Big IT firms acquire small cos with eye on cloud business

Top software services companies are acquiring smaller technology firms to expand their cloud computing business, which has emerged as one of the biggest beneficiaries of businesses having to push activities online because of Covid.

These smaller specialized firms bring in ready talent and tech capabilities that complement the existing expertise of larger companies such as Infosys Ltd, Wipro Ltd and Cognizant Technology Solutions Corp., which have seen a spike in digital revenues, especially from cloud computing.

“Acquisitions are helping IT services companies jump-start and quickly bulk up their cloud capabilities to capture market share,” said Nitin Bhatt, technology sector leader, EY India. “Building in-house capabilities would be time-consuming, and the opportunity cost would be too high. In addition, such acquisitions are helping infuse and grow the cloud DNA in areas that the legacy software companies have been lacking.”