Major IT outsourcing acquisition will have mixed impact

Information Service Group’s purchase of competitor Alsbridge creates a larger, more well-rounded outsourcing advisory, but will also reduce competitive pricing leverage for clients.

The announcement that outsourcing consultancy Information Services Group (ISG) will acquire competitor Alsbridge marked the biggest M&A announcement in the IT services advisory industry since KPMG bought EquaTerra in 2011. The two large independent outsourcing advisors are joining forces to create a 1,300-person firm with offices in 20 countries revenues targeted at between $285 and $300 million in 2017.

The combined firm, with its expanded services, data and market intelligence, could put pressure on the big consultancies who offer IT outsourcing advisory services. “ISG’s principle competitors — KPMG. Deloitte, EY and PwC — now have a bigger, badder ISG to contend with that can not only undercut them on fees but also can boast competencies in the emerging area of RPA, where the Big Four are currently winning out,” HfS Research CEO Phil Fersht recently wrote in a blog.

The upside and the downside of an ISG Alsbridge merger

But, more importantly, the joining up of these two major players will have an impact on buyers of IT outsourcing advisor services. On the plus side are those additional competencies ISG brings on board with its purchase of Alsbridge. “
“The combined capabilities of ISG and Alsbridge are formidable,” says Lee Coulter, senior vice president of Ascension and CEO of their shared services subsidiary “This deal adds a strong BPO and growing automation services capability to ISG. I think it is a good fit operationally and geographically.” ISG had made several smaller acquisitions over the last six years as well. “For loyal clients of both ISG and Alsbridge,” says Fersht, “most will have a larger pool of talent to help them. “

However, on the downside, this merger will remove one of the only remaining large competitors from the IT outsourcing advisory landscape, eliminating some competitive pricing pressure from the market. “Those who loved to trade off ISG and Alsbridge to get their fees lowered will have to resort to really small firms like Avasant and Aecus as alternatives, who are good at some things, but will often struggle to scale up to meet client needs,” Fersht says.

The new ISG will serve more than 700 clients, including 75 of the 100 largest enterprises in the world. Efficiencies gained by combining the two firms will produce an estimated $7 million in cost savings in the first 18 months, according to ISG. Some new or bolstered services that Alsbridge will bring include telecommunication sourcing, audit, and transformation services and robotic process automation (RPA) assessment and implementation. Of course, the larger firm will also continue to advise on outsourcing deals; ISG and Alsbridge are currentlyinvolved in approximation $18 billion of transactions globally.

IT and business service advisors will remain important to enterprises for some time, says Coulter. “As integrated IT and business services offerings become mainstream, companies are going to continue to need advisory to help them navigate the complexities of complex business services relationships,” he says. “The advisors will need to focus on growing their capabilities into helping organizations do the business process transformations necessary to take advantage of new super nimble cloud based business services. To continue to thrive, advisors will have to be competent across technology, security, business process and process automation and transformation.”

Source: Cio.com-Major IT outsourcing acquisition will have mixed impact

Advertisements

Business partner agreement: Protect your investments

When starting channel businesses, making the wrong decisions about the business partner agreement and entity selection can have severe consequences later on down the line.

Starting your own channel business may be a journey best not gone on alone, as business partnerships can greatly increase your chances of financial survival. However, entrepreneurs can make several mistakes at this early stage of the process, such as failing to set down the necessary ground rules in a business partner agreement.
“If you’re an entrepreneur starting your own business, doing it on your own will put you at a disadvantage,” said Michael Corey, president of Ntirety Inc., a database services company based in Dedham, Mass., and a division of cloud company Hosting Inc. “Every study that I’ve seen has shown that a business is more likely to succeed if there are partners involved.”

The advantages of going into business with partners are numerous, but Corey cited one of the most important as having someone there to give you a break. “The first thing anyone who goes into entrepreneurship is going to learn is it’s not a 40-hours-a-week job. It’s an 80-hours-a-week job. So, at least with a partner, you have that benefit of taking a break … and knowing that when you come back, the business is still going to be there, and, more importantly, there’s somebody in the business that cares about it as much as you do,” Corey said.

Another benefit is that partnerships can broaden your business’s reach in terms of business contacts, skillsets and capabilities, he added.

