With the advent of more digital product development, the overall product engineering now includes more software components and also produces deep insights about the users and the health of the product, enabling more applications of software product engineering. To keep up with this trend, Infosys acquired Kaleidoscope Innovation in September 2020 to expand its software product engineering expertise across the US. Kaleidoscope Innovation is a full-service insight, design, and development firm present across medical, consumer, and industrial markets for over 30 years. The acquisition is expected to close during the second quarter of fiscal 2021, subject to customary closing conditions.
Kaleidoscope Innovation blends “human element” and technologies to deliver its services
Kaleidoscope Innovation provides full-spectrum product development services including Insights, Design, Human Factors, Engineering, Visualization, and Software Development. It also has an Advanced Prototyping Lab, Virtual Reality Lab, Electro-Mechanical Lab, and Test Lab among others for product innovation, testing, new customer experience creation, and client co-innovation. The capabilities of the company focused around the medical, consumer, and industrial product design, are shown in Exhibit 1. Kaleidoscope Innovation excels particularly in the human elements of the designs i.e. user experience, usability goals, aesthetics, user engagement features, etc.
Exhibit 1: Kaleidoscope Innovation has end-to-end capability in the Medical, Consumer, and Industrial domains
Source: Kaleidoscope Innovation, 2020
“Device engineering for both the consumer and medical industries has been a critical success parameter for our clients. The addition of upstream concept design and human factors engineering, through this acquisition not only provides us end to end capability, but also creates an engagement engine dedicated towards innovation and growth in this sector.”
Nitesh Bansal, SVP & Global Head of Engineering, Infosys
The vertical capability of Kaleidoscope Innovation and the digital capability of Infosys creates synergy in this acquisition.
The advent of digital technologies is accelerating new development trends, including more digital-oriented product development (connected products), a new way of development (agile, digital twin), enriching customer experience (applications of AR/VR), and providing customer-centricity (personalized experience). Kaleidoscope Innovation will benefit from Infosys’ capability in these digital areas.
“We are enthusiastic about our exciting new partnership with Infosys. It allows us to scale quickly and bring expanded offerings in AI, Analytics, and Digital Infrastructure to our clients.”
Matt Kornau, CEO & Co-Founder, Kaleidoscope Innovation
As COVID-19 has changed the existing operating model and customer interaction across industries, so Infosys will benefit from the vertical expertise in the Consumer and Industrial sectors of Kaleidoscope Innovation. Also, initiatives have increased in the medical sector due to the pandemic. Kaleidoscope Innovation can also leverage Infosys’ software product engineering expertise across industries, global reach, and existing client relationships.
“This acquisition further strengthens our digital offerings at the intersection of new software technologies and medical devices – a sector that is expected to witness significant investments and consumerization in the post-COVID era. Our clients will benefit from the combination of Kaleidoscope’s strong upstream offerings of product innovation and design, and Infosys’ stack of product engineering, validation, and commercialisation services at a global scale.
Ravi Kumar, President, Infosys
Software product engineering remains the bright spot in engineering services
This acquisition is another example of a competitive trend we’ve noticed among its peers in the Software product engineering space over the past year, including:
Though the above-mentioned acquisitions are broad i.e. encompasses several verticals, Infosys is taking a more vertical-specific approach for the acquisition. For example, Tin Roof Software works across a range of industries, including telecom, media and entertainment, financial services, retail, hospitality, consumer products, travel, logistics, and transportation. So, Infosys can focus on targeted applications in the three verticals (for example, virtual store simulation, medical device design, etc.) through this acquisition.
Bottom Line: The acquisition can be instrumental to complement Infosys’ IoT, Industry 4.0, and overall engineering capability
The software engineering capability of Kaleidoscope Innovation is instrumental for process innovation, platform engineering, and application development that are critical elements for digital and engineering transformations across industries. So, Infosys can leverage this capability across its global engineering client portfolio. Also, Kaleidoscope Innovation’s 30+ years of domain experience and strong client foothold in North America are strong assets for Infosys. So upon successful integration, Infosys can further extend its engineering portfolio in the North America region with strong vertical capability.
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