Indian IT giant Wipro has penned down an agreement to acquire cloud services company Appirio. The acquisition will lead to the formation of one of the world’s largest cloud transformation practices. There are still a lot of formalities to be gone through, however, the acquisition is likely to conclude within 2016.
Appirio, in case you are unaware of it, is a global cloud services company that specializes in the creation of worker and customer experiences that in the company’s own words “drive profitability and growth”. Appirio is a well established company and was formed almost a decade ago. The company has its headquarters in Indianapolis with offices in San Francisco, Dublin, London, Jaipur, and Tokyo.
Appirio has been involved with creating solutions for several well-known names including Stryker, Robert Half, Johnson Controls, Cardinal Health, Coca-Cola, eBay, Facebook, Home Depot, and Sony PlayStation
The acquisition is also indicative of consolidation in the cloud. Wipro will be shelling out $500 million to seal the deal, an increase over the rumored $400 million. The acquisition is expected to give the Indian firm, a big leg up in IT services. While IT was already Wipro’s forte, merging with Appirio will provide the company with the ability to create next generation worker and customer experiences.
Speaking on the topic, Abidali Z. Neemuchwala, Chief Executive Officer & Member of the Board, Wipro Limited, said:
In an increasingly digital world, as consumer behaviors and expectations continue to be reshaped by experiences, companies are recognizing that they need to transform how they engage with customers and employees by leveraging the power of Cloud. Appirio and Wipro are coming together to unlock transformational synergies in the applications space and help enterprises create new business models.
Chris Barbin, Chief Executive Officer of Appirio said,
When you combine Wipro’s global scale and deep digital focus with Appirio’s transformative worker and customer experience expertise, and best in class team, brand, and partners, you create a formidable force in the industry. Together, our aim is to dominate the market and claim the top spots in industry Net Promoter Score, market share, and best places to work.
Speaking about why he decided to sell the company to Wipro, Barbin said that his decision had nothing to do with the sort of reasons that have been driving companies to sell themselves off lately — such as low returns, board pressure and so on. Instead, the decision was taken after careful consideration and with an eye to what he calls the 4 C’s, namely: Customers, Careers, Competition and Culture.
He also said that joining forces was the natural move for Appirio, for it to be able to compete on fair terms with the likes of Accenture and Deloitte, who according to him “have garnered disproportionate market share”.
Meanwhile, the acquisition is likely to create a force to be reckoned with in the IT and cloud sector. Although Appirio employs merely 1,250 as compared to Wipro’s 1,70,000 employees, it will form a significant part of the company. Considering the $500 million price that Wipro paid — itself being a $18 Billion entity –the company had probably thought hard and long before making the move.
Interestingly, Wipro-Appirio together will also become the largest entity in the TWITCH (TCS, Wipro, INFY, Tech Mahindra, Cognizant and HCL) group, after the completion of the deal.