Indian IT Firms Are Keeping Eye On Technology Companies In The US

Cooky - Jul 14, 2019

These IT companies are also aiming to develop areas with high-growth potential.

At the beginning of this month, US-based International TechneGroup Incorporated (ITI) was bought by Wipro for $45 million, and this doesn't seem to be a one-off.

Wipro has acquired ITI for $45 million.

Some analysts say many IT companies are planning to expand into advanced fields like engineering services. Besides, these companies also aim to develop areas with high-growth potential, including technology-centric factories, IoT, and software engineering. However, their internal capabilities are qualified enough, and so they have to buy niche firms to support the system.

In recent weeks, five firms focusing on engineering services and digital technology have been acquired by these Indian IT majors. Wipro bought ITI, Hexaware spent $180 million to buy Mobiquity, and Cognizant became the owner of Zenith Technology without announcing the price.

The value of Wipro can be increased by ITI, while design and product engineering are the strength of Mobiquity which has famous clients such as Amazon or Philips.

As per Everest Group CEO Peter Bendor-Samuel, the most rapidly developing segments for the large technology service companies are engineering services.

In the fiscal year 2019, more than 500,000 staffs worked for 1500 engineering R&D companies, and the engineering services export reached $24 billion. Indian companies account for more than 28% of the global ER&D market, according to industry lobby group Nasscom.

Thanks to these acquisitions, HCL Technologies, Tech Mahindra, and several other technology companies have owned important transactions in digital fields. A few years ago, to promote the development of the engineering service business, HCL Tech spent $ 285 million to acquire Geometric and Butler Aerospace.

IT-tech-mahindra — Recently, Tech Mahindra also acquired Inter Informatics

Pareek Jain - founder of Pareekh Consulting said Tech Mahindra succeeded in a multi-year aerospace engineering transaction from Airbus by acquiring Czech Republic-based cabin design engineering firm Inter Informatics last year.

According to Bendor-Samuel, these acquisitions are believed by analysts to bring long-term results. However, until when this niche firm supports IT service firms create their own identities, we can see the real benefits of them.