Partnerships can have their disadvantages, of course, if you’re unprepared for scenarios that can crop up later on. For example, your business partner’s attitude about the work can change after the business begins to thrive. “Now all of a sudden the business is doing well and one of the partners says, ‘You know, I don’t have to work so hard anymore,'” Corey said.

“I think a common mistake is [to say,] ‘We’ll just split the profits,'” he added. “Well, that sounds good and you finally have those profits and you split them, but four years later you’re still splitting the profits, but you’re the guy who’s working 80 hours a week and the other guy’s working 40 hours a week. You’re not going to feel too good about that.”

Prepare for the worst in a business partner agreement

David Streit, principal and owner of Stephill Associates LLC, an IT services company based in New Jersey, has had a successful solo career as a managed services provider (MSP), opting to work with only the support of independent contractors and through collaborations with peers. He also relies on the support he receives from industry organizations like the ASCII Group and its resources like ASCII Link, an open forum for MSPs to share industry insight and advice. He said he’s in the process of forming an accountability peer group with another ASCII Group member who is located in Virginia.

I think, too often people don’t have these conversations and then they get burned by it in a big way.

Even if Streit has managed to work successfully on his own for 14 years, he admitted he can’t help but sometimes wish he had a partner to have grown with. At the same time, “the problem with partnerships is that most of them break up,” he said.

Many life situations could potentially break up a partnership, so at the outset partners must consider and discuss various hypothetical events that could occur and what should happen as a result. These events include the death of a partner, a partner becoming disabled, and a partner getting a divorce or deciding to leave the business, Corey said, or what he calls “The Four Ds.” “I think, too often people don’t have these conversations and then they get burned by it in a big way,” he said.

In Corey’s opinion, partners should first address these scenarios and set expectations in an informal “kitchen table” discussion before launching the business.
Dan Liutikas, managing attorney at InfoTech Law Advocates P.C. and chief legal officer and secretary at CompTIA, said in this early stage partners should determine the management structure of the company and equity of each partner. Management authority and company ownership are not the same thing, so these need to be treated separately. “Once you’ve identified those areas in terms of authority, then you get into areas” like deciding how an LLC’s membership units or a corporation’s shares of stock get transferred, Liutikas said. “There are a number of areas related to contingencies on the transfer of ownership that you really want to provide for in … a buy/sell agreement.”

Business partners must also select the entity of their company — a decision that many channel partners fail to give serious thought to, in Liutikas’ opinion. “Unfortunately, many of these [entity] selections become a little bit too commoditized and people don’t select the correct entity for what they’re actually trying to accomplish, which produces poor tax consequences for them,” he said. “It really doesn’t lend itself to templating and that sort of thing.”

The selection of an entity, whether it is corporation, LLC or limited partnership and so forth, will affect how the partnership is documented, he said. For example, corporations are far more statutory compared to an LLC, which tends allow for more flexible definitions of the partnership relationship.

“A lot of folks pick an entity because they know somebody else who has it, or because somebody said, ‘LLCs are a good way to go.’ But oftentimes there isn’t a full analysis done as to why you are choosing a corporation versus an LLC. … It’s entirely fact-specific in terms of what kind of business you’re going to run, as to why you choose one over another. And then of course there are tax consequences that run through those,” he said.

Other important decisions partners need to make include whether their business is going to be a lifestyle business or built to sell later on. “You don’t want one partner seeing all this profit and wanting to pull it out and the other partner wanting to reinvest it. You have to have a common vision of what your end game is,” Corey said.

Partners should also figure out a plan for compensation and at what point they can start taking money out of the business.

The value of a good consultation

With so many contingencies and aspects to consider, how are partners to cover all their bases when making decisions about their business and developing the business partner agreement? For Liutikas, it “starts with a good [legal] consultation on what entity would make the most sense for you and then preparing the appropriate documentation for it.”

In the lean, early days of a partnership and channel business, it may be hard for partners to take the appropriate measures to protect their investments. In Liutikas’ experience working with entrepreneurs, he’s observed a lot of people will bootstrap their way until they can get their business going. But trying to cut costs on initial consultations could have regrettable consequences in the long term.

Liutikas said it’s uncommon for solution providers to have received appropriate consultation under entity selection. “I think a lot of folks view entity as one of those simple legal items, and they both hop up on the state website and register with an entity, or they use one of the online services that are out there — ‘$99 gets you an entity.'”

