In observing the global services industry players in recent weeks, I was amazed at how much frenetic activity India’s providers undertook in joint ventures and acquisitions in Q4 2014. What does all this noise signify? Change is coming.
There are signs that let us know seasonal changes are coming. Before winter arrives, we see its signs in leaves changing colors, birds migrating south and days getting shorter. One of the signs of change coming in the services industry is when incumbent providers go on an acquisition and alliance spree.
Let me highlight just some of the spree of activity in the past few months.
- Acquired TriZetto, a healthcare software vendor
- Acquired Odecee, providing digital solutions to enterprises in Australia and New Zealand
- Created an alliance with Top Image Systems to increase its automation capabilities in F&A
- Undertaking a significant shift in its M&A strategy. After completing only five acquisitions since its inception, Infosys recently aggressively bid on Trizetto, but lost to Cognizant. And it’s considering several strategic acquisitions with annual revenue of $600-$700 million.
- Partnering with DreamWorks animation
- Partnering with Tableau Software for big data, visualization and business intelligence solutions
- Tech Mahindra
- Acquired Lightbridge Communications, a telecom network engineering service provider
- Extended partnership with Red Hat for open hybrid cloud solutions
And it isn’t just the Indian providers who are on a spree. Examples:
- Acquire BPO acquired Shore Solutions in the Philippines
- Capgemini is partnering with NetSuite to provide a scalable cloud-based back-office solution and is also partnering with Adaptra to provide insurance industry solutions in Australia
- Citigroup is setting up its own IT arm in India
- IBM agreed to acquire Lufthansa’s IT infrastructure unit
Individually, none of these events is particularly important, just as one duck flying south isn’t important. But when the sky is full of ducks, you can be pretty sure the season is changing.
Collectively, this spree of activity, especially by the Indian service providers, is an indication that the services industry is at an inflection point. Change is brewing and the providers are attempting to position themselves for the change.
Photo credit: U.S. Fish and Wildlife Service Headquarters