The News: ARMONK, N.Y., Jan. 11, 2021 /PRNewswire/ — IBM (NYSE: IBM) today announced it has acquired 7Summits, a leading Salesforce consultancy with more than a decade of delivering transformative digital experiences across industries. The acquisition extends IBM’s portfolio of Salesforce services and experience design capabilities and further advances IBM’s hybrid cloud and AI strategy. Financial details were not disclosed. Read the full release from IBM.
Analyst Take: While a deal like this won’t attract the press of a Salesforce and Slack tie-up, this is another small piece of the puzzle for IBM’s continued growth–especially in the high demand business productivity software space.
While IBM doesn’t compete directly with CRM and ERP giants like Salesforce, Microsoft, Oracle, and SAP, among others, IBM’s Global Business Services has been continuing to ramp up its capabilities to consult and deliver business software at scale. The 7Summits acquisition appears to put this growth in mind, drafting off the momentum of Salesforce and the increased market demand for its solutions.
Another thing that caught my attention in this deal was the specific attention to the experience gap and IBM’s growing narrative around meeting intelligent workflow designs that drive good employee and customer experiences with software. This sometimes understated capability warrants greater attention as many business applications have exhaustive lists of capabilities, making the design and implementation more important than ever to gain user satisfaction and adoption. In fact, there has been a growing demand for adoption platforms like WalkMe over the past few years to help employees better adapt to and adopt software investments to yield greater returns.
7Summits is able to tout an impressive list of clients, including Harvard University, Mitsubishi Electric, Snowflake, Daltile, Boomi, and Tenable. The company will augment IBM’s existing capabilities, and potentially some of its capabilities may prove synergistic. Having said all of that, I see this as incremental more than exponential–but often smaller deals, like I presume this one to be, can prove to deliver pockets of value that yield scale in the long term.
I also see this having a material role in IBM expanding training and capabilities offerings for Salesforce within its customer base. Over the next three years, the company shared its intention to expand hiring, training significantly, and certifications to support key growth areas for Salesforce, including Tableau, Mulesoft, and Vlocity. As Salesforce has turned its attention to a more hybrid approach, IBM has been focused similarly on this architectural transition. There is likely opportunity to be extracted from these shared values.
This is IBM’s fifth acquisition in the past 30 days, which included its purchase of Nordcloud, Expertus, Instana, and TruQua, in addition to today’s news. These acquisitions have been more incremental and targeted in nature showing the company is continuing to refine its hybrid cloud focus built around the $34 billion acquisition of RedHat.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.