Choosing the wrong entity can cost companies thousands of dollars in additional taxes later on — “all for saving potentially an extra $500 to $1,000 at the outset,” he said.

Source: TechTarget-Business partner agreement: Protect your investments by Spencer Smith

Microsoft Azure partnership with HPE: Channel reaction

News analysis: The recent alliance between Microsoft Azure and HPE could eventually open opportunities for the channel, but appears to have minimal short-term impact.

The Microsoft Azure partnership with Hewlett Packard Enterprise promises to give channel partners greater opportunities and more tools to win over customers to the companies’ newly released hybrid cloud products and services.
Of interest to channel partners are plans to have Microsoft join the HPE Composable Infrastructure partner program to improve the automation and integration of Microsoft System Center and HPE OneView orchestration tools with today’s IT infrastructure, while also ramping up plans for next-generation infrastructure.

To help customers’ hybrid cloud migration projects, Hewlett Packard Enterprise (HPE) has joined Microsoft programs to assist with the adoption of mobility, identity and productivity features. For example, HPE will sell Microsoft cloud offerings across Azure, the Microsoft Enterprise Mobility Suite and Office 365 through its participation in Microsoft’s Cloud Solution Provider program.

The partnership faces stiff competition from Amazon Web Services (AWS), and Dell’s acquisition of EMC will impact the range of choices partners and customers will have in the year ahead. In a cloud services market where consolidation is rampant and new offerings are being introduced frequently, companies’ positive projections for their cloud products and services can quickly evaporate leaving channel partners in the lurch.

Microsoft Azure partnership: Background

The extended Microsoft Azure partnership, in which Microsoft’s offering emerges as HPE’s preferred public cloud partner, follows HPE’s decision to exit the public cloud. After almost two years into its Helion Public Cloud initiative, the company announced that on January 31, 2016 it will sunset the HPE Helion Public Cloud and terminate customer agreements for public cloud services.

The HPE-Microsoft Azure alignment will certainly legitimize and support the Azure message that partners like Accelera are taking to market.
Joe Brown
president and co-founder, Accelera Solutions
The company’s public cloud uptake appears to have been limited. Research firm IDC was unable to quantify Helion’s adoption among enterprise customers as a definitive percentage.

“We primarily measure public cloud and HP does not even come on the public cloud radar,” said Larry Carvalho, IDC analyst covering platform as a service (PaaS).

Carvalho noted that HPE and Microsoft Azure are playing catch-up to AWS.

“Azure is behind AWS right now in IaaS (Infrastructure as a Service) and PaaS functionality. However, in some ways HPE gets the benefit of bringing Azure to the enterprise so HPE gains a lot out of this partnership,” Carvalho said.

Partner reaction

One Microsoft Azure partner seeking to find the best cloud offerings for its clients is Syntel Inc., a cloud provider headquartered in Troy, Mich. Reacting to news of the partnership, Ashok Balasubramanian, head of the Services Transformation Group at Syntel, would only say that finding the right products and services from multiple cloud vendors is a practical approach to providing cloud offerings.

“Syntel is ‘product agnostic,’ so we do not endorse one product over another. Our goal is to choose the most suitable tool to meet our clients’ business needs,” Balasubramanian said.

Joe Brown, president and co-founder of Accelera Solutions, a cloud solutions provider based in Fairfax, Va., said he is encouraged by the alignment between HPE and Microsoft but noted that he isn’t expecting miracles. Accelera partners with Microsoft.

“The HPE-Microsoft Azure alignment will certainly legitimize and support the Azure message that partners like Accelera are taking to market,” Brown said. “I don’t expect it to create any real revenue contribution or change the way we’re selling or marketing.”

What impact will the Microsoft Azure partnership have on HPE and Azure partners?

Source: TechTarget-Microsoft Azure partnership with HPE: Channel reaction  by Nicole Lewis

Blackberry to acquire Good Technology

Enterprise mobile device vendor BlackBerry has announced that it has entered into a definitive agreement to acquire mobile security provider Good Technology.
Good Technology is a mobile security provider headquartered in Sunnyvale, California, United States. The company says it has more than 5,000 enterprise customers worldwide in industries such as financial services, healthcare, manufacturing, energy and utilities, legal, government, and technology.

