Infosys acquires SAP consulting firm Axon Group for £470 Million!

And so it begins…

An acquisition of this kind, whereby one of the Indian IT giants acquires a sizeable Western IT services provider, has long been predicted.

Factors such as currency fluctuation, employee churn and the rise of alternate offshore destinations are threatening to curtail the phenomenal success of the Indian IT outsourcing industry.

Companies such as Infosys, Wipro and TCS are therefore eager to increase the value of the contracts they can offer their Western clients, moving from application development donkey-work to the kind of consultative partnership that the likes of Accenture and IBM have with their clients.

To do this, however, requires local presence and a caliber of consultant that their vast software campuses are not yet geared to producing. And while they have cash in reserves and the rupee is strong, now is an ideal time for Indian IT providers to buy those in.

Analysts predict that Infosys’ Axon deal will be the first of many ‘outbound’ acquisitions by Indian IT companies.

"We expect such a trend to continue and we believe the transaction by Infosys would act as a catalyst for similar moves by other Indian IT companies", Manoj Agarwal, ABN AMRO's Head of Investment Banking for India told The Economic Times.

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