Wipro acquires Appirio – Further consolidates the Salesforce Solutions Market

According to capioIT, the acquisition of Appirio was when not if. Wipro considerably boosts capability in the as a service ecosystem, particularly in Salesforce.

On October 20th, 2016 Wipro and Appirio made the joint announcement that Wipro had acquired Appirio for approximately US$500M. Appirio was privately held, and the deal will likely close in December. It is the largest acquisition undertaken by Wipro. The deal provides Wipro with significant scale and capability in the as-a-service market, particularly in the fundamentally critical Salesforce and Workday solution marketplaces.

In short, the acquisition of Appirio comes as no surprise. capioIT has covered the Salesforce solutions market extensively. Before Dreamforce in 2015, the Salesforce market was unique whereby three of the top five vendors, as ranked by capioIT, were non-traditional SI’s and born in the as-a-service ecosystem. Now all three have been acquired, Cloud Sherpas by Accenture, Bluewolf by IBM and Appirio by Wipro. While Appirio had been very public in its desire to maintain independence, the knocking of the bankers clearly became too loud. Usually, everyone has a price.

The capability of Appirio and Wipro was recently ranked and assessed by capioIT. In September 2016 capioIT released capioIT Salesforce Services and Solutions Capture Share report – https://capioit.wordpress.com/2016/09/13/do-we-have-business-as-usual-in-the-salesforce-services-and-solution/. In this report Appirio was a leader, ranked in the market makers category, and 5th overall of the 14 vendors included in the study. By contrast, Wipro was a laggard, ranked at number 13. This fact alone sums up why this deal matters so much for Wipro and their strategic future.
The deal that is closest to this one is the Bluewolf IBM deal. There are three critical reasons for this
1. Before the deal, Wipro was a laggard in the Salesforce services ecosystem. The acquisition allows it to leapfrog to a leadership position (assuming it can properly maintain the capabilities, human, process and technology of Appirio). IBM was in the same position before the acquisition of Bluewolf.
2. Wipro will gain considerably regarding the number of certified consultants for Salesforce and Workday. This scale is critical. The firm had struggled in this respect. The joint capability brings the number of certified consultants much closer to the Deloitte, IBM capability, albeit far behind the runaway leader of Accenture. Again, this is similar to what was faced by IBM.
3. The existing Wipro Salesforce and related SaaS solutions will fold into Appirio. It appears that the brand will remain. Maintenance of the brand will create a similar outcome to the Bluewolf an IBM company branding. This is critical due to the relative strength of Appirio vs. Wipro in this market.

Clearly, capioIT is optimistic about this deal, with the usual caveat about the execution of the cultural and process integration. Wipro, as with most of the Indian vendors has been conservative about acquisitions, so it’s hard to predict how this will be delivered. Wipro is an expert at onboarding, so the transition should be smooth.

The deal should be a concern for many of the legacy SI vendors who just have not had a scale in the market. Tata Consultancy Services, Infosys, Cognizant, CapGemini, HCL, CSC/HP and Fujitsu amongst others are all subscale in the marketplace. Furthermore, according to the results of the Capture Share report for Salesforce Solutions and Services providers, these vendors all lag the overall market capability. Some such as HCL and Fujitsu lag considerably.

They will struggle to keep up with the growth in the SaaS, and of course, Salesforce/Workday ecosystem, maintain a special relationship with the vendors and clients when they just do not have the scale or model. Excellence in the SaaS Solutions market is not about Offshoring; it is about building assets and scalable solutions. These vendors face the challenge of having to organically grow scale in a market that is rapidly maturing but has significant issues with the supply and availability of skills and talent.

Focus Point
The acquisition of Appirio was a matter of timing. Wipro should be pleased with the capability they acquired. Appirio was a proven disrupter in the market. Wipro can now look to consolidate and be positioned for leadership in the marketplace. The challenge now lies to the vendors who are as yet subscale in the ecosystem to somehow leapfrog to the leadership opportunity that is now in the sight of Wipro.

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Do we have Business as usual in the Salesforce Services and Solution Market?

Recently capioIT released the 2016 Global Salesforce Services and Solutions Market Capture Share Report highlighting leadership in this market. Here is further insight on the maturity of the market. capioIT Capture Share Report

Salesforce has fundamentally altered the software and broader enterprise IT market. It increased focus upon, and measurement of, business outcomes of technology, transformed software delivery models and forced stagnant competitors to attempt, largely unsuccessfully, to re-engineer their business. It has continually innovated and is a leader in multiple markets that extend beyond the initial cloud-based CRM revolution that first brought it fame.

