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Accenture to Boost CRM Capabilities with New Energy Buyout
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Global IT services provider, Accenture plc (ACN - Free Report) recently announced its entry into an agreement to acquire New Energy Group – an Italy-based company that specializes in delivering Salesforce’s (CRM - Free Report) product and solutions. Financial terms of the transaction have not been disclosed. The move comes as part of Accenture’s strategy of strengthening its position across Europe as a provider of Salesforce services and cloud implementations.
New Energy Group was founded over a decade ago and the company has evolved as one of the leading provider of Salesforce capabilities in Italy and Spain. The company has operative headquarters in Rome, Milan, London, Madrid and Barcelona, and employs over 450 professionals.
The deal pertains to all the assets of New Energy Group, comprising the New Energy Salesforce services team in Italy, the New Energy Salesforce services Aborda team in Spain and the digital services team, Mind, in Italy.
Apart from these assets, Accenture will also acquire New Energy’s suite of products and solutions based on Salesforce – Bit2win. As per the company, Bit2win “enables companies to transform their front office with simple, agile and digitally enabled sales solutions”.
Post the acquisition, Accenture intends to integrate New Energy Group with its Cloud First Applications team, which specializes in delivering cloud services for Salesforce, Workday (WDAY - Free Report) , ServiceNow, Alphabet’s (GOOGL - Free Report) Google and other cloud technology providers.
With the latest acquisition, we believe that Accenture will be able to leverage the latest technology for its clients, enhance its performance, and fortify its position as a global leader in the Software-as-a-Service (SaaS)-based application and Salesforce service markets. It will also help Accenture improve customer relationships and expand its market share by solving business-critical issues.
Acquisitions have been one of the key growth strategies for Accenture. Since last year, the company has been aggressively trying to strengthen its position as a leading provider of Salesforce capabilities.
Notably, Accenture is already a global leader in the Salesforce implementation service space, with currently over 3,700 skilled consultants. Moreover, given that Salesforce is one of the largest providers of cloud-based applications and software, it is imperative that Accenture enhances its capabilities in delivering the former’s services.
To this end, in Oct 2015, the company acquired Cloud Sherpas, which specialized in providing cloud advisory and technology services for Google, Salesforce and ServiceNow, in the U.S.
In Jan 2016, it bought CRMWaypoint, a cloud advisory and technology service supplier, especially Salesforce’s cloud solutions for sales, service and marketing, across the Netherlands. Also, this May, it acquired Tquila UK — one of the leading independent consulting service providers of Salesforce’s products and solutions in the region.
Industry Forecasts Justify Strategy
The company’s strategy of enhancing its cloud capabilities through such acquisitions is a step in the right direction, as evident from the recent forecast provided by several independent research firms. According to Gartner, the SaaS and cloud-based business application markets are likely to grow from $31.4 billion in 2015 to $37.7 billion in 2016, reflecting a year-over-year growth rate of 20.3%.
Another research firm, International Data Corporation (IDC) predicts that the cloud software market will witness a compounded annual growth rate (CAGR) of 18.3% during the 2014–2019 period, reaching $112.8 billion by 2019 end.
Exponential growth in the amount of data, complexity of data formats and the need to scale resources at regular intervals compelled several companies to turn to cloud-computing vendors. Therefore, considering the growing need for cloud-based applications and software, we expect Accenture’s investments in this space to propel long-term growth.
In Conclusion
We are encouraged by Accenture’s strategy of growing through acquisitions. These buyouts have enabled the company to foray into newer markets, diversify and broaden its product portfolio, and maintain a leading position. We believe that regular acquisitions will significantly contribute to the company's revenue stream.
However, we remain cautious about intensifying competition and an uncertain IT spending environment, which may undermine Accenture’s near-term performance.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
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Accenture to Boost CRM Capabilities with New Energy Buyout
Global IT services provider, Accenture plc (ACN - Free Report) recently announced its entry into an agreement to acquire New Energy Group – an Italy-based company that specializes in delivering Salesforce’s (CRM - Free Report) product and solutions. Financial terms of the transaction have not been disclosed. The move comes as part of Accenture’s strategy of strengthening its position across Europe as a provider of Salesforce services and cloud implementations.
New Energy Group was founded over a decade ago and the company has evolved as one of the leading provider of Salesforce capabilities in Italy and Spain. The company has operative headquarters in Rome, Milan, London, Madrid and Barcelona, and employs over 450 professionals.
The deal pertains to all the assets of New Energy Group, comprising the New Energy Salesforce services team in Italy, the New Energy Salesforce services Aborda team in Spain and the digital services team, Mind, in Italy.
Apart from these assets, Accenture will also acquire New Energy’s suite of products and solutions based on Salesforce – Bit2win. As per the company, Bit2win “enables companies to transform their front office with simple, agile and digitally enabled sales solutions”.
Post the acquisition, Accenture intends to integrate New Energy Group with its Cloud First Applications team, which specializes in delivering cloud services for Salesforce, Workday (WDAY - Free Report) , ServiceNow, Alphabet’s (GOOGL - Free Report) Google and other cloud technology providers.
With the latest acquisition, we believe that Accenture will be able to leverage the latest technology for its clients, enhance its performance, and fortify its position as a global leader in the Software-as-a-Service (SaaS)-based application and Salesforce service markets. It will also help Accenture improve customer relationships and expand its market share by solving business-critical issues.
ACCENTURE PLC Price
ACCENTURE PLC Price | ACCENTURE PLC Quote
Salesforce Capabilities Expansion Impressive
Acquisitions have been one of the key growth strategies for Accenture. Since last year, the company has been aggressively trying to strengthen its position as a leading provider of Salesforce capabilities.
Notably, Accenture is already a global leader in the Salesforce implementation service space, with currently over 3,700 skilled consultants. Moreover, given that Salesforce is one of the largest providers of cloud-based applications and software, it is imperative that Accenture enhances its capabilities in delivering the former’s services.
To this end, in Oct 2015, the company acquired Cloud Sherpas, which specialized in providing cloud advisory and technology services for Google, Salesforce and ServiceNow, in the U.S.
In Jan 2016, it bought CRMWaypoint, a cloud advisory and technology service supplier, especially Salesforce’s cloud solutions for sales, service and marketing, across the Netherlands. Also, this May, it acquired Tquila UK — one of the leading independent consulting service providers of Salesforce’s products and solutions in the region.
Industry Forecasts Justify Strategy
The company’s strategy of enhancing its cloud capabilities through such acquisitions is a step in the right direction, as evident from the recent forecast provided by several independent research firms. According to Gartner, the SaaS and cloud-based business application markets are likely to grow from $31.4 billion in 2015 to $37.7 billion in 2016, reflecting a year-over-year growth rate of 20.3%.
Another research firm, International Data Corporation (IDC) predicts that the cloud software market will witness a compounded annual growth rate (CAGR) of 18.3% during the 2014–2019 period, reaching $112.8 billion by 2019 end.
Exponential growth in the amount of data, complexity of data formats and the need to scale resources at regular intervals compelled several companies to turn to cloud-computing vendors. Therefore, considering the growing need for cloud-based applications and software, we expect Accenture’s investments in this space to propel long-term growth.
In Conclusion
We are encouraged by Accenture’s strategy of growing through acquisitions. These buyouts have enabled the company to foray into newer markets, diversify and broaden its product portfolio, and maintain a leading position. We believe that regular acquisitions will significantly contribute to the company's revenue stream.
However, we remain cautious about intensifying competition and an uncertain IT spending environment, which may undermine Accenture’s near-term performance.
Currently, Accenture carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>