Indian information technology giant Infosys has acquired its American rival Panaya for US$200 million. New Jersey-based Panaya is a Software as a Service (SaaS) company, whose flagship CloudQuality Suite offers automated software management, in addition to supervision of the quality of software used by enterprises.
Analysts say it is a “game-changer” for Infosys. Firstly, the automation will free a large number of Infosys employees engaged in software testing, allowing them to focus on developing advanced technologies. Secondly, Infosys will be able to differentiate its service portfolio from local rivals such as TCS, something that is crucial for Indian firms heavily dependent on the U.S. market.
“The acquisition of Panaya is a key step in renewing and differentiating our service lines. This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients,” said Vishal Sikka, CEO and Managing Director of Infosys.
This is Sikka’s first acquisition since he took over as CEO, vowing that he would focus on automation, artificial intelligence, machine learning, big data and analytics.
Panaya employs less than 100 people, with the majority of its staff working from Israel. But it counts several top American multinationals – including the likes of GE, Coca-Cola, Mercedes-Benz, Apple and Johnson & Johnson – among its clients.
The company has reportedly raised about $59 million from private equity players such as Benchmark Capital, Hasso Plattner Ventures, Battery Ventures and Israel Growth Partners.
Analysts say Infosys will soon introduce SaaS based automation to its service lines, which will not only help it to reduce costs but also to shorten delivery time. They also warn that automation technologies of this kind will lead to the removal of thousands of employees in the Indian IT services market.
The deal is likely to be closed by the end of March this year.