Despite this, in the early history of Salesforce, the solution market largely underperformed. There were several reasons for this.

Firstly, the concept of SaaS was new, at least in the sense of being a successful business strategy, particularly in light of the ASP collapses. The marketing and sales pitch of Salesforce was that acquisition was a simple credit card transaction. This worked brilliantly to drive volume but made most buyers incorrectly believe that the requirement for integration, data governance and related services would be inconsequential. Not surprisingly, the ease of the model made many organisations take the view that Salesforce could be deployed at 100% of capability without IT involvement, or tellingly, even being aware. Unfortunately for all, this was incorrect. The outcomes of this are still being managed.

Consequently, requirements for services and integration accelerated with the increased enterprise demand. Slowly an independent services ecosystem was developed, firstly with small local providers, before the increasing enterprise corporatisation of the market to the current state, where the market is dominated by the usual suspects for application services and solution providers that largely, with some key exceptions, mirrors Oracle, SAP and Microsoft.

Now the market is closer to maturity, the key constraint for the Salesforce market is quite simple. It is the constriction of available resources in the marketplace in numbers, focus and geography. Salesforce simply will not grow without partner growth in numbers and scale. To help arrest this, Salesforce has made considerable investments in this critical aspect of their business. The Trailhead investments have been exceptional and act as an essential component linking IT and business users of the Salesforce portfolio.

The following factors have driven the demand for the growth of Salesforce solutions.

For the Salesforce users key drivers of growth in Salesforce solutions include:

  • The realisation that Salesforce is an enterprise tool, and needs time and money to integrate.
  • Skills in Salesforce are difficult to hire, let alone retain.
  • Cost of labour is high at a global and regional level
  • Increased appreciation of the depth of relationship that external providers have with Salesforce
  • Strategic understanding of the focus of competitive differentiation that Salesforce can provide if executed to the potential of the product.

From the vendor or supply side perspective, there have been considerable changes. These include:

  • Increase skills of offshore service delivery quality and scale
  • The requirement to provide a more globalised capability and level of service
  • Investment required to align the growth of Salesforce and extension of the Salesforce offering portfolio
  • Development of IP-based repeatable assets for Salesforce deployment
  • Tighter integration of technology and business capabilities and client requirements
  • Increased skills to identify industry specific requirements

Capture Point 

The Salesforce market has matured rapidly. This has happened at both the supply and demand perspective for the investment. The maturation will come when the business itself is more fully realised, but the rapid maturity will continue. As Salesforce is more embedded into the enterprise, it will continue to be mission critical, the solution provider ecosystem will grow around this reinforcing the dynamic market nature.

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capioIT Identifies Leadership in the Global Salesforce Services and Solutions Market


Salesforce continues to be a global market changer. It effectively created the SaaS market, killed the legacy monolith of Siebel, and created one of the strongest and most loyal communities in the enterprise technology ecosystem. This is best represented through the venerated annual Dreamforce event.

Undoubtedly the services market for Salesforce is as mature as the Salesforce product offering and capability. Both are successful, but neither is close to a fully mature functionality. This is both positive and negative. Salesforce is growing at an accelerated pace, both as an expanding business, and as a partner opportunity. The challenge for many partners is to focus on their core differentiation and to maintain and enhance synchronisation with Salesforce growth avenues.

The differentiated aspect of the global Salesforce services and solutions market (until Dreamforce 2015) was the pre-eminent emergence of independent vendors. Cloud Sherpas, Bluewolf and Appirio were all ranked by capioIT as amongst the top five vendors in the equivalent report for 2014. Fast forward to 2016, at the time of publishing, only Appirio remains an independent entity. Accenture acquired Cloud Sherpas in September 2015, and IBM accelerated a lagging Salesforce capability with the Bluewolf acquisition in early 2016.

