Stable EBITDA: There are two ways to do business, either you can maximise your revenues or you can maximize your margins. You can't do both. We took a long-term view and that was to reinvest into the company and the business. Historically, IT services firms had a peak and then became irrelevant (says Coburn commenting on the margins of other IT firms). The way we measure our success is that we are growing faster than the market in terms of revenues. What we think is 19-20 per cent margin is stable and secure, as the lines between the lines between an Indian IT company and a MNC are blurring. I can't think of a time when our investors asked or questioned us on our business model.
On Cognizant's investment strategy: A vast majority of our investments are in people. Our investments have been in senior level industry experts. We also invest a lot in the relationship management with our clients. We invest a lot in people onsite who understand the business of our clients. The other investments are in building industry knowledge base and in new services lines. A lot of investment is also in building a strong consultancy capability.
On acquisitions: Our acquisition strategy is towards very targeted tuck-in small deals which are targeted towards geographic expansion, building industry expertise and lastly, to acquire technology and services capability. For example, our PIPC acquisition was a very targeted acquisition. PIPC has expertise in large program management capability. It also had geographic presence in the UK and Australia. It has helped us in getting large development projects. Our sweet spot is $20-80 million deals and at the upper end it is $200 million. It is far easier to integrate.
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