IT cos on an acquisition spree of cloud tech firms By CIOReview India Team

IT cos on an acquisition spree of cloud tech firms

CIOReview India Team | Monday, 19 October 2020, 04:10 IST

Country's top software services companies are acquiring smaller technology firms to entend their cloud computing business, which has emerged as one of the biggest beneficiaries of businesses having to push activities online due to covid.

Complementing the existing expertise of larger companies such as Infosys Ltd, Wipro Ltd and Cognizant Technology Solutions Corp., these smaller specialized firms bring in ready talent and tech capabilities. This is also because the former have seen a spike in digital revenues, especially from cloud computing.

“Acquisitions are helping IT services companies jump-start and quickly bulk up their cloud capabilities to capture market share," said Nitin Bhatt, technology sector leader, EY India. “Building in-house capabilities would be time-consuming, and the opportunity cost would be too high. In addition, such acquisitions are helping infuse and grow the cloud DNA in areas that the legacy software companies have been lacking."

Infosys has already completed three cloud-related acquisitions this year. Starting March, Infosys acquired Simplus, a leading Salesforce consulting and advisory firm in the US and Australia, for an amount up to $250 million. Earlier in October, it acquired European cloud company GuideVision to strengthen its Cobalt portfolio, an umbrella offering for everything related to cloud, and one of its biggest organic investments in a short while. Infosys also stepped into a deal to buy digital customer experience firm Blue Acorn iCi for and amount up to $125 million.

August month saw Wipro Ltd making the acquisition of Belgium-based 4C, one of the largest Salesforce partners in the UK, Europe, and West Asia for €68 million ( ₹585 crore) to strengthen its cloud business. 4C has is now a consolidated part of Wipro’s Salesforce practice, which provides solutions globally around multiple Salesforce clouds and its ecosystem of products.

Earlier this month, a representative from Wipro said that the firm will buy Eximius Design for $80 million. Eximius Design provides solutions to build connected products in cloud, internet of things, 5G and artificial intelligence (AI).

Several more global tech firm are also betting on acquisitions to make their mark in the cloud space. IBM Corp’s $34-billion acquisition of Red Hat last year is the most significant one among them possibly, adding further its hybrid cloud agenda.