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Accenture acquisition highlights recent IT services M&A

The acquisition of a consulting company is expanding Accenture Industry X.0, while SADA Systems and Wipro are seeking greater focus in divestitures; more news from the week.

The latest Accenture acquisition along with spinoffs at SADA Systems Inc. and Wipro Ltd. highlight recent deals in the IT services industry.

At Accenture, the global professional services firm has agreed to purchase Enterprise System Partners (ESP), a consulting and manufacturing services provider that focuses on the life sciences industry. ESP is based in Cork, Ireland, but has offices in the U.S., France, the Netherlands, Puerto Rico and Turkey. When the deal closes, ESP will become part of Accenture Industry X.0, a group chartered to help clients pursue the digital reinvention of industry.

ESP specializes in manufacturing execution system (MES) platforms and serialization. MES technology connects, monitors and controls complex manufacturing systems with the goal of ensuring effective execution of manufacturing operations.

Anne Marie O'Halloran, a managing director and lead of Accenture's Life Sciences Industry X.0 group, estimated that 60% to 65% of ESP's business is in the MES field. Some typical platforms include MES offerings from Rockwell Automation, Siemens PLM Software and Werum IT Solutions.

ESP, meanwhile, also delivers serialization solutions that allow life sciences companies to track each saleable unit of a prescription product as it travels through the supply chain.

The pending Accenture acquisition fits a pattern of other deals the company has conducted in recent years. In 2018, for example, Accenture acquired embedded software company Pillar Technology, and Mindtribe, a hardware engineering company. Those companies contribute to Accenture Industry X.0's product innovation focus area.

ESP, however, will play a role in the manufacturing, production and operations aspect of Accenture Industry X.0, O'Halloran said.

In addition, the Accenture acquisition will also complement the company's LabAnswer purchase in 2017, according to O'Halloran. LabAnswer, which now operates as Accenture Scientific Informatics Services, helps clients capture, manage and analyze scientific and lab data, she added.

Accenture plans to expand upon ESP, which would bring a team of 200 professionals to the company. "We intend for them to really be the ... foundation for building a broader digital manufacturing practice," O'Halloran said.

SADA Systems, Wipro spinoff units

While Accenture looks to expand, SADA Systems is sharpening its focus on Google, a relationship that dates back to 2006. SADA Systems, a business and technology consulting firm based in Los Angeles, this week sold its Microsoft Business Unit to Core BTS. Core BTS is a national IT solutions, security and managed service provider based in Garden City, N.Y.

SADA is going to focus exclusively on its Google Cloud business.
Tony SafoianCEO, SADA Systems

"SADA is going to focus exclusively on its Google Cloud business," said Tony Safoian, CEO at SADA Systems. "We feel very confident this is the optimal direction for our business going forward."

Safoian cited his companies' longtime partnership with Google, noting SADA Systems was a Google Apps launch partner. That software bundle is now known as G Suite.

"We wanted to give our full attention and resources to a single practice," Safoian said when asked about the motivation behind the sale.

He said 30% of SADA Systems' workforce has transferred to Core BTS in light of the transaction.

Wipro, meanwhile, has moved to shed its Workday and Cornerstone SaaS business to Alight Solutions, a human capital solutions provider. The divestiture, which will transfer about 350 Wipro employees to Alight, is expected to close by March 31.

Wipro picked up the Workday and Cornerstone business in its 2016 buyout of cloud consultancy Appirio, which also operates a large Salesforce practice. Wipro said it will continue to grow the Salesforce business under the Appirio brand. Wipro will also continue to offer Workday Application Management Services, testing and integration services to its existing client base.

The divestiture of the Workday and Cornerstone business stems from a 10-year engagement Wipro and Alight announced in September 2018. The arrangement, under which Wipro provides a suite of offerings to Alight, could result in revenue of $1.5 billion to $1.6 billion through 2028, according to Wipro.

Other news

  • In another IT services deal, NTT Security Corp., based in Tokyo, has agreed to acquire WhiteHat Security, an application security provider. Once the deal closes, WhiteHat Security will operate as an independent subsidiary of NTT Security. NTT Security provides managed security services, security consulting and security technology.
  • Rackspace took the wraps off a new branding launch, which includes an updated logo and website landing page.
  • Mission, a managed services and consulting company based in Los Angeles, said it has inked a line-of-credit agreement with Silicon Valley Bank. The pact provides up to $8 million of new capital, the company said.
  • Security vendor Webroot has updated its security awareness training offering for MSPs. The offering now includes a streamlined workflow for launching training campaigns, client breach reports and revised course content, Webroot said. Additionally, the security awareness training offering integrates with the Webroot Global Site Manager console.
  • IT automation platform vendor Atera released a new version of its MSP software. The release features integration with ScreenConnect remote access, as well as enhancements to its patch management tool for Mac management, Atera said. The vendor said it has also migrated to Microsoft Azure Service Fabric
  • Maven Wave, a cloud consulting firm in Chicago, said it has obtained a total of eight Google Cloud Partner specializations, including five new specializations within the past three months. The latest specializations are Application Development, Cloud Migration, Infrastructure, Location-Based Services and Marketing Analytics.
  • Intermedia, a cloud communications and collaboration vendor, released an analytics platform for its Unite unified communications and collaboration system. The analytics platform, Unite Envision, is available for free with the Unite system, Intermedia said.
  • Data protection vendor Virtru introduced a global partner program for value-added resellers and distributors. The program has two tiers -- Premier and Elite -- with benefits that include sales enablement, deal registration and joint marketing programs.
  • Mosyle, an Apple mobile device management software firm, rolled out an MSP program. MSPs can join the program by attaining certification, Mosyle said. The program provides access to a Mosyle dashboard and technical support.
  • Twelve percent of channel partners are using brand-provided through-the-channel marketing platforms, according to a Forrester Consulting study commissioned by OneAffiniti, a channel marketing solutions provider based in Austin, Texas. Barriers to wider adoption include a lack of co-branded content and materials, a lack of marketing resources and a lack of automation in executing brand marketing activities, the study reported.
  • Konica Minolta said it is urging its partners to align with digital transformation trends in the marketplace. At its 2019 U.S. dealer conference this week, the vendor said it highlighted programs for its All Covered managed services and new multifunctional printers, among other offerings.
  • Cybersecurity vendor Avast unveiled a cloud-based web security product for small and medium-sized businesses. Avast Business Secure Web Gateway will be sold directly and through partners, a company spokesperson said.
  • K2 Cyber Security said its cloud workload security platform, released last month, can be sold by channel partners. "In enterprise security business, channel partners are extremely important. We will be selling through channel partners and direct, as well," said Pravin Madhani, CEO of K2, in an email.
  • BitTitan, a managed services automation company, appointed Brad Rosairo as its new director of business development in the Asia-Pacific region. Rosairo joined BitTitan from Neota Logic, where he served as vice president of business development in Asia Pacific. BitTitan also noted that it expanded its roster of distributor relationships in the Australian market.

Market Share is a news roundup published every Friday.

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The latest Accenture acquisition aims to bolster the company's Accenture Industry X.0 group. How do you see M&A activity reshaping the IT services industry?
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