Accenture, CentriLogic Cloud Deals Represent Way to Thrive Amid COVID-19Accenture, CentriLogic Cloud Deals Represent Way to Thrive Amid COVID-19
The two channel-centric companies have snapped up firms that help them grow, even – or especially – during a pandemic.
April 30, 2020
This month, two channel-centric companies with global presences – Accenture and CentriLogic – announced cloud acquisitions. While the deals were in the works prior to the coronavirus pandemic, they still signify that COVID-19 may not have the power to slow partners or vendors focused on next-generation technologies.
Indeed, if estimates from research firm IDC stay on target, cloud is the silver lining as the world works to survive an unprecedented economic threat. The transactions recently made public by Accenture and CentriLogic represent a small, yet positive, part of that new reality.
On April 20, Ireland’s Accenture, a worldwide professional services firm, said it has secured Paris-based Gekko, an Amazon Web Services consultancy, as its latest purchase. Accenture is an AWS premier consulting partner.
Then, on April 21, Canada’s CentriLogic, a managed IT solutions provider that also sells through fellow partners, said it has snapped up ObjectSharp. Headquartered in Toronto, ObjectSharp is a cloud-native development and application services firm specializing in Microsoft Azure; CentriLogic is a longtime Microsoft gold partner.
Neither CentriLogic nor Accenture disclosed the financial terms of their respective transactions.
Of interest is that the spread of COVID-19 still did not impede the timing of these acquisitions. That’s namely because enterprises, SMBs, nonprofits and other organizations throughout the world now need cloud technologies more than ever.
Robert Offley, CEO of CentriLogic, agreed.
CentriLogic’s Robert Offley
“COVID-19 has thrust all businesses into practically overnight digital transformation,” Offley told Channel Futures. “We experienced this beginning in the second week of March, when most metropolitan areas in North America went into shelter-in-place mode and, hence, created a work-from-home imperative. That very first Friday, CentriLogic had numerous customers approach us with a need to provide them with expanded infrastructure and upgraded security to prepare them for the transition.”
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.
One customer immediately tapped the MSP and data center provider to help it support 850 employees working from home. That’s 800 more than it was equipped to handle. Bringing on ObjectSharp during the COVID-19 pandemic will only make other such deployments smoother, Offley noted.
Accenture was reluctant to talk about if it is steering more or fewer cloud deployments during the spread of coronavirus. The company is traded publicly.
“We’re working to help clients outmaneuver uncertainty with very fluid changes daily so it won’t be appropriate to make projections about our business,” Cédric Le Yeuc’h, managing director at Accenture Technology in France and Benelux, told Channel Futures. “We need to look at this with a human and business lens more than ever.”
With that in mind, Accenture is keenly aware of the need to help clients achieve resilience. And cloud will prove critical to that capability.
“The cloud offers the best solution to scale system resources as required,” Le Yeuc’h said. “The cloud also helps by enabling the deployment of instant innovation and aligning technology costs to rapid fluctuations in demand.”
For example, he added, the Singapore government used cloud architecture to …
… quickly launch a mobile app for COVID-19 contact tracing. But that’s just one instance as millions of entities face extraordinary challenges.
“Most existing business resilience plans were drawn up in a world where disruption on this scale was nearly unimaginable,” Le Yeuc’h said. “Few, if any, businesses could have planned for a scenario where the world’s workforce was sent home and entire industries suspended.”
Putting a Pre-COVID Strategy Into Action During the Pandemic
Again, Accenture and CentriLogic each had targeted and set in motion their acquisitions before COVID-19 was even a known threat. That means the deals bring longer-term benefits to each of the companies. They also serve as guidance for other partners seeking to grow — especially in the strangest time in modern memory.
For Accenture, buying Gekko comes not long after it bought Cirruseo, a Google Cloud service provider in France. Accenture also teams with Microsoft Azure. For now, Accenture intends to use both Gekko and Cirruseo to capitalize on the multicloud opportunity, a strategy used by 81% of organizations, according to Gartner. They do so “out of a desire to avoid vendor lock-in or to take advantage of best-of-breed solutions,” said Michael Warrilow, vice president analyst at Gartner. “We expect that most large organizations will continue to willfully pursue this approach.”
Le Yeuc’h concurred.
Keep up with the latest developments in how the channel is supporting partners and customers during the COVID-19 crisis.
“Most companies won’t have the luxury of having discrete teams dedicated to each cloud provider,” he said. “Our clients are challenged with where to make skills investments to become fluent across providers and where to be provider-specific — whether it’s security experts, cost analysts, business people, or the subject matter expert creating and operating the infrastructure. Ultimately, some skills will be cross-platform and some platform-specific.”
