Acquisition poised to strengthen Cognizant’s digital capabilities
On January 27, 2016, Cognizant (CTSH) announced its acquisition of KBACE Technologies, a privately held consulting and technology services company specializing in cloud strategy, implementation, and integration. KBACE has one of the largest reference bases of “Oracle Cloud Application” customers globally and is a leading partner for Oracle (ORCL) as well. The terms of the acquisition were not disclosed.
Cognizant believes this acquisition will strengthen and expand its digital capabilities as firms are now moving critical business applications to cloud-based IT infrastructures. This will not only reduce costs and complexity for enterprises, but it will also improve business agility.
Cognizant has been increasingly looking to get a foothold in the cloud computing space. This, however, will be difficult, as tech heavyweights such as Amazon Web Services (AMZN), Microsoft (MSFT), and Rackspace have dominated the public cloud segment as the above chart shows.
400 KBACE consultants to be a part of Cognizant
According to the acquisition agreement, approximately 400 KBACE consultants and implementation experts across business functions will be a part of Cognizant. “The addition of KBACE Technologies and expertise in delivering SaaS digital solutions accelerates Cognizant’s cloud strategy and consulting services, provides our clients with access to significant platform expertise and puts us at the forefront of Oracle Cloud partners and technology consultants worldwide,” said Allen Shaheen, executive vice president of Cognizant. “KBACE consultants are some of the most talented and experienced in the industry with many regarded as the predominant subject matter experts in their area.”
Cognizant accounts for 1% of the iShares US Tech ETF (IYW), whereas IBM accounts for 3.5% of IYW.