Accenture IT companies based in the US acquired German company Umlaut to improve engineering and service games on June 14. According to analysts, while this step will beat Accenture’s ability in the engineering room, it will have it to increase their focus in this sector since the last time.
Umlaut has 4,200 employees, including engineers and consultants, which will now be integrated with X Accenture X services, which focus on industry 4.0 including IoT and smart manufacturing throughout the industry such as aerospace, automotive, telecommunications, energy and utilities.
“We estimate that digital will eventually be applied on the scale to the core of the company’s business – design, engineering and manufacture of their products. And, for almost a decade accent has established unique capabilities and ecosystem partnerships to combine digital power with traditional engineering services,” said Julie Sweet, Chief Executive Officer, Accenture in a statement.
“Covid-19 has accelerated the need for companies to change this core operation, and the leading and very special engineering services in Umlaut will increase our ability to meet the acceleration demand and also continue to innovate for our clients,” added sweet.
Unlike Indian players, Accenture has no big focus in this sector. But over the past few years, the company has made acquisitions to build their technical skills. Since 2017, the company has made 22 acquisitions to build industrial X capabilities.
Umlaut is one of the biggest acquisitions in this space for companies, according to analysts. The company’s income in FY19 is $ 402.6 million.
Pareksh Jain, founder, pareaph consulting, who is a technical consultation and service, said, “This is a big step and is a clear shift in the company acquisition strategy buying many small companies and integrating it with the company. They have divert attention to the gear now to strengthen the game their techniques and services. “
Engineering and R & D services are one of the fastest growing sectors compared to IT and BPO services. This sector developed in two digits before the emergence of pandemic. This sector is set to regain two-digit growth this year, with digital transformation to get the momentum behind the pandemic.
Jain explained that the company has realized that without digital engineering capabilities, companies may not be able to offer end to end solutions, making investments in this sector important.
Besides Accenture, other global companies like Capgemini who now have a big focus in space. Capgemini acquired Altran, a technical service company for $ 4.1 billion.
Impact on India India
But this might affect Indian IT companies. Analysts suggest that competition will be high for the top India with the entry of Accenture for large offers in the engineering room. While the impact may be indirect for pure playing engineering service players, analysts say the company must build a scale or focus on niche abilities to compete with larger players in the long run.
