Accenture gains cloud muscle in Europe with the Linkbynet acquisition

With an aggressive acquisition strategy, Accenture will put pressure on its competitors to acquire firms of their own as a high growth market is also faced with a talent shortage in experienced, certified professionals. Additionally, as Accenture adds to talent across all major hyperscaler platforms it boosts its ability to advice, develop, and deploy solutions that are multi-cloud and global in nature. What is yet to be seen will be how well Accenture can integrate the best practices and organization structure across all these acquired firms and compel these firms existing clients to remain Accenture clients for the long-term. If it integrates successfully Accenture will continue to hold the leading position in the cloud service market for the coming years too.

In September 2020, Accenture launched Cloud First with a $3 billion investment spanned over three years to help global clients across industries accelerate digital transformation initiatives. The European market is Accenture’s second largest market in terms of revenues and the vendor maintains a substantial client base. The Linkbynet acquisition is going to be a part of their Cloud First strategy. Linkbynet – a leading French-based service provider – specializes in cloud optimization, managed services, cloud transformation, and cloud security services. With Linkbynet, Accenture would add more skilled cloud professionals and enhances its cloud capabilities making its presence even sharper in the European market.

Accenture is building cloud dominance through acquisitions

In the last 24 months, Accenture has made numerous cloud-relevant acquisitions, particularly in the European market (Exhibit 1). Including Linkbynet, it adds 1,350 cloud professionals. Cloud-relevant acquisitions in other markets include Imaginea, Wolox, Edenhouse, Infinity works, Zag, Olikka, and Industrie&Co. With these acquisitions, Accenture has added nearly 2,500 cloud professionals.

Accenture has a strong pool of resources in Azure, through Avanade, and has continued to diversify its capabilities in AWS, GCP, and others. Accenture’s depth and breadth of cloud expertise, industry cloud solutions, broad partner ecosystem, IP assets, and tools support enterprises to achieve value from the cloud at greater haste and scale. By acquiring firms, they also bring in additional clients to Accenture in target markets.

Exhibit 1: Accenture’s cloud-based acquisition in Europe – Last 24 months

Source: Accenture

These firms bring experience and expertise in AWS and GCP. Accenture is making strategic moves in picking the resources in high-demand areas like application modernization and security in the cloud-native space. The consecutive cloud acquisitions (Cirruseo, Gekko, Enimbos, Cygni) and the current in talks with Linkbynet in the European market is cementing Accenture’s position in the cloud space.

Why Linkbynet is a significant acquisition for Accenture in Europe?

Linkbynet is notable compared to other recent acquisitions because it will add nearly 900 skilled cloud professionals with 400+ certifications from the hyperscalers like Azure, AWS, GCP, Alicloud, and others in the European market. The Linkbynet team brings cloud and engineering specialization, managed cloud services, DevOps, and containerization, emerging technology tools, and cybersecurity intelligence capabilities to the Accenture Cloud First services.

Comparably, the Imaginea brought nearly 1,350 cloud professionals to Accenture’s US market, with Linkbynet adds the highest number of cloud skills to Accenture since 2019. In addition to its French HQ, Linkbynet has offices in Belgium, Luxembourg, Canada, Mauritius, China, Singapore, and Vietnam. This acquisition strengthens the European market but also boosts the global market capabilities to an extent.

Technology leader Paul Daugherty, Group Chief Executive, Accenture Technology, quoted this:

“With most businesses currently at only about 20% in the cloud, moving to 80% or more rapidly and cost-effectively is a massive change that requires a bold new model. Accenture Cloud First, along with our $3 billion investment and our market-leading Software as Service capabilities in Intelligent Platform Services, ensures that we provide our clients with value, speed, and innovation in every part of their cloud journey.”

As per Paul Daugherty, globally only around 20% of enterprise workloads have moved to the cloud and the remaining 80% are yet to be moved; this includes database, critical applications, analytics, infrastructure compute and storage, IoT or data streaming, security, and others. Accenture Cloud First is well-positioned in Europe and the rest of the market to help its enterprise clients in the best possible way to speed and scale.

The Bottom Line: Accenture is growing strong in the European market with significant cloud investments mainly through acquisitions

Globally ~80% of the workload is yet to be moved to the cloud. Accenture continues to position itself with its strong cloud capabilities and delivery abilities at scale, particularly in the European market. Post its cloud investment announcement (September 2020), Accenture has acquired 10 cloud-based firms across the US, Latin America, UK, Europe, and ANZ markets. It is notable that even with these acquisitions, Accenture may not have invested less than one-third of its allocated investment budget. Accenture is leading and leaning with innovations consistently.

Considering demand triggered by the pandemic for cloud migration and advisory services, these acquisitions are likely only the tip of the iceberg for Accenture. HFS expects to see more cloud-related acquisitions in Europe and Asia Pacific markets in the coming months. We strongly believe Accenture will continue to aggressively build its cloud portfolio to support clients offering services and templates to transition workloads to the cloud and adopt cloud-native development environments.

With an aggressive acquisition strategy, Accenture will put pressure on its competitors to acquire firms of their own as a high growth market is also faced with a talent shortage in experienced, certified professionals. Additionally, as Accenture adds to talent across all major hyperscaler platforms it boosts its ability to advice, develop, and deploy solutions that are multi-cloud and global in nature. What is yet to be seen will be how well Accenture can integrate the best practices and organization structure across all these acquired firms and compel these firms existing clients to remain Accenture clients for the long-term. If it integrates successfully Accenture will continue to hold the leading position in the cloud service market for the coming years too.