DXC Technology’s decision to acquire niche engineering services firm Luxoft may be considered as a step towards eventually reducing its dependency on Mphasis, said analysts. DXC, an IT and digital services company, was formed in April 2017 after the merger of CSC and the enterprise business of Hewlett Packard Enterprise. On Monday, the company said it would acquire Luxoft Holding for about $2 billion (Rs 14,120 crore) to strengthen its digital capabilities.
“Eventually, the dependence on Mphasis (for DXC) has to come down and DXC has to be on its own. Such acquisitions are also part of that (effort),” said Sanchit Vir Gogia, chief executive of Greyhound Research. He said it however did not mean DXC’s relationship with Mphasis would “cease to exist, but the scope and size will look different”.
What stands out in this acquisition, Gogia pointed out, is the high-growth verticals of Luxoft, such as automotive. “It may be good for DXC to realign forces.”
Analyst:
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.
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