Appirio to be Wipro’s SaaS Weapon | Sherpas in Blue Shirts
Wipro’s acquisition of Indianapolis-based Appirio – which provides cloud consulting services and helps organizations move applications to the cloud – will help increase its portfolio in the SaaS market and highlights a change in Wipro’s strategy from traditional outsourcing provider to new age company, placing a long-term bet on digital transformation. It will also add further steam to the cloud race among top-tier IT service providers.
Appirio Fast Facts
Appirio was founded in 2006 and has received US$111.7 million in funding from investors including Fidelity Management, General Atlantic, GGV Capital, Salesforce, and Sequoia Capital. It has around 1,250 employees, offices in Dublin, Indianapolis, Jaipur, London, San Francisco, and Tokyo, and renowned logos as clients – Facebook, HomeDepot, Honeywell, NYSE, Sony Playstation, Starbucks, and Toyota, to name just a few.
What can Wipro aim to gain?
Strategic Partner for Salesforce Implementation – Salesforce implementation contributes the most revenue in Wipro’s SaaS implementation services, and Wipro is known for its complex transformation-led projects in the CRM space. The Appirio acquisition will further strengthen its position as a leading Salesforce consultant.
Cloud Transformation Expertise – Wipro will be able to consolidate its existing Salesforce and Workday cloud application practices to launch a new practice with a comprehensive suite of cloud services under the Appirio brand. The new brand, if marketed well, can bring an uptick in Wipro’s CRM market share.
Enhanced Customer Experience – Appirio has established its name in the market by delivering an exceptional customer experience to its clients. Wipro’s global delivery capabilities combined with Appirio’s customer focus can help cross-sell CRM services to its existing client base.
Improved Market Outlook – The acquisition will help Wipro marginally move towards its highly aspirational target to exceed US$15 billion in revenue by 2020. Wipro forecasted a muted outlook for the July-September 2016 quarter, and a posted 2.6 percent rise in revenue in the previous quarter. Appirio has been a strong competitor to the likes of Accenture and Deloitte, which have gained considerable share in the cloud market, and joining forces with
Wipro will help it achieve its vision.
Acquisition Strategy – Including the Appirio acquisition, Wipro has spent US$1.13 billion in the last year on buying companies. It acquired Denmark-based design firm DesignIT for US$95 million, German technology company Cellent for US $78 million, and U.S.-based technology firm HealthPlan Services for US$460 million. Wipro’s strategy to enhance its portfolio of services by acquiring niche startups, a clear departure from its previous strategy of fewer acquisitions, will get a boost from the Appirio purchase.
What should Wipro be careful about?
Topcoder Marketplace Integration – Appirio in 2013 bought Topcoder, a leading crowdsourcing marketplace it combined with CloudSpokes to create a community of 1,000,000 designers, developers, and data analytics experts. It will be interesting to see how Wipro is able to integrate Topcoder and align to the interests of those in the community who are usually averse to working with an IT service provider.
Reaping long-term synergies – As exhibited by many unsuccessful acquisitions in the industry, it is not easy to reap benefits and synergies from a strategy acquisition. It will be worth watching how Wipro is able to expand its digital transformation capabilities with the integration of Appirio into its cloud transformation practice.
Race for Cloud Consulting Acquisitions
While acquisitions in the CRM space have not been as profound as in the digital space, providers are increasingly acquiring their cloud companies and partners to promote their cloud first agenda:
- In September 2015, Accenture bought Cloud Sherpas, a leader in cloud advisory and technology services specializing in Google, Salesforce, and ServiceNow
- In April 2016, IBM bought Bluewolf, one of Salesforce’s top partners and a global leader in cloud consulting and implementation services
- In March 2016, IBM acquired Optevia, a U.K.-based SaaS system integrator that specializes in delivering solutions, specifically Microsoft Dynamics, to government entities
- In January 2016, Accenture acquired Netherlands-based CRMWaypoint , a company that specializes in Salesforce cloud solutions for sales, service, and marketing
- In January 2016, Capgemini acquired Oinio, a leading European Salesforce partner, to augment its capabilities in Salesforce solutions and platform across Europe and Asia
- In January 2016, Cognizant acquired KBACE Technologies, a global technology company specializing in cloud strategy and implementation, and a leading Oracle Cloud partner
- In September 2015, Microsoft purchased the key product and technology assets of its Dynamic CRM partner ADxstudio.
With the completion of this acquisition, what will the future hold for independent cloud consulting firms – and Appirio competitors – such as Acumen Solutions and Celigo? Will top IT service providers continue to quickly expand their capabilities through acquisitions, or instead make long term investments in reskilling their existing workforce? Only time will tell, but we’ll be sure to keep our eyes on this space.
