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2 Ways Accenture Plans to Boost Growth
Posted by: ICRAOnline (IP Logged)
Date: April 14, 2014 10:08AM
Outsourcing and consulting giant Accenture (ACN) reported second-quarter performance (ending February) that was not very encouraging mainly due to lower pricing and a tough spending situation in its consulting business. But growth in new bookings (in both consulting and outsourcing businesses) raised some hope. And now the company is trying hard to capitalize on opportunities in two growth areas to strengthen its revenue streams. Let’s see how.
Expanding Mobility Offerings
Accenture has teamed up with a tech start-up, Crittercism, specializing in developing mobile Application Performance Management (mAPM) solution. The solution helps firms (those that develop mobile applications or apps) to assess the performance of their apps across various mobile devices, networks and operating systems. The performance analysis, in turn, helps them to form strategies for advanced mobile apps. Currently, Crittercism manages around 1 billion monthly active users (MAU), which has grown 10 times since 2012 — the year it was born.
As per the deal, Accenture will resell Crittercism’s mAPM solutions. But the consulting giant plans to benefit from this deal in a bigger way.
Accenture has a wide range of offerings in the enterprise mobility space, starting from idea generation to development to monetize to management of the app. Crittercism’s mAPM solution will be a perfect match for Accenture as it will complete its mobile application portfolio and give its customers a one-stop-shop experience.
Importantly, Crittercism’s client list consists of some big names like Netflix, LinkedIn, Yahoo, Home Depot and AT&T. No doubt Accenture’s client list would grow too.
Mobile applications play a big role by connecting businesses with their customers and workforce. And Accenture is using its experience to build mobile app strategies for customers. Recently, Accenture’s credibility in delivering mobility solutions was recognized by IDC, a market research firm. The firm positioned Accenture as a global leader in providing Mobile Application Development, Testing, Management and Infrastructure Services. The tie-up with Crittercism is poised to take Accenture higher.
Betting Large on Cloud
Accenture is going to be a comprehensive provider of cloud solutions very soon — thanks to the growing demand. Last month, Accenture further strengthened its 30-year business relationship with German software solutions provider SAP (SAP) and will develop customized cloud solutions for different sectors. And now it is joining hands with Ariba, a wholly owned subsidiary of SAP, to deliver cloud-based business process outsourcing software, targeting financial services and accounting sectors.
Accenture is also partnering with Orange Business Services, an arm of French Telecom, specializing in cloud-based communications solution for multi-national entities. With Orange, Accenture will be able to support large firms lay out cloud strategies, develop infrastructure and applications that will help them to smoothly transition into the cloud eco-system.
Association with SAP, Ariba and Orange is expected to open new avenues for Accenture, most importantly in Europe. Europe has been hit by debt issues, and more recently, by the Ukraine crisis. Yet, experts are hoping cloud spending to rise as companies will be more eager to keep costs low by transitioning to cloud.
Accenture is already witnessing order flows in the fields of SaaS (software-as-a-service) and IaaS (infrastructure-as-a-service) — two most important cloud platforms. And that is the reason why Accenture plans to hire more people at its UK office to serve the growing appetite of the region’s enterprises. A leg-up in Europe will also keep Accenture ahead of its fierce rival IBM.
In the past quarter, Accenture was wary about its consulting business and mentioned that the business could continue to show weakness. But with a revamped mobile application portfolio, Accenture could expect more consulting deals. Its growing exposure in cloud will be beneficial going forward. Every firm is trying to move into the cloud environment to keep operating costs low and improve profitability. Accenture could become the preferred choice as companies look for expert advice to transition their businesses.
Stocks Discussed: ACN, SAP,