Having Gekko on board bolsters Accenture’s multicloud approach on the AWS side. Gekko, founded in 2015, holds more than 85 AWS certifications as well as a storage competency. It is an AWS advanced partner and an AWS authorized training partner. Gekko also is part of the AWS Solution Provider and Well Architected Framework program.
To be sure, Accenture’s multicloud plan seems smart, particularly in France. The country ranks among the top cloud adopters in Europe. The latest figures from the U.S. International Trade Administration show that France’s cloud computing market grew by 23% between 2017 and 2018, for a total value of more than $11.2 billion. Government analysts said the numbers would only continue to rise. Accenture appears to expect the same.
“The addition of Gekko will be a massive step forward in our growth strategy in France,” Le Yeuc’h said.
And even though COVID-19 has made its impact known since Accenture decided to buy Gekko, there’s no slowing the professional services firm. The company says it must help clients to operate under a new reality of a challenging economic and health environment. The cloud serves as the key to achieving that. Of course, that’s no easy task, considering risks including supply chain disruptions, surges in digital transactions, the need for real-time data, new security threats and more, but it will be doable. For Accenture, Gekko staff will be vital to navigating such challenges.
“The talent and skills that the Gekko team brings are key to our growth plans,” Le Yeuc’h said. “There are no plans for redundancies or layoffs.”
CentriLogic’s Offley echoed that statement.
“If anything, we expect a need to add to the ObjectSharp employee base,” he said.
That is because …
… COVID-19 is fueling the need for ObjectSharp’s competencies. ObjectSharp offers a swath of services throughout the United States and the U.K., including DevOps and microservices orchestration, cloud pipelining, Kubernetes, automated testing, cloud governance and performance monitoring. Its customers include BMO, Hatch, Autodesk and Rogers.
CentriLogic tagged ObjectSharp as an acquisition possibility in the middle of last year, pre-coronavirus. Going ahead with the deal during COVID-19 should only pay off.
“Enterprises are evaluating how to move their critical applications to the cloud as a primary component of their IT transformation strategies,” Offley said. “This journey can be quite complex in most circumstances. Many enterprises do not have the skill sets required to develop, migrate, and manage these applications in the cloud and at scale. With ObjectSharp, CentriLogic is … positioned to help enterprises get these applications to the cloud and manage them on an ongoing basis.”
Similar to Accenture’s intent for Gekko and Cirruseo, CentriLogic will combine ObjectSharp’s talents with those of another company it recently bought. The provider purchased ManageForce, a cloud, enterprise resource planning and data services provider, in January. Combined, CentriLogic, ObjectSharp and ManageForce offer a full-stack solution for IT transformation, Offley noted.
Cloud: Key to Thriving Amid a Pandemic
While Accenture and CentriLogic are just two channel companies out of many, their cloud-centric strategies and momentum offer road maps for peers maneuvering the effects of the novel coronavirus.
Once COVID-19 started making its way out of China, enterprises in other countries began allowing employees who typically worked in a corporate office to telecommute. For the firms more prepared to support work-from-home initiatives, the shift caused few, if any, problems. But for others, the change turned into a scramble. Companies and organizations have had to figure out, on the fly, how to provide the necessary technological support to keep operations running — and many floundered. Enterprises face a talent shortage when it comes to the cloud, as a March 2020 Forrester report, “Mind the Cloud Skills Gap,” points out. Managed services count as a popular option for supplementing or replacing these skills, analyst Tracy Woo noted. Thus, since about March, the channel has since found itself in more demand than ever.
That activity bodes well for partners and their businesses, and mainly those looking to evolve in a difficult time.
“It’s critical to consider a pivot in your market focus and breadth,” Offley said. “This is particularly true now, as the market increasingly demands more resourceful, strategic solution providers to help organizations … achieve their IT transformation objectives.”
Finally, there also is call for optimism when it comes to global cloud revenue even as COVID-19 takes its toll.
Over the past four months, enterprises, SMBs and other entities have leaned on cloud technologies more than perhaps planned. That will help 2020’s cloud IT infrastructure spending rise 3.6% over 2019’s $66.8 billion to $69.2 billion, research firm IDC says. Spending on legacy infrastructure, however, will decline 9.2%, to $61.4 billion this year, IDC found. Sticking with the cloud and its associated technologies may manifest as the essential way for the channel not just to survive the pandemic, but to thrive during and beyond.
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