Will Infosys’ Actions Trigger Further Consolidation in the UK?

The recent announcement of Infosys’ bid to buy Axon has come as no surprise. It was a matter of waiting to see which type of player would snap up the company – Indian offshore player vs. a “Western Inc”. While the Western players are ramping up their SAP services capabilities on the whole, the Indian players are striving to climb up the value chain and penetrate the UK with most of the Indian players already having established a vast amount of SAP resources offshore.

The acquisition will help Infosys to leapfrog to the leading pack of UK SAP-related Consulting Services providers, and is expected to rank at #4, after IBM, Accenture and SAP itself! Although if Axon’s double-digit growth continues the way it has been in 2007 at 16%, Infosys can potentially reach #3 in 2008.

The acquisition of Axon will leave very few SAP services specialists in the market, such as Bluefin Solutions and Absoft. On the other hand there are also ERP specialists that focus on SAP as one of their key areas of expertise along with Oracle and/or Microsoft Dynamics for instance, e.g. Chelford Solutions. These smaller providers will face increasing threat of being acquired as I expect Infosys’ actions will trigger other IT services providers to consider acquiring the remaining specialists before their rivals do.

Note: Axon UK is profile in my "Supplier & Positioning Analysis UK" report at www.pac-online.com/sap