Partha Iyengar, Gartner Vice President and Head of Research – India
Capgemini has been investing in creating a more compelling global delivery offering, starting with the Kanbay acquisition earlier. However, compared to their other ‘global global’ peers, Accenture and IBM, they were still a distant third in this capability, and compared to the global Indian providers were even more behind. This acquisition, in one fell stroke, levels the playing field to a large extent both in terms of capacity as well as breadth of coverage areas and industry verticals. The added HUGE bonus for Capgemini is that it gives them, again in one move, a great presence and foothold in the US market, which has always been a challenge for them as a Europe centric provider. This boosts their presence and revenue in the largest market for global sourcing and gives them a credible offering for the US market. Acquiring this in an inorganic manner, especially since they were very late to the global sourcing paradigm earlier on, would have been difficult to impossible.
The biggest challenge and hurdle ahead of them is the multi-cultural integration task that lies ahead. Their track record with Kanbay was not the biggest success, and they need to show that they can do much better with this acquisition, which is a much bigger one as well. They will have to move very quickly to convince clients that projects are safe and that the Cap acquisition gives IGate clients a much bigger capability and deeper domain expertise in some domains (which it does). If they are not successful in doing this, they risk the flight of clients, especially in the US.