Accenture has clear leadership in the market. This leadership has been achieved through a long-term vision for the current and future requirements of Salesforce clients and enabled with organic and inorganic investment. In the strongest measure of Accenture market dominance, Accenture has approximately three times more certified consultants than any other provider. This Accenture success and capability is critical for client engagement, but also enabling it to have proportional influence with Salesforce in managing and developing the future direction of the technology and platform.

capioIT included 13 vendors in the study. This is a similar number of vendors included in the 2014 study and is reflective of the consolidation but slow emergence of new providers. What is of note is the highly tiered nature to the partnering environment for Salesforce. Both the market and Salesforce must do more to establish a solid tier of mid-sized solution providers. This will come through acquisitions and mergers, and is critical if the solution capability is to mirror that of SAP and Oracle in terms of scope and influence. It is particularly relevant for the emerging markets for Salesforce. Salesforce cannot grow geographically without partners to support and enable.

The following vendors were included in the analysis:

  • Accenture
  • Acumen Solutions
  • Appirio
  • Bluewolf (an IBM Company)
  • Capgemini
  • Cognizant
  • Deloitte
  • Fujitsu
  • HCL
  • Infosys
  • NTT Data
  • PwC
  • TCS
  • Wipro

Capture Share reports are based on the analysis of 17 key capabilities and attributes of services providers. These attributes are focused in two key areas, Transform and Leverage. 

In order to undertake the appropriate level of analysis and data integrity, the individual attributes are weighted in percentage terms on the basis of the overall influence for the Transform and Leverage capabilities.




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Is Innovation, not Invention the Missing Link for Google Enterprise?


Google is one of the great corporate success stories. It has redefined markets and destroyed incumbent providers in both the online and offline world. Just ask the yellow paper weight company, Yellow Pages what it can do.

It has invented a wide range of products and services. It is at the top of the tree for disruption. It has disappointed at the enterprise level. When compared with the other market leaders for innovation in the enterprise. Microsoft, Apple, Salesforce and AWS it has failed to come close to applying the dominance in our personal lives to that in our business life. This delay has had widespread implications of missed opportunities. It has helped create AWS, led to a partially revitalized Microsoft and has kept the door open for Facebook to become an enterprise provider of great potential (albeit, potential is the key word).

There are many reasons for this, from being a laggard to markets, failure to define the Chinese opportunity (it is not alone here), allowing a too rapid migration back to Microsoft for productivity suites, and others.

Another perspective is important when considering why Google has lagged. That is the focus on invention not innovation. CEO’s hate folly, they hate wasted investments. They love innovation and improving the bottom line with predictability and stability.

Microsoft, Salesforce and others are innovators in the enterprise space. They borrow, enhance and optimize technology, usually at an accelerated rate, to drive new customer offerings. They do not tend to chase folly. (This point could be argued for Microsoft to be fair, just consider Skype and LinkedIn).

Google on the other hand is an inventor. It is outstanding at this. It invents for Google and assumes that society will follow. Consumers do, enterprises less so.

It has a unique lab and R&D model that drives invention as the focus. The downside of this is that this comes with a fail fast approach. Fail fast is a great approach for lab-based products and for services that fail to win. It does not work for enterprises that have long investment windows and requirements for economic models that enable incremental improvement, not loss of investment.

A classic example of Google inventing for itself was the selection of Taiwan as a data centre location in 2014 for the needs of Asian enterprises. The data centre was brilliant, the POE was exceptional and it was a environmentally efficient as possible. So all the boxes ticked for Google. The only problem was it could not be in a worse location in Asia. No-one outside of Taiwan wants a data centre in Taiwan. The folly of the location undermined the potential brilliance of the location. Now Google is still playing data centre catch up in Asia.

It is possible that the new Google structure with Alphabet will overcome some of these issues and allow for longer term investments in enterprise outcomes to be leveraged. For the sake of the broader IT community and innovation in business outcomes, lets hope it can achieve this focus.

Capture Point

Quite simply, Google needs to drive an enterprise model that focuses on innovation rather than invention and fail fast. It needs to ensure that its innovations allow for long term investment by enterprises and to give the stability for both the client and partner community that is an outcome of the long term approach.

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Does Your CEO Care Which Vendor the Enterprise Chooses?

Without fail, every vendor I speak with is always keen to inform me of their strategic nature for their clients, their role as a “valued partner” and how the client regardless of industry or function would not exist without their value, unique differentiation etc., etc.

To test this, I regularly like to ask customers this question. “Does your CEO know or care which vendor you choose?” The answer may upset, and be a surprise to many vendors who overstate their importance to the client. Regularly the CEO has absolutely no role, knowledge or insight into vendor choice, and definitely no engagement.

To be fair, there is some context to be considered. It is not for all IT investment.

