India’s Wipro buys cloud consultancy and work marketplace Appirio for $500M

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Some more consolidation afoot in the cloud services industry, specifically around integration services. Wipro, a IT services company originally founded in India, announced that it has acquired Appirio — a consultancy focused on cloud services and cloud integration — for $500 million.

The deal confirms earlier reports of the acquisition, where the rumored price was $400 million.

Combining the two companies will create a large IT services giant that will compete closer with the likes of IBM and other big players in the area of systems integration, but specifically with a workforce more geared around the “on-demand” model that permeates so much of the tech world’s economics today.

Namely, it will give Wipro — which had made a name for itself originally in areas like business process outsourcing and helping clients move certain parts of their business offshore — a big step up into working with IT contractors globally using cloud infrastructure, by way of the fact that Appirio in 2013 acquired TopCoder, a marketplace for designers, developers and data scientists who take on projects remotely.

“In an increasingly digital world, as consumer behaviors and expectations continue to be reshaped by experiences, companies are recognizing that they need to transform how they engage with customers and employees by leveraging the power of Cloud. Appirio and Wipro are coming together to unlock transformational synergies in the applications space and help enterprises create new business models,” said Abidali Z. Neemuchwala, Chief Executive Officer & Executive Director, Wipro Limited, in a statement.

Appirio, which is based out of Indianapolis but operates globally, had raised about $111 million from investors like Fidelity, General Atlantic and Sequoia. Its customers includes tech giants like Facebook, eBay and Sony PlayStation, as well as big brands like Coca-Cola and Home Depot. It also worked extensively with Salesforce and Workday, two deals that Wipro said it would continue under the Appirio brand.

The continuation of those deals, in fact, seemed so important to the acquisition, that the companies even got endorsements in from Salesforce’s and Workday’s CEOs as part of the official announcement.

“[Appirio’s CEO Chris Barbin] and his team have spent the last decade building Appirio into a global leader delivering amazing customer experiences with Salesforce,” said Marc Benioff, chairman and CEO of Salesforce. “I couldn’t be more proud of Appirio as it joins Wipro, where together they will continue to drive customer success on a much larger scale.”

Appirio will be a relatively small part of Wipro’s organization as far as the permanent workforce is concerned, but it will add a huge component in terms of freelance workers. Wipro employs a whopping 170,000 employees, while Appirio counts just 1,250, but on top of that tens of thousands of contractors that are on its marketplace platform to pick up data science, design, and developer jobs from Appirio customers.

“When you combine Wipro’s global scale and deep digital focus with Appirio’s transformative worker and customer experience expertise, and best in class team, brand, and partners, you create a formidable force in the industry,” said Barbin, Appirio’s CEO. “Together, our aim is to dominate the market and claim the top spots in industry Net Promoter Score, market share, and best places to work.”

Wipro itself has been public since 2000 and has mostly grown on its own, with Appirio being only the 10th acquisition in that time. At $500 million, it’s also the most expensive for Wipro, which itself is valued at around $18 billion.

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