IBM announced today it acquired 7Summits, a privately held consulting firm owned by Sverica Capital Management LP. For more than 10 years, 7Summits has specialized in projects based on software-as-a-service (SaaS) applications from Salesforce. Terms of the deal were not disclosed.
The acquisition comes at a time when the number of organizations that have transitioned to SaaS applications in the wake of the COVID-19 pandemic has significantly increased both to better enable employees to work from home and to accelerate nascent digital business transformation initiatives.
IBM launched its Salesforce consulting practice in earnest by acquiring Bluewolf in 2016. The acquisition of 7Summit is the first time since then that IBM has moved to expand that business by acquiring a complementary consulting organization.
Demand for Salesforce expertise has expanded during the pandemic because many organizations have replaced on-premises applications that were difficult to access remotely with a portfolio of SaaS applications from Salesforce that address sales, marketing, e-commerce, customer service, analytics, and application integration, said Paul Papas, global managing partner for IBM enterprise strategy and experience.
Rather than simply invoking a vanilla instance of these applications, Papas said most organizations are building customer workflows that span multiple SaaS applications. The IBM consulting practice is designed to help organizations achieve that goal by either standardizing on Salesforce SaaS applications or integrating them with other SaaS applications from Salesforce rivals such as SAP, Adobe, and ServiceNow.
In addition, IBM also works with customers to integrate the Einstein AI engine developed by Salesforce with the Watson AI platform developed by IBM. The Einstein engine from Salesforce is optimized for Salesforce applications, while Watson AI technologies are applied more broadly across the enterprise, noted Papas.
IBM decided to acquire 7Summits because the consulting firm has already developed some of its own applications for the Salesforce platform in addition to having developed expertise in segments that IBM views as being complementary to its existing practice, said Papas.
In the last year, many organizations have employed SaaS platforms to accelerate digital business transformation initiatives that, prior to the pandemic, were expected to be achieved over the course of several years, said Papas. Instead of building applications from the ground up, it quickly became apparent it was simpler to customize existing SaaS applications using low-code and no-code tools that are more accessible to a broad range of developers.
Now that a COVID-19 vaccine is becoming more widely available, organizations are now looking for help to determine to what degree some business processes will remain forever digital, while others shift back toward the way they were conducted prior to the pandemic, added Papas. “Organizations are now trying to determine what will stay changed forever,” he said.
Regardless of the path forward, it’s unlikely many organizations (with few exceptions) that have shifted toward SaaS applications will be rolling back toward legacy on-premises applications.
Of course, IBM is hardly the only provider of IT services focusing on SaaS application platforms. Competition among IT services providers is fierce. Papas declined to say whether IBM planned any further acquisitions among consulting firms that have Salesforce expertise, but he wouldn’t necessarily rule it out, either. In the last year, there has been a wave of mergers and acquisitions among IT services providers that continues unabated.
In the meantime, enterprise IT organizations will need to determine in the months ahead how much internal SaaS application expertise they will need versus relying on external service providers. At a time when an uncertain economy may make more organizations hesitant to hire additional full-time employees, IBM and other IT services providers are clearly betting more organizations will look outside their own four walls for SaaS application expertise.
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