IT Giants To Acquire Small Company’s To Expand Cloud Business
By: Sneha Chaudhary
- Top IT Firms acquiring smaller technology firms to expand their cloud business.
- Companies emerged as one of the biggest beneficiaries.
- COVID-19 pushes businesses in “Online Activities.”
Top IT companies are acquiring smaller technology firms to expand their cloud computing sector, the firms have emerged as one of the biggest beneficiaries of businesses having to push activities online because of the COVID-19 crisis.
In addition to the current skills of large companies such as Infosys, Wipro, and Cognizant, which have seen an increase in the digital sales, especially from Cloud Computing, these smaller specialized companies bring in ready talent and technology capabilities.
“Acquisitions are enabling companies in IT services to jump-start and steadily expand their cloud capacities to capture market share,” said Nitin Bhatt, Chief of the Technology Industry, EY India. Developing in-house skills would take time, and the cost of the opportunity would be too high. Such acquisitions also help infuse and expand cloud DNA in areas absent from traditional tech firms”, he added.
This year, Infosys has already made 3 cloud-related acquisitions. In March, for up to $250 million, it purchased Simplus, a major Salesforce consultancy and advice company in the US and Australia. It bought the European cloud firm GuideVision earlier this month to boost its Cobalt portfolio, an umbrella offering for cloud-related items, and one of the largest organic acquisitions in recent years. It has entered into a contract for up to $125 million to acquire digital customer service company Blue Acorn iCi.
In the cloud space, major tech giants have also been banking on acquisitions to make their mark. The most critical one is the $34 billion purchase of Red Hat by IBM Corp last year to advance the hybrid cloud agenda.