Global IT services provider, Accenture plc ACN recently announced the acquisition of Brightstep — a provider of digital content and commerce solutions. The move is part of Accenture's efforts to enhance its digital marketing capabilities. However, the company has not disclosed the terms of the deal.
Based in Stockholm, Sweden, Brightstep was formed in 2001. Brightstep provides brand e-commerce and digital marketing services. Apart from this, its portfolio includes technology development, and design and usability services. Furthermore, it provides services to improve the brand identity of its clients on the digital platform and enhance their online presence.
The acquisition will help Accenture’s clients gain access to a greater number of professionals specializing in digital e-commerce solutions from Intershop, hybris software and Adobe.
Brightstep will join the Accenture Interactive platform, a part of the company's digital marketing-services arm, Accenture Digital. Accenture Interactive was formed in 2009 to deliver managed consulting, technology and analytics services to chief marketing officers (CMOs).
Competent marketing is the key to success for every organization. Marketing and digital executives of a company are responsible for developing digital marketing campaigns, marketing content, e-commerce and marketing operations. Accenture Interactive is a well-integrated platform enabling CMOs to devise marketing strategies and derive higher ROI (return on investment).
Since the formation of Accenture Interactive, the company has made significant acquisitions to enhance its digital marketing capabilities. Earlier this year, the company completed the acquisition of Australian digital services provider, Reactive Media Pty Ltd. In 2013, the company acquired a Hong Kong-based online marketing consultant, Acquity Group Ltd., and U.K.-based design agency, Fjord. In 2012, it acquired digital production services vendor, avVenta Worldwide, to bolster its interactive platform.
According to the U.S. IT research firm Gartner Inc., companies have spent nearly 10.2% of revenues for marketing in 2014, of which one-fourth was invested in digital marketing. The report also suggests that 51% of the companies surveyed are planning to increase their 2015 digital marketing spending by 17% on an average.
Considering the growing need for digital marketing, we expect Accenture’s investment in digital and marketing capabilities to boost its long-term growth. This will also help the company in effectively competing with other digital marketing service providers such as International Business Machines Corp. IBM, Dell and Deloitte.
However, increasing competition from Cognizant Technology Solutions CTSH, a strained spending environment and Accenture’s broad European exposure may temper its growth to some extent.
Currently, Accenture has a Zacks Rank #2 (Buy).
A better-ranked stock in the technology sector is Cirrus Logic Inc. CRUS, sporting a Zacks Rank #1 (Strong Buy).
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