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IBM Acquires Microsoft Azure Cloud Services Consulting Firm Neudesic

BARCELONA, SPAIN – FEBRUARY 26:  A logo sits illumintated outside the IBM booth on day 2 of the GSMA Mobile World Congress 2019 on February 26, 2019 in Barcelona, Spain. The annual Mobile World Congress hosts some of the world’s largest communications companies, with many unveiling their latest phones and wearables gadgets like foldable...
Arvind Krishna, CEO, IBM
Arvind Krishna, CEO, IBM

IBM has acquired Neudesic, a Top 250 Public Cloud MSP and Microsoft Azure consultancy. Financial terms of the deal were not disclosed.

This is technology M&A deal number 180 that ChannelE2E has covered so far in 2022.

IBM has now acquired more than 20 companies since Arvind Krishna became CEO in April 2020. Additional cloud-related consulting acquisitions of note include SentacaSXiQBoxBoatNordcloud and Taos.

How Neudesic Reinforces IBM Acquisition Strategy

The Neudesic acquisition aligns with Krishna’s overall hybrid cloud vision for the company. Krishna has been striving to pivot the company from hardware and software toward hybrid cloud opportunities. Much of the effort leverages the Red Hat acquisition — which provides open source software that runs across any public cloud, in private clouds and across on-premises data centers.

To further improve its profit mix, IBM has also sold off such business units as the Kyndryl managed infrastructure business and Watson for Healthcare components.

The overall M&A and divestiture strategy appears to be paying dividends based on IBM’s improved Q4 2021 financial performance.

IBM Acquires Neudesic: Azure Cloud Consulting Capabilities

Most of IBM's recent acquisitions have been small tuck-in deals rather than lofty, high-price SaaS business purchases. The result: IBM will increasingly compete against global IT consulting firms such as Accenture, Deloitte, PriceWaterhouseCoopers and the like, ChannelE2E believes.

Still, Neudesic is one of the larger tuck-in consulting deals that IBM has made Founded in 2002, Neudesic is headquartered in Irvine, California. The consulting firm has more than 1,500 cloud- and data-focused employees across the U.S. and in India.

Neudesic's key areas of expertise include application development, cloud migration, DevOps, integration, data engineering, data visualization and automation. Vertical market specialties include health and life sciences, financial services, energy and utilities, professional services and retail industries.

IBM Acquires Neudesic: Executive Perspectives

John Granger, IBM

In a prepared statement about the deal, John Granger, senior VP of IBM Consulting, said:

"As one of the leading cloud platforms, Microsoft Azure is key to many of our clients' ability to modernize and innovate. Neudesic adds deep Azure cloud, data engineering and data analytics expertise to accelerate our clients' hybrid cloud journeys. This builds upon IBM's prior acquisitions of cloud transformation capabilities last year."

Added Judson Althoff, executive VP  and chief commercial officer, Microsoft:

"Customers are driving incredible acceleration across Microsoft cloud services, and it's more important than ever to have trusted partners, like IBM, skilled in our technology. Neudesic and Microsoft are enabling enterprises to achieve their business outcomes with our Azure platform, leveraging a combination of services and IP. With this acquisition, IBM Consulting is gaining even more capabilities and assets to help customers succeed on their digital transformation journeys."

Concluded Parsa Rohani, co-founder and CEO, Neudesic:

"As a Microsoft Gold Partner with multiple Azure competencies, Neudesic is excited to enhance IBM's hybrid cloud strategy with extensive Azure capabilities. The combination of our capabilities with IBM's hybrid cloud vision and scale will drive even more impactful innovation for clients."

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.