We were pleased to recently attend the Salesforce World Tour in London and Boston, where we listened to speeches from Salesforce President, Keith Block, along with senior members of IBM Watson and Amazon Web Services. These talks focused on the transformation of customer experience as part of the so-called ‘fourth industrial revolution’. This revolution is being characterized by the convergence of cloud, social, mobile and technologies like the Internet of Things (IoT) and Artificial Intelligence (AI).
This trend is notably being observed through the development of eCommerce and smart devices, which now utilize predictive marketing and advanced data analytics. This technology is expected to become increasingly sophisticated with the rapid advances in AI.
Percentage of surveyed companies using or planning to use AI in the following ways
The Equiteq Consulting M&A Index remains significantly above long-term averages and the Equiteq Consulting Share Price Index achieves a ten-year high.
Global consulting M&A activity, as tracked by the Equiteq Consulting M&A Index, was robust in the third quarter. Deal volumes rose in comparison to both the prior quarter and the third quarter of 2015 with serial acquirers like Dentsu, Accenture and Deloitte continuing to be highly active. Third quarter M&A activity was highlighted by landmark transactions within media and management consulting, as well as the broader IT sector.
The Equiteq Consulting Share Price Index also performed very strongly this quarter, outperforming both the S&P 500 and FTSE 100. The index is now at a ten-year high with particularly strong increases in the management consulting and engineering consulting indices.
The pervasive adoption of cloud solutions is continuing to transform businesses across industries. The most commonly cited drivers for the transition from on-premise to cloud-based technologies are users’ ability to reduce costs, improve risk management and enhance scalability. This evolution in demand is causing widespread disruption to the technology industry, as evidenced by the wave of high-profile restructuring and deal activity amongst the legacy technology players.
Cloud-based applications are complex to implement and manage, which drives demand for cloud services. Salesforce and Workday are considered to be some of the leading vendors of cloud-based applications, with strong networks of specialist consulting partners. We heard at Salesforce’s recent annual Dreamforce conference that they expect a massive increase in the population of Salesforce consultants required globally by 2020. We also regularly receive feedback that there is rising demand and a limited supply of consulting expertise related to Workday. The rising need for capabilities related to both of these technologies is driving organic growth and consolidation in the cloud services space.