Published on the 23/11/2023 | Written by Heather Wright
Global giant gains contemporary cloud engineering…
Accenture has acquired Kiwi IT services provider Solnet in a deal which provides the global giant with more contemporary cloud and infrastructure engineering capability, and providing customers with a full continuum of technical capabilities to accelerate digital transformation.
All 115 of the Solnet solutions team will move within Accenture.
The deal, for an undisclosed sum, does not include Optimise Me, which provides SME open source ERP solutions. That business and its eight team members will remain with the current shareholders.
“This really bolsters what we can do with clients around modernising platforms and systems and rebuilding digital cores.”
Peter Burns, who leads Accenture’s business across Australia and New Zealand and is also on the company’s global management committee, told iStart New Zealand is a growth market for Accenture.
“New Zealand is an incredibly significant market for us, not only within A/NZ but within what we call ‘growth markets’ – which is effectively everything outside of Europe and the US.
“We really see New Zealand as one of our highest growth opportunities and that’s a partly given the innovative nature of New Zealand business and also unquestionably the substantial amount of change that government is facing into over the next few years,” he says.
Burns says while Accenture already has a large practice in New Zealand, its heritage is in strategy and consulting and its technology has been ‘very much’ underpinned by core platforms like SAP.
“What Solnet brings is much more of that contemporary cloud and infrastructure engineering capability,” he says.
“With many of our large ecosystem partners like Microsoft and AWS bringing capability to New Zealand, this really bolsters what we can do with clients around modernising platforms and systems and rebuilding digital cores.
“In this day and age that is incredibly important for productivity and efficiency in terms of driving agility and innovation into many of the customers that we are dealing with. And New Zealand is very much at the forefront of some of those innovations, whether that is across our financial services clients, our government clients, the health arena, or even into the leadership roles New Zealand plays in places like agri across the global stage,” he says.
“Solnet has developed an impressive solution design and delivery skillset in this space, and they have a strong heritage of delivering large scale projects. Having the Solnet team join us brings more talented support for our clients to meet their growth objectives and modernise their technology systems for the future.”
The deal comes three years after Accenture’s $40 acquisition of Kiwi SAP and cloud consultancy Zag. That deal significantly bolstered Accenture’s Kiwi revenues, which were up around 67 percent in the first full year post-acquisition, breaking the $200m mark.
Mark Botherway, Solnet managing director, told iStart the deal has been welcomed by all Solnet stakeholders.
“Our staff are really enthusiastic and so are our clients,” Botherway says.
“We’ve had no negative reaction from any of our clients and some of them are extremely enthusiastic. They can see the value of the union.
“We talk about ‘global strength, local heart’, and Accenture brings that in spades – the global strength, and the local heart being an appreciation for local culture, the needs and wants of our clients, many of whom we have a common interest in and those others who are very complementary.”
The two companies share many customers, with Solnet’s customer base including ACC, Te Whatu Ora, NIB Insurance and Fonterra.
Botherway says the deal removes some of the size constraints which had previously hampered the business.
“We were always a little constrained by our size – there are only so many things you can do well.
“While we do a lot of things like cloud, digital transformation, process automation, devOps, low code, those sorts of things already, there are other aspects, particularly around cybersecurity, data and AI – that’s probably one of the most exciting aspects fo what Accenture brings.”
Solnet’s integration within Accenture’s New Zealand operations will be ‘almost a reverse takeover’ with Accenture’s less mature and smaller cloud and infrastructure engineering function moving into Botherway’s team.
While the plan is to become ‘one Accenture’ Solnet will maintain its own identity with respect to the cloud and infrastructure engineering aspect.
The combined business is already eyeing up growth opportunities across the New Zealand market.
Financial services reforms, combined with a desire for improved customer experience, are driving opportunity for that market, while in the agri sector, geopolitics are impacting supply chains and driving ‘a significant amount of both opportunity and change’. The government arena, including health, is also a strong play for both Accenture and Solnet.
“We look at this from the journey New Zealand is on, and the innovation of many of the New Zealand companies. Accenture now is a very significant part of that fabric. We are one of the largest services firms in the country and it’s that local intimacy coupled with access to genuine global scale and capability that enables large organisation to flex and move quickly on these large change programs that makes us quite unique in the market.”
Burns says further acquisitions could be on the cards.
“Absolutely. We are continually looking for acquisitions that fit. It is very deliberate around bringing together genuinely augmented capabilities for the betterment of our clients, but absolutely we are constantly in the market and looking for acquisitions that continue to bolster capability,” he says.
He says the company is also ‘working very actively’ with New Zealand government and other players to build – or bring – data and AI capabilities to New Zealand.
“That would be a natural ongoing addition whether through further acquisition or through bringing those capability pools into the market.”