IBM buys consulting firm as it chases telco systems integrator bizIBM buys consulting firm as it chases telco systems integrator biz
IBM acquired Sentaca, which provides telecom consulting services and solutions. The company hopes to benefit from the relationships Sentaca has developed with service providers throughout North America.
February 1, 2022
IBM wants to be the company that helps ease the telecom industry into the cloud. And it's willing to make strategic acquisitions to do so.
On Tuesday, IBM announced it acquired Sentaca, which provides telecom consulting services and solutions. IBM's Steve Goetz told Light Reading that the company would add Sentaca's team into its broader IBM Consulting business in order to further invest in the telecom space. He said IBM would benefit from the deep relationships Sentaca has developed with service providers throughout North America.
IBM's goal is clear, according to Goetz. The company wants to play a leading role as a systems integrator as massive telecom companies ranging from AT&T to Verizon shift their operations into the cloud.
"We want to establish IBM as the preeminent systems integrator of choice," he said. As network operations move to the cloud, "the role of a systems integrator becomes more and more important."
To be clear, IBM's acquisition of Sentaca is a relatively small part of its broader operations. The company didn't provide the terms of its acquisition, but Goetz acknowledged that Sentaca is "relatively small in terms of personnel."
However, he said the acquisition of the company "provides us an opportunity to increase our relevance" with Sentaca's customers in telecom.
"This looks like a great fit for IBM’s consulting business," noted analyst James Crawshaw with research and consulting firm Omdia. Light Reading and Omdia are owned by the same company, Informa. "With a headcount around 100 they [Sentaca] are fairly small. Still they seem to have strong expertise in helping telcos develop cloud platforms to support mobile packet core and operational systems like assurance and orchestration."
Broadly, IBM is working to reframe and refresh its work in the telecom space. The company spun off its managed infrastructure business – now dubbed Kyndryl – late last year. It renamed its remaining services offering IBM Consulting in October.
As Reuters noted, revenue in IBM Consulting rose 13.1% during its most recent quarterly report.
Goetz, an executive in IBM Consulting with a focus on the telecom market, said the company is well-positioned to aid in the telecom industry's shift to the cloud. "The network is moving more and more toward an IT environment," he said, arguing IBM has a long and successful history in the IT sector.
A number of big-name telecom companies have signaled their interest in pushing their core networking operations into public and private clouds. Perhaps the most noteworthy development on the topic involves AT&T's announcement with Microsoft to move its core 5G network operations into Microsoft's Azure cloud over the next few years. At the same time, upstart network operators ranging from Japan's Rakuten to Dish Network in the US have touted their embrace of the cloud as a key element in their broader networking strategy.
Figure 1: IBM is working with a range of companies in the telecom space, including Dish Network.
And IBM, Goetz argued, sits in an ideal position as it can work with a wide range of players, from network operators to infrastructure vendors to cloud providers like Amazon and Microsoft. "We believe we are on the right side of gravity," he said.
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