Although the New Jersey-based company has since “evolved”, the development raised the question of whether more IT services companies acknowledge the rising competition among these internal technology centers. Technical analysts have previously pointed out the risk of the GCC, although IT companies themselves have rejected it.
“In addition, we face competition from our clients’ internal technical resources, such as the GCC, which may provide a lower cost alternative to our services,” Cognizant said in his annual report released on Friday. “We compete not only with other companies in the industry, but also with companies in other industries such as software services, engineering services and financial services companies, as well as customers’ GCCs.” Cognizant has three-quarters of its employees in India.
Cognitive and local IT services companies serve some of the largest companies, including Apple and Walmart, including application development and maintenance. But as technology becomes the core of the company, most Fortune 500 companies have moved to the country to establish their technology centers. In short, IT services no longer compete with each other, but with customers in business.
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When contacted, a cognitive spokesperson said: “We initially drafted this specific proxy language and evolved as the GCC… The GCC has been identified as a growth priority.” This refers to Cognizant’s March Investors Conference, where senior executives led by CEO S. Ravi Kumar outlined four-point strategies to increase profitability, increase market share, focus on large deals, and ensure revenue growth is consistent with the world’s four largest IT services companies from March 2027 to March 2027.
The rising trend of the GCC
Operations in India’s strategic hub, the GCC of senior foreign companies such as Microsoft, Amazon and JP Morgan Chase provides important support for its global operations. India is estimated to have about 1,700 GCC.
“GCCs have become a vital strategic tool for companies aiming to accelerate their business transformation and maximize long-term value in a rapidly evolving tech landscape, driven by advancements in AI…Over the past two years, GCCs have also emerged as key drivers for enterprises struggle to find the right talent to navigate fast-advancing technology ecosystems,” said the spokesperson, adding Cognizant has signed about 10 dealing with the GCC. “These partnerships strengthen our position as a trusted transformation partner and mark an important milestone in our growth.”
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Analysts and executives increasingly consider the growing threats of the GCC to domestic IT service companies, such as Tata Conservancy Services Ltd, Infosys Ltd and HCL Technologies Ltd., which dismissed the view that outsourcing companies and GCCs can compete and coexist.
“Cognizant calls the GCC a risk factor and reduces this risk through its GCC strategy, which now means IT service providers have incorporated the GCC into a part of their ecosystem,” said Viswanathan KS.
He added: “As more global enterprises build digital transformation capabilities, it is increasingly discovered that other IT service providers will follow suit. The GCC is increasingly being utilized by businesses, including mid-market companies, resulting in the growth of GCC operations, which adds risk to IT service providers’ revenues.”
According to industrial agency NASSCOM, GCC accounts for a quarter of India’s $282.6 billion IT industry in 2024.
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Gulf Cooperation Council Challenge
“Competition from companies eager for transformation (WIPRO, CTSH, TECHM, etc.), medium term (Coforge-Sabre Deal is an example), GCCS will bring headwinds to members.”
Cognizant’s comment is that most of the technical work can be done internally after some overseas customers recently exited the participation of IT outsourcers.
Transamerica, the U.S. arm of Dutch insurance company AEGON NV, terminated its mid-term 10-year engagement with Tata Consultancy Services Ltd. Transamerica reached a $2 billion deal with the country’s largest IT services company in 2018 to digitize its insurance business. The deal was cut for five and a half years after Transamerica decided to perform the mission itself in June 2023.
A newer example is the third largest HCL Technologies Ltd and Boston-Stardquarter Bank, State Street. The latter established a joint venture with HCLTECH with HCLTECH in 2012 to provide business operation services to customers. More than a decade later, State Street fully owned the joint venture as its focus shifted to a transformation that provided talent for most of its technical work.
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“The offshore platform portfolio is changing,” said Aveek Mukherjee, managing director of Gloplax Solutions, a consulting firm that sets up GCCS. “Customers are looking to look for certain features from their offshore platforms that make the typical GCC structure easier to implement. However, service providers have the opportunity to reevaluate their products to customers so that they can also implement the required features outside of the typical GCC structure. Therefore, service providers compete more than typical GCC structures, rather than GCC itself, but add gccee, but “Mukee.”
According to Nasscom, more than 875 or half of the country’s 1,700 GCC are located in Bangalore, while Hyderabad is 355. The rest are located in cities such as Delhi NCR, Pune and Chennai. NASSCOM estimates that by March 2030, the number of the GCC of India will reach 2,200 and the market size is US$105 billion.
When GCC collects Steam, IT outsourcers are setting up units to build and run GCC and build and run GCC under the Build-Operation-Transfer (Bot) model where they provide manpower to the parent company, find land and run captives, and run after a fixed time, transferring the business to the parent company.
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Infosys Ltd, Wipro Ltd and Tech Mahindra Ltd each set up separate business units to work with GCC. Accenture Plc, the world’s largest IT outsourcing company, has also invested in ANSR in stock. As part of this investment, Accenture sits on the board of directors of the consulting firm. ANSR establishes and operates GCC for multinational corporations and is the largest and oldest business in India.
Cognition ended in 2025 with revenue of $19.7 billion, up 4% per year. For Ravi Kumar, now a two-year term, turning the risk of the GCC into opportunities is one of the key tasks at hand, especially when raising questions about organic capabilities or ability not relying on acquisitions.
