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Infosys,Axon and the Future

August 31, 2008

Old News: Infosys buys Axon in India’s largest outbound technolgy M&A

Fresh News: Why would I do that, had I been in CEOs shoes?

For starters, lets go into some basics. Axon is “ world’s largest independent consultancy within systems, applications, products in data processing (SAP)” [BusinessWeek]

It primarily grew by M&A and as recently as this year, it has announced three deals: US’s SCM ,Australia’s Consulting Principles and US’ EnterSys. Interesting! A strong inorganic player, I must say. But why did it decide to get sold? That too at just 13X the EBITDA.

Balance Sheet problems? Axon announced better than expected results and analysts retraced their estimates for the new year.

So what is driving this landmark deal? The ability of Axon to move to the next level, by moving on Infosys’s boat? Likely.

And what does Infosys get in through this? Gold, absolute gold. Already Infy Labs are churning out some first grade consulting products. And added to that is Axon’s expertise and client base of SAP fans, maybe just maybe, Infosys has written a new chapter for itself.

I had been feeling for quite some time, that the future of Indian outsourcing is more and more in consulting. As wines mature, so will the Indian outsourcing scenario and Infosys seems to be taking all the right decisions off late.

I dont want to talk about Knowledge Outsourcing and all those fancy words. For honestly, I think they are all plain marketing gimmicks. But I do see, a time when Infosys will reinvent itself not as a software consultant but as a business consultant[which will be enhanced by its vice like grip on IT]

Fundamentally, analysts are jumping all over the place, with a buy shouting, but I will wait some more to actually start fishing…

Signing off!


One Comment leave one →
  1. September 2, 2008 4:08 pm

    oh good jobs

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