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.

About capioIT - Phil Hassey

capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. CEO Phil Hassey established the company in 2010
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