Tata Consultancy Services announced its first digital acquisition, a move experts say will help it get more teeth as compared to larger rivals Accenture and Cognizant in the growing design consulting space. The largest technology services company in India on November 1, announced it bought W12, a London-based digital design studio, for an undisclosed amount.
Calling digital acquisitions the “flavour of the season,” CEO and founder of Greyhoud Research Sanchit Vir Gogia said there was a “strategic reason” for IT firms to be making such acquisitions.
“According to our research, 50 percent of the IT budget will lie with a non CIO (chief information officer) role by 2020. So you’re (most likely) talking to a CMO (chief marketing officer), or CHRO (chief human resources officer) or CFO (chief financial officer) for business. If you have to speak to a CMO you need to be able to speak experience and immersion, not just IT,” he added.
The focus on design thinking is a significant move away from traditional outsourcing deals and models that focus only on infrastructure projects or application led deals.
“Accenture, IBM and Cognizant have built practices around design thinking, an area where Indian companies have been seen as laggards.TCS is also building capabilities around deep learning and natural language processing. This acquisition puts them in a seat next to Accenture or IBM. This gives them an edge in consultative sales, instead of infrastructure sales or business,” said Gogia.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.
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