Whilst the answer for the majority of technology investment is no, for ERP, core banking, production platform investments and other 1000% mission critical functions, the answer to the question has to be yes. The relationship must be real. If not, that creates more problems than any other issues.


For virtualisation, visualisation, performance management, CRM implementation, customer experience, network performance management, and a very long list of IT and business technology investments, in reality the answer is a clear no.

Don’t be under the illusion that every technology related investment is the same; in fact the examples such are core banking are the exceptions. IT vendors should not completely despair. If the same question is asked towards other business functions and third party providers, such as recruitment providers, marketing content agency etc., the answer will be equally as disappointing to those vendors.

It is perhaps a reflection on the failure of technology to communicate strategic value, that due to the nature of the investments, the answer for Operational Technology in comparison to IT is typically different story, and an area that as ever, traditional IT can learn from, but has a poor track record of doing so.

History, the lack of awareness of technology investments, organizational structure and the vendors themselves are all reasons for the disconnect.

There is more bad news for the mid-sized vendor who believes he has the ear of the CMO, COO, CFO etc., the reality is that for even this part of the organizational layer, there is a lack of awareness aside from signing the (virtual) Purchase Order.

The lack of visibility is not a minor issue. It impacts investments, marketing, and the entire relationship with the client. It can lead to inefficiency in investments as unrealistic expectations. The impacts on innovation are also important.

Is the client  more detached from your innovation than you believe. The answer again may disappoint.

Questions that the vendor needs to consider in the light of the detachment from the senior executive include.

  • What does that mean for your level of “strategic partnership” with the client? Is it real, is it strategic?
  • Can you change this?
  • Is it practical to change this?
  • Does your business partner have a similar level of relationship, or more importantly a similar level of detachment from the actual client experience?
  • Are you wasting your time and capital trying to engage executives who are aspirational, rather than focusing on those who are operational and real users.

Capture Point

Most vendors of services to enterprises and agencies fall into the trap of significantly overstating their strategic importance to the client. As an economist, it is clear that this leads to significant inefficiencies in the relationship. 

A vendor has to consider the true level of engagement, and once this is considered the next task is to determine how to more realistically set expectations. 

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When a merger is an acquisition CSC “Merges” with HP Enterprise Services

Today, May 24th 2016, CSC and HP Enterprise (HPE) announced that the HPE Services unit would be spun out of HPE and merged with CSC which recently spun out its government business. This surprising deal is being positioned as a merger, but as indicated by the Press Release from CSC, with the headline address of Virginia, and Mike Lawrie as CEO, it is clear that this is fundamentally an acquisition, albeit by the smaller of the two providers.

Note that this is on the heels of the deal in Australia for CSC to acquire UXC. With the benefit of time, this deal and the scale of the comparative Australian entities was a good test ground for CSC and HPE to go global. CSC acquires UXC – Boosts Australia

The key facts of the merged entity are as follows:

  • Total Revenue – US$ 26B
  • Total Countries – Over 70
  • Total Clients – 5,000
  • Services Firm Ranking – 3rd largest globally (according to CSC/HPE)

The new and as yet unnamed firm will clearly have significant strength and capability in Infrastructure. It is stunning to realise that the 2nd, 3rd and 4th largest IT services providers 8 years ago are now all the one firm as HP ate EDS, and CSC now has merged/acquired HPE Services. This fact alone highlights how difficult the market has been for Infrastructure Services providers; particularly those who have struggled to maximize the cloud opportunity and shift the delivery model for both application and infrastructure services.

The number of employees of the new entity was not released, but it is clear that there will be “significant synergies” realized in this part of the business. That is of course corporate talk for downsizing. It is however hard to see how much can be cut from the HPE Services business which has been hit in an ongoing manner since the EDS acquisition.

Key Strengths

From the capioIT perspective, these are the key strengths of the deal

  • Scale of infrastructure reach and capability
  • Depth of partnerships with key providers, particularly Microsoft
  • Enhanced reach in core markets such as the US, Australia and UK
  • Strength in security capability and IP
  • Industry strength in Insurance, Transportation and Healthcare

Key Weaknesses

From the capioIT perspective, the key weaknesses are

  • Lack of depth in cloud capability and investment
  • Applications strength will lag several other providers despite recent focus
  • Subscale capabilities in key growth markets of Analytics/Big Data and mobility
  • Industry momentum has dissipated since EDS issue at HPE, hence reliant on smaller CSC industry footpath
  • More disruption for employees, particularly legacy EDS who have been unsettled for many years.

