IBM buys UK’s Optevia to ramp up in public-sector, cloud-based CRM services

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IBM has made an acquisition to help grow its business in cloud services for government and other public sector organizations — cloud services being of the areas that IBM hopes will offset declines in its legacy business. The company has acquired Optevia, a UK-based consultancy that specialises in customer relationship management solutions, specifically cloud-based CRM delivered by way of software as a service, and even more specifically Microsoft Dynamics CRM implementations for public sector organizations.

Terms of the deal were not disclosed. Optevia’s business reported record results last year, but abbreviated accounts filed earlier this year did not disclose the company’s revenues.

Optevia will become a part of IBM’s Global Business Services division. While it will help IBM grow its public sector business in the UK, IBM also has bigger plans to scale up and market Optevia’s software — up to now focusing only on the UK market — to customers globally.

“By acquiring Optevia, IBM will be able to provide Public Sector clients and prospects with a range of unique, industry focused CRM based solutions,” said Joanna Davinson, IBM Public Sector Leader – Europe, in a statement.  “This strategic acquisition will help strengthen IBM as a SaaS provider and Global Software Integrator.”

An IBM spokesperson says that IBM will use Optevia to expand its business around Microsoft’s Dynamics CRM in the public sector market, but it won’t limit itself to that platform alone. “We will continue to develop and enhance our portfolio to include relevant vendor solutions in order to meet client demands,” the spokesperson said.

IBM has made at least 151 acquisitions, with many focusing on expanding business with specific verticals, such as its recent acquisition of Truven Health Analytics, reportedly for $2.6 billion. The company reported over $22 billion in revenues last quarter but its sales have been in consistent decline for years now, and so it’s been making a big effort to boost new areas of growth to offset older parts of its IT operations.

IBM’s interest in acquiring talent to build cloud-based CRM solutions, specifically targeting the public sector, is part of wider developments at the company. Last year, it announced a host of partnerships with third-party providers to provide more government cloud services. It’s notable that IBM is now making acquisitions to bring some of that talent in-house.

Similarly, it’s interesting to see IBM ramping in CRM services. This is an area where companies like Salesforce and Oracle have dominated the market, and IBM has, again, forged partnerships with third parties like SugarCRM to provide solutions. It’s also made a point of divesting some of its CRM business, such as when it sold its CRM and BPO business to Synnex in 2013 for $1.2 billion, but it’s also been the subject of some speculation, specifically around whether it might acquire Salesforce.

Optevia itself was a small, bootstrapped company, with three of its employees — Christopher Brooks, Andrew Bailes and Tim Vernon — listed as the sole shareholders in this UK Companies House filing. It was founded in 2001.

Optevia’s primary focus until now has been on UK emergency services, central government and local government offices, health authorities, and housing and social enterprises. These include ministries, councils, regulators, licensing and grant management organizations, transport authorities and social housing organizations. It provides a range of services for SaaS-CRM solutions, and its focus largely has been on integrating Microsoft solutions.

IBM is not the only company tapping UK acquisitions in a bid to build up consulting services for the public sector. In February, BlackBerry announced the acquisition of UK-based Encription, another government-focused consultancy, specifically around security solutions. Of the many acquisitions made by IBM, this looks to be only the sixth from the UK.

Updated with more comment from IBM.

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