According to Blackberry, the acquisition means that Good will be a part of BlackBerry’s strategy to offer customers the most complete, end-to-end solution that secures the entire mobile enterprise – across all platforms.

“Enhanced by Good, BlackBerry will expand its ability to offer a unified, secure mobility platform with applications for any mobile device on any operating system – supported with security that has been certified by governments around the world embedded in every component of the mobility infrastructure,” the company said in a statement.

“Good’s technology will integrate with BlackBerry’s enterprise portfolio and trusted global network.

“The BlackBerry product platform and Good Dynamics Platform are very complementary – which is why combining them makes so much sense. BlackBerry’s leadership in MDM, application management and secure connectivity combined with Good’s leadership in mobile containers, productivity suite, service management and SDKs will create a higher-value product stack with the capability to expand well beyond EMM collaboration and application enablement. Our complementary capabilities will provide the most comprehensive mobile platform in the market and deliver more value to your organisation.

“With BlackBerry’s growing portfolio of value added services, we have the most secure platform for mobile communications with the broadest portfolio of services that includes secure voice and messaging, enterprise identity and virtual SIM, just to name a few.

“This portfolio will be enhanced with the addition of more than 2,000 ISV and custom apps that are supported by Good on Good Dynamics and through its partner program.”

Blackberry expects the transaction to be completed in the company’s 2016 fiscal third quarter, which ends in late November. It is subject to customary closing conditions, including regulatory approvals.

Source: itwire.com-Blackberry to acquire Good Technology

BlackBerry buys Good Technology to boost mobile security

BlackBerry will give BES a big boost with Good Technology’s cross-platform capabilities as the EMM market consolidation continues

BlackBerry is giving its EMM platform a major boost by acquiring one of its biggest competitors, creating a formidable alliance in mobile security.

BlackBerry will acquire Good Technology Inc. of Sunnyvale, Calif., one of the largest remaining vendors of enterprise mobility management (EMM) technology with around 6,200 worldwide customers, for $425 million in cash. BlackBerry hopes to close the deal by the end of its fiscal third quarter in November.

Good is best known for its mobile email container technology and security capabilities, and often battled against BlackBerry Enterprise Service (BES) for some of the same EMM turf in highly-regulated industries.

BlackBerry sees itself providing “one unified platform” for EMM once the acquisition closes, said BlackBerry CEO John Chen on an investor call regarding the deal. Good Technology customers should expect no changes in their products and support as a result of the acquisition news and the company plans to provide more information to customers as the deal gets closer to being finalized, said Good CEO Christy Wyatt in a statement.

The acquisition is a sign that BlackBerry is progressing in the EMM space, said Denny Bono, IT manager for American Crane & Equipment Corp. in Douglassville, Penn.

“Good was a very large competitor for BES, so I think it’s a big win for both companies in the long run,” said Bono, who uses BES 12.

[BlackBerry] hit their low, but strategically they are headed in the right direction.
Patrick Moorhead
President and principal Analyst of Moor Insights & Strategy
BlackBerry needed to reinvigorate its EMM offerings and with its customer bases very much in line, the combined company can “really own the federal market,” said Eric Klein, senior mobility analyst with VDC Research Group in Natick, Mass.

“This deal creates a de-facto standard for regulated industries and government,” said Bob Egan, CEO and chief analyst of the Sepharim Group in Falmouth, Mass. “There are also some product features in the [Good] mobile enterprise app store that will fill a pretty big gap in BlackBerry’s portfolio.”

The sale price of $425 million is far lower than the $1.54 billion VMware paid for then-independent EMM vendor AirWatch in early 2014. The BlackBerry move leaves MobileIron Inc., which went public last year, as the largest remaining independent EMM vendor.

The current state of the EMM market could be to blame for the lower sale price, Klein said. MobileIron, for example, missed its revenue estimates earlier this year, a potential measuring stick for this deal, he added.

Why BlackBerry acquired Good Technology

BlackBerry finds BES and Good to be “extremely complimentary” platforms and was attracted to Good’s mobile application management and app wrapping capabilities, its native Apple iOS container and its Good Dynamics platform mobile analytics features, Chen said. He added that 64% of Good’s activations are on iOS devices.

“Good has one of the most comprehensive patent portfolios in the space as they’ve acquired a lot of companies along the way,” Klein said. One of those acquisitions included BoxTone in 2014, where Good shored up its mobile service management offerings.

