Drugi jezik na kojem je dostupan ovaj članak: Bosnian
Source: Adweek
Could the cloud begin to cast a shadow on consultancies sooner than forecasters expected?
After a year of global consultancies acquiring creative agencies and digital shops to get a better grasp on the marketing industry, a report in the British IT press raises an unexpected question of whether the firewall between CRMs and consultancies will ever come down. Last week, British outlet The Register reported that CRM powerhouse Oracle had hired global specialists to explore a potential acquisition of Accenture, the Dublin, Ireland-based consultancy. While most analysts have been quick to say a deal of this type or size is highly unlikely, the prospect of a successful joining of these companies—or any others of similar nature—would dramatically shake up the marketing ecosystem and shift long-held notions that software companies and consultancies could never exist under the same roof.
Both Oracle and Accenture declined to comment on the acquisition rumors. However, the size of the deal alone would make it tough to swallow, noted Julie Langley, a partner at M&A advisory firm Results International. Accenture’s market capitalization is nearly $78 billion, and if a takeover premium of 25 percent is factored in, the size of the deal would be around $100 billion—more than 10 times the size of any other deal Oracle has done. (For example, Oracle, which has a market cap of $185 billion, previously acquired PeopleSoft for $10.3 billion and NetSuite for $9.3 billion.)
For perspective, Langley pointed to Omnicom’s attempt to acquire Publicis a few years ago. It was a deal that proved naysayers to be correct in guessing it would be too large and complex to happen—even for an industry with giant holding companies.
But if it were to happen, “for the broader marketing services industry, however, the rumors [about Accenture and Oracle] are sounding like pretty good news and in my view the holding companies would welcome a deal of this kind,” Langley said. “If it were to happen, it would seem to take Accenture back to its more IT-focused heritage and away from its recent focus on marketing, advertising and digital services.”
In the past year, Accenture has built out its own creative chops, thanks in large part to two acquisitions of its own. In November, it bought London-based creative shop Karmarama, and in February it acquired SinnerSchrader, a 500-person digital agency in Germany.
Other analysts, though, expressed strong doubt, not only because of size. Citigroup analyst Walter Pritchard recalled that Oracle’s own chairman in 2010 said that buying Accenture would be a bad idea—adding that the rationale used then still applies today. (A separate report from Wedbush Securities mentioned that a “history of failed, large M&A transactions” in the IT services and product sectors as well as differences in business models makes a deal unlikely.) “It’s been difficult, I think, to change that neutral, unbiased posture of a consulting firm that’s recommending products to clients to them turning into an all red [a reference to Oracle] sales force,” said Pritchard.
While marketing execs are keen to blend data, platforms and strategy, an enterprise software firm merging with a consultancy of scale would be a big step past historical norms, said Bryan Kennedy, CEO of agency/consultancy Epsilon/Conversant. “In a dynamic market, there are a number of different business models that have the potential to succeed,” he said. “So it’s no surprise that we’re seeing companies evaluate alternatives to pursue the opportunity.”
Meanwhile, interest in cloud computing continues to grow. According to research firm IDC, the public cloud market is expected to expand from $95 billion in 2016 to $195 billion by 2020. It’s also the fastest-growing part of the IT world. In a separate report from Bain & Co., cloud demand is expected to account for 60 percent of IT growth over the next three years. (The report also mentions that 48 of the Fortune Global 50 companies have announced some type of cloud adoption plans.)
A potential deal between Oracle and Accenture “shows how technology alone is not sufficient for brands to move their business into the cloud,” said Michael Osborne, CEO of software player SmarterHQ. “It also requires additional services and manpower, which in the long run is neither cost-effective nor efficient.”
Marketing technology is still a relatively small part of both firms, noted Pivotal Research analyst Brian Wieser. And there could be benefits and drawbacks in Oracle becoming both a services and software company, he said, given that services companies focus more on long-lasting relationships while software firms tend to be more transactional. “It can be helpful for the two to work closely together to better meet market needs,” Wieser explained. “On the other hand, a services vendor may benefit from independence of the software/hardware vendor in order to be able to be seen to objectively pick which software/hardware vendors to work with.”
For now, though, the industry awaits a deal.