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The cloud race picked up additional steam in the IT service sector today with IBM announcing plans to acquire Blue Wolf Group LLC, a Salesforce channel partner and cloud consultant.
The IBM acquisition is the latest in a series of deals in which top-tier IT service providers have purchased cloud consultancies. CSC in September 2015 closed the purchase of Fruition Partners, a management consulting firm focusing on the ServiceNow cloud platform. In October, Accenture completed its purchase of Cloud Sherpas, a consulting firm with expertise in the Salesforce, ServiceNow and Google cloud platforms. And in November, IBM closed on its acquisition of Meteorix LLC, another IBM cloud acquisition focused on Workday, which sells cloud-based human resources and financial applications.
When the transaction closes, which is expected to happen in the second quarter, Bluewolf will join IBM Global Business Services' Interactive Experience (iX) practice. IBM iX, a hybrid consultancy and digital agency, provides strategy, creative, design and data integration, among other services. Bluewolf will bring about 500 employees to IBM iX.
Bluewolf, founded in 2000, will maintain its brand within IBM. Eric Berridge, Bluewolf co-founder and CEO, will lead a combined Salesforce consulting practice, according to a Bluewolf spokeswoman. Bluewolf will maintain its brand identity under the new arrangement.
"Upon close of the acquisition, IBM iX and Bluewolf will work together, but Bluewolf will continue to operate in a manner that preserves the unique aspects of the company," a Bluewolf spokeswoman said.
Cloud race: Keeping up with Accenture
The IBM cloud acquisition will help it keep pace with rivals such as Accenture in the Salesforce cloud consulting space. The Bluewolf spokeswoman said IBM iX and Bluewolf, when the deal closes, will become "one of Salesforce's largest consulting partners."
Jeff Kaplanmanaging director, THINKstrategies
"The Bluewolf acquisition strengthens IBM's Salesforce consulting and deployment skills in the U.S. and enables the company to keep pace with Accenture's capabilities in light of its acquisition of Cloud Sherpas," noted Jeff Kaplan, managing director of THINKstrategies.
Kaplan said the Bluewolf deal represents the latest example of major IT players "attempting to bolster their cloud consulting and integration skills quickly through acquisition."
The objective, he added, is to keep up with accelerating demand and escalating competition. Earlier this year, IDC forecast public cloud spending to grow at a 19.4% compound annual growth rate through 2019. IDC said the public cloud market will expand to $141 billion in 2019, up from $70 billion in 2015. The market researcher noted that software as a service "will remain the dominant cloud computing type."
The IBM cloud acquisition begs the question: Is the market beginning to run out of attractive buyout candidates amid the cloud race?
Kaplan suggested that might be the case, especially in the Salesforce space.
"The acquisition leaves Appirio as the most significant cloud-native consultancy focused on Salesforce," he said. "There are many other smaller consultancies, [but] they don't have the same size, reputation and customer base."
Appirio, a services company based in Indianapolis, lists Salesforce, Apple, Workday, Cornerstone, Google and Amazon Web Services as strategic partners.
Compare the current wave of cloud consulting buyouts to the client-server past.
Read how Bluewolf manages partnerships.
Learn about IBM's hybrid cloud offerings.