Accenture Acquires German Based Umlaut to Bolster Engineering Services

Global IT giant Accenture acquired Umlaut, an engineering consulting firm based in Aachen, Germany, on 14 June 2021. According to an official statement, this acquisition will help Accenture boost its deep engineering abilities so companies can use various digital technologies like artificial intelligence, cloud, 5G, et al. The financial specifics of this acquisition are yet to be revealed.

A close look into the matter

Per the acquisition details, Accenture will now onboard 4,200 Umlaut employees across 17 countries into its Industry X services. Industry X deals with IoT (Internet of Things) and smart manufacturing in the aerospace, telecom, defence, automotive, and energy sectors.

Umlaut is the latest in a series of acquisitions Accenture has been carrying out since 2017 to develop Industry X services. It specializes in traditional and digital engineering services, consulting and product development.

Accenture has more recently included Australian technology provider German technology consultant SALT Solutions (September 2020), Brazilian industrial robotics service provider Pollux (March 2021), Electro80 (May 2021), and more.

Accenture’s focus on the engineering services market

Compared to IT and BPO, the engineering services sector has been registering tremendous growth in the past couple of years. It is one of the fastest-growing sectors, recording double-digit growth even before this pandemic. This sector is likely to reclaim its burgeoning rise with the help of a massive digital transformation taking place in the backdrop of this pandemic. Realizing the importance of digital engineering services, many firms have started investing in necessary acquisitions.

Initially, Accenture did not have much focus on the engineering services sector. But, there has been a noticeable shift in the firm’s approach over the last few years. It began to make several acquisitions with an aim to develop its engineering capabilities. Till now, Accenture has made a total of 22 acquisitions globally.

Per industry analysts, Umlaut is the largest acquisition for the company in this specific sector. It reported total revenue of $402.6 million in the fiscal year 2019.

How will these acquisitions affect the Indian IT sector?

Until now, Accenture was not a significant player in the Indian engineering services market. However, analysts predict a remarkable impact on Indian IT firms post these acquisitions. Accenture’s entry in this sector will increase the competition among the top Indian IT giants. Experts suggest that the firms should try to build their niche capabilities to maintain an edge among top competitors.

Parting thoughts

Industry X will enable Accenture to further cement its position as a top IT player globally. It has been developing and extending the Industry X services to capture the future market that’s dominated by artificial intelligence.

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