IT services firms follow acquisitions path to grow cloud biz

Bengaluru: Top IT services companies are increasingly acquiring smaller cloud firms as a strategy to grow their cloud business, which has accelerated as clients embraced digital transformation during the pandemic.

These specialized firms bring in ready talent and technology capabilities that complement their existing domain expertise during a time when companies like Infosys Ltd, Wipro Ltd and Cognizant Technology Solutions Corp. have seen their digital revenues spiking, especially from cloud.

“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.”