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Major IT outsourcing acquisition will have mixed impact

The announcement that outsourcing consultancy Information Services Group (ISG) will acquire competitor Alsbridge marked the biggest MA 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.

[ Related: Cloud services now account for a third of IT outsourcing market ]

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. “

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