2016 has been the year of mergers in the IT Services sector. This has been predicted for years, and has clearly ratcheted up in pace. This year we have had three very significant and different acquisitions occur (alongside numerous smaller deals)

  • NTT Data acquire Dell Services
  • IBM acquire Bluewolf
  • CSC acquire/merge with HPE Services.

This consolidation will only accelerate. There are now several vendors who are subscale and struggling to adapt to the new business ecosystem. Firms such as CapGemini, CGI and the legacy Indian firms, alongside older firms such as Fujitsu, have to radically change their business to maintain leadership and innovation. On that note, HPE/CSC would do worse to add the likes of CapGemini to their new group to build out their application services, and EMEA capabilities.

The shift of IBM away from hardware and the jettisoning of IT Services by hardware based vendors such as Dell and HP has shown that the model of the integrated IT giant is no longer relevant. Fujitsu from the Japanese perspective at least is now the outlier.

Capture Point

Will the new business work? That is of course the $26 billion dollar question. There is no doubt that the integration has to happen incredibly quickly. The market is moving too dynamically for there to be any delay. CSC and HPE clients are not going to show the same patience in 2016 for a slow or challenged integration. It creates an infrastructure giant alongside an at times vulnerable IBM, so whilst it is a surprise, if the integration happens decisively and the clients stay to course, then the pain of recent years may enable the environment to make it a success. Failure on any of these counts will mean that it is a failure of the deal, and that will impact all parties from clients, partners and employees.

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The Digital Hotel Key – A Positive Entry to Disruption


On a recent visit to San Francisco I stayed at the San Francisco Hilton Union Square. (Don’t worry; I am not going to offer hotel room reviews. Tripadvisor and others have that covered). As a long time member of Hilton Honours I was offered the chance for a Digital Key to my room. My phone would become my primary communications device for the hotel.

The Digital Key is something that I have been positively anticipating for a few years. As an early adopter of technology, I was happy to use it regardless of potential flaws.

I was notified through the Hilton app that I could use a Digital Key. I could use this digital key to check in, select my room and then go to my room without having to go to the front office. All good. Unfortunately from the technology utilization perspective, I arrived early and had to go to reception because my digital key wasn’t ready due to the out of hours check in. That is of course no fault of the technology. Once I had done that I was away.

In general it worked well, although a few times took a few seconds to register, but again, it was not enough to test my attention span.

The key issue came on the second night. I went to open my room and the door would not open. It was not working at all. I had to get security to let me in to my room, (which took some convincing, because with Apple Pay, I did not need my wallet, so no ID).

I then had to go down to reception and have the key recoded. This was a concern. It provided doubt in my mind. Would the digital key fail again? Why did it fail?

I was fortunate to run into the hotel locksmith. After we discussed the technology the issue was that my room was in a wireless black spot. As a result the experience was diminished, and the risk of failure remained (As an aside, kudos to Hilton, they gifted my 10,000 bonus points as a result of my issue. Clearly they want the technology to work, and more importantly visitors to have an enhanced experience).

Some other points on the technology

  • Only one card can be issued per reservation. If there are two people staying at the hotel only one has a digital key. This is a flaw that is limited by technology. It must be changed to provide a real experience
  • The role of the hotel locksmith has continued to be disrupted. There is no role that stays the same in the digital era
  • More broadly, there is a very disrupted experience for the hotel staff, and the customer’s engagement with them. It will be possible not to speak with a human through the entire hotel experience, and the impact on society is very important to consider. I know as a regular traveller, human contact on the road, even at a hotel reception is very important.
  • The customer experience when it works is very strong. Virtually all customers have their mobile with them, so it is one less thing to lose during the day, or forget to take in the morning.


Of course this technology will not be limited to hotels. Any entry process that requires a key can now be mobile first, be it offices, gyms etc. This takes the mobile device and of course makes it event more central in our lives. Is that a good thing?

As your driver’s license, credit card, hotel key and entire record of life of an individual is attached to a mobile device, then we have to adapt our relationship with technology even more fundamentally. We will shift expenditure to those who can provide the integrated digital experience and away from those who fail to understand.

Capture Point

The hotel experience is ripe for disruption. The digital hotel key is just one step in this process. Initial experience has been positive. There is still work to be done in reliability and for multiple users, but it is a technology that will substantially change our relationship with the hotel experience. Now to disrupt the rental car market.

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