Capgemini and Cognizant acquisitions reflect market trends

Two acquisition stories last week give clues to where IT demand is coming from and how the big service providers will address this.

First there was Capgemini’s acquisition of Strategic Systems Solutions. This gives Capgemini more resources to server the investment sector and strengthen its presence in Chna and the Phlippines.

With China pushing hard to grow rapidly in the offshore IT sector this will give Capgemini access to significant resiources. Also the investment sector is increasignly looking to suppliers to develop systems previously done in house.

The second story was about Cognizant buying testing company Galileo Performance which based in Paris. Again this is a trend. For example Capgemini integrated its testing business, Sogeti, into its main business earlier this year to increase its resources.

According to outsourcing analyst and advisory firm NelsonHall, the software testing market could be worth more than $11.2bn by 2013.

The fact that these companies are acquiring is a good sign for the sector. 

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