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25 January 2022: IBM has announced its acquisition of Sydney-based data analytics software company Envizi. In an official press release, the move was finalised to boost IBM’s capabilities to provide environmental, social and governance (ESG) analytics, which is an emerging specialised field.  

Envizi will be integrated with IBM’s existing package of manufacturing and supply chain solutions such as IBM Maximo, IBM Sterling, IBM Environmental Intelligence Suite (EIS) and IBM Turbonomic to support feedback automation in their operations and corporate environmental initiatives. 

Why it’s Important.

IBRS has observed increased activity by large vendors acquiring small, local Australian enterprises that specialise in data analytics. Some of these include the following:

  • Fujitsu’s acquisition of Melbourne-based data and analytics firm Versor in 2021
  • Cognizant’s 2021 purchase of Sydney-based Servian, a data analytics and AI vendor
  • Healthcare tech firm Beamtree’s acquisition of New South Wales-based comparative analytics enterprise Potential(x) in 2021
  • Accenture’s 2019 purchase of Australian big data and analytics consultancy Analytics8 then its series of acquisitions involving advanced analytics firms overseas such as Bridgei2i and Byte Prophecy in India, Novetta Solutions and End-to-End Analytics in the United States, as well as PRAGSIS BIDOOP in Spain.

Aside from these, acquisitions of data analytics startups by other firms outside of Australia have become prominent in the industry with the likes of Capgemini on Sweden-based Advectas, Genpact on Enquero, and Infogain on Absolutdata, which were all formalised in 2020.

IBRS believes that while it is beneficial for the industry to have vendors expand their analytics capabilities, customers or enterprise partners need to constantly assess the likely impact on their existing service contracts with analytics partner vendors. Some of the areas that are critical include terms and conditions, possible pricing changes, future services, contracted support and personnel changes, among others.

Who’s impacted

  • CIO
  • Development team leads
  • Business analysts

What’s Next?

Organisations need to be prepared for their analytics partners to be the next targets for acquisitions. As part of its strategy, organisations must remain vigilant and engaged with their analytics vendor partners regarding any acquisitions and the potential impact on services and costs. This includes assessing the implications of the potential scenarios that are most likely to occur, as well as the risks or opportunities that may be present with regard to adjusting to ramifications to the existing service, if there are any. Some potential risks or challenges that must be reviewed by the organisation’s legal and procurement teams can be found on this checklist.

Finally, organisations need to be cautious on assurances that are critical to their operations if these have not yet been put into written agreement. Becoming more pragmatic about the new vendor will minimise service disruptions in the future.

Related IBRS Advisory

  1. Mergers & acquisitions require federated service providers governance
  2. Mergers and Acquisitions - Devising the Right Strategy for IT