BlackBerry continues to fill gaps in BES through acquisitions. It bought WatchDox, an enterprise file sync-and-share vendor, in April to add mobile content management features it lacked.

The acquisition is further evidence of BlackBerry’s attempts to transform from a hardware manufacturer to a software and services company, and possibly that the company’s finances are turning around after several years of losses.

When Chen took over as CEO in 2013, he had a lot of work to do to reverse the company’s fortunes and that included “trimming the fat” to pare down expenses, said Rick Jordan, director of strategic alliances at Tenet Computer Group Inc. in Toronto, a BlackBerry Platinum level partner for over 15 years.

“Chen has taken the approach of, ‘It’s a big ship, and it will take a while to make the turn,'” Jordan said. “They really solidified themselves, especially in government, from what we’re seeing.”

BlackBerry is not out of the woods yet and there’s a difference between how great a product is and how well the business performs financially, said Patrick Moorhead, president and principal Analyst of Moor Insights & Strategy, a tech analyst firm based in Austin, Texas.

“[BlackBerry] hit their low, but strategically they are headed in the right direction,” he said. “Duking it out with the likes of Apple and Samsung is a losing proposition that hopefully they accepted. I think based on their position in the data center and Good’s position with mobile devices; they have a shot at making this thing work.”

Source: searchmobilecomputing-BlackBerry buys Good Technology to boost mobile security by Ramin Edmond and Jake O’Donnell

Managing change in SAP: reducing cost and risk with DevOps

Why are traditional development and deployment processes unfit for the demands of the modern software lifecycle? Let’s count the reasons:

  • Approaches that work for 18-month release cycles do not work for new, shorter cycles
  • Manual processes are too error-prone and inefficient
  • More people would need to be added to keep up with release
  • And more

To do more with less while producing higher quality software, savvy organizations are creating more collaborative teams to balance business, development, operations, and testing. This approach is called Dev Ops.

In this informative resource, learn more about the DevOps approach, and explore the benefits you could experience by switching to automated release and deployment, including a faster pace of delivery, better management of complexity, and adherence to regulations and audits.

Read the Whitepaper at: Managing change in SAP: reducing cost and risk with DevOps 

Managing change in SAP: reducing cost and risk with DevOps

Infosys buys U.S. automation tech firm for enterprise value of $200 million

(Reuters) – Infosys Ltd said on Monday it would buy Panaya Inc, a New Jersey-based provider of automation technology, for an enterprise value of $200 million as India’s second-biggest IT outsourcing company bets on new technology to boost growth.

Under Chief Executive Vishal Sikka, Infosys has been making big bets on automation and other new technology like artificial intelligence and cloud-based services as the company tries to regain some lost ground from rivals like Tata Consultancy Services.

“The acquisition of Panaya is a key step in renewing and differentiating our service lines,” Sikka said in a statement.

“This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients,” he said.

(Reporting by Nivedita Bhattacharjee in Mumbai; Editing by Gopakumar Warrier)

Source: Reuters- Infosys buys U.S. automation tech firm for enterprise value of $200 million

Choose the right software testing service

Learn about tips for choosing a testing service and whether it makes sense to test outside the business.

Testing services offer software application providers increased flexibility and testing variety in skill levels and hardware, at a reasonable cost or at least a variable, menu-driven cost. Testing services provide business value, but you need to consider security, confidentiality and control of resources. This article serves as a brief overview of the advantages of testing services and provides tips on security, test management and ensuring business value.

Testing service companies are cropping up all over the world and offer an impressive variety of testing options. Many large software vendors offer specialized testing services. Both independent and vendor-supported testing services appear to be growing rapidly.

Most testing service companies focus on providing manual test execution at the end of the development cycle — in other words, beta testing assistance. However, many offer manual testing services during any phase, including requirements review and test case development. Several also offer automated test development for planning, coding and execution.

Many of these companies have in-house teams of software test professionals, and several are conglomerations of independent contractors working literally anywhere there is an Internet connection. When managed well, a distributed group of independent contractors can be an attractive method of providing a variety of test locations, access points and devices. It may be the only way some development teams can quickly test a large variety of situations using multiple devices on different systems

Read more at: Techtarget-Choose the right software testing service by Amy Reichert