Polaris, Cognizant to expand Toronto operations

IT majors Cognizant Technology Services and Polaris Sofware Lab are looking at ramping up their Toronto operations as part of a strategy to use Canada as a near-shore option for clients in the US.

Both Cognizant and Polaris opened their Canadian centre recently to take advantage of "low cost of operations and access to a strong talent pool" in Toronto, officials said.

Polaris Software Lab Canada Inc, a subsidiary of Chennai-based Polaris Sofware Lab Limited, which has a small presence in Toronto, plans to expand the facility to tap the US markets, besides the huge market for banking software and financial services in Canada, Rahul Petkar, chief executive officer said.

"Canada offers us the near-shore option to service the US markets," he said.

A delegation from the Greater Toronto Marketing Alliance, which was here last week to promote Toronto as an investment destination for Indian companies, also held discussions with top officials of Cognizant to convince the company to increase the investment in its Canadian centre.

Nasdaq-listed Cognizant, which employs over 6,000 people at its facilities in Chennai, opened the Canadian Development Centre in December 2004.

"We see a growing need to provide IT services from the Canadian development centre that can leverage Cognizant's global delivery capabilities," said Lakshmi Narayanan, president and CEO, Cognizant.

Cognizant is planning to expand its operations in Toronto due to the region's "lower cost, low-risk environment, superior education and infrastructure levels,"  John Jung, vice-president (international marketing), Greater Toronto Marketing Alliance, said.

According to US-based consultants, Forrester Research, when compared to the US, Canadian firms spend a larger portion of their budgets on IT services. Forrester anticipates that Canadian companies will spend 50 per cent of their budgets on outsourcing than their US counterparts when final 2004 spending figures are reported.

Not surprisingly, all top Indian IT firms including TCS, Infosys Technologies, Satyam Computer Services, L&T Infotech, Patni Computer Systems, Datamatics and Aptech, also have set up operations in the Greater Toronto area.

Rahul Petkar of Polaris said that the company had the option to ramp-up the Canadian operations, as and when the business from the Toronto region grew. Currently, Ethernet Inc, an associate company of Polaris in the United States, where it has 25 per cent stake, is its only American presence.

"The objective of opening the Canadian subsidiary is that it can act as a near-shore option for Polaris to cater to the US market," he said.