The face of IT services changed again today with the news that the Indian giant Wipro is to buy Appirio, a leading US-headquartered cloud consulting company. The $500m transaction underscores the way that the big outsourcers and system integrators are looking to build more capabilities in cloud and digital transformation. The deal broadly follows others such as IBM buying Bluewolf earlier this year and Accenture taking over Cloud Sherpas last year but it easily exceeds those combinations in size.
In a telephone call today, Appirio CEO Chris Barbin said he had fielded many approaches in the past but Wipro’s culture, scale and plan to take a hands-off approach made the deal a “no brainer”. With the backing of the Indian firm he said Appirio would be able to “accelerate to a billion [dollars] and beyond”.
Appirio has built its name primarily working with Salesforce.com and Workday but it would now be free to add geographic reach, more vertical industry and design know-how, and a broader set of capabilities, Barbin said. Wipro already has a practice on cloud-based spend management company Coupa, for example.
Barbin said earlier in the year that he was not contemplating a sale of the company but he had been persuaded by Wipro’s culture.
“We love the fact we are in six countries but some companies wanted 60,” Barbin noted, adding that the deal would mean there was no ceiling on the size of engagements Appirio could take on.
Wipro acquisitions of design house Designit and HealthPlan Services had shown it had a strong understanding of how to deal with cross-country acquisitions, he added.
Barbin said “there will always be some level of cultural learnings” but those deals had also shown that mixing Indian and US cultures was not an onerous challenge.
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