Why IT cos are acquiring Salesforce partners

  • 11 months ago
  • news
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BENGALURU: IT firms, professional services firms, and even private equity (PE) players are snapping up Salesforce partners and consultancies as cloud-based offerings emerge as key differentiators. Over 50 such M&As have happened in the last four years.
Wipro recently acquired Salesforce platinum partner 4C for 68 million euros. Belgium-based 4C is one of the largest Salesforce partners in the UK, Europe and the Middle East. In March, Infosys acquired Salesforce consulting company Simplus for $250 million. Cognizant this year acquired European Salesforce specialist El-Technologies and US-based Salesforce platinum partner Lev. Accenture this year bought the Salesforce practice of Sierra-Cedar. US-based PE firm Frontenac snapped up Salesforce partner Prime Technology Group.
Viral Shah, CEO of Julia Computing, says large enterprises are still only dipping their toes into cloud technologies. “As we have seen repeatedly, it is usually difficult to migrate old technologies to the cloud. As businesses have an influx of large amounts of data, and they move from traditional ways of engaging with their customers to digital ways, they are adopting new technologies. These new technologies are often cloud-first, Salesforce being at the forefront of these,” he says.

Salesforce revenue and share price are surging. Revenue in fiscal 2020 rose 29% to $17 billion. The share price has risen 50% since the beginning of this year, and its valuation stands now at $228 billion. There are analysts wondering if Salesforce will be the next trillion dollar company.
IDC estimates that jobs created from the use of Salesforce cloud services from 2019 through 2024 will touch 4.2 million. It estimates that in 2019, for every $1 Salesforce made, the ecosystem made $4.3, and this latter figure would rise to $5.8 by 2024.
Rod Bourgeois, head of research in DeepDive Equity Research, said a big part of the digital IT wave is moving from on-premise enterprise software to SaaS (software as a services). “Salesforce is a pioneer and major leader in SaaS solutions, and Indian IT firms are generally needing to use acquisitions to build out their systems integration capabilities in the SaaS market,” he said. Bourgeois said Accenture and Deloitte have historically been the leaders in the SaaS deployment and systems integration market, and “we see other players pursuing acquisitions to expand into this market as a critical step in shifting to the digital demand era.”
Vivek Ravishankar, co-founder and CEO of HackerRank, says Salesforce growth is reflecting in big demand for Apex. Apex is a programming language developed by Salesforce and is extensively used in its ecosystem. “It’s one of the fastest growing skills within the Salesforce ecosystem,” says Ravishankar.

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