Capgemini doubles down in India

Steve Hamm

Capgemini's $1.25 billion acquisition of Chicago-based (but Indian-centered) Kanbay is the next step in a massive move by the large Western tech services outfits to India. With this act Capgemini doubles its Indian workforce to 12,000 in one swoop. This seems like a very smark acquisition. Kanbay is a $400 million-a-year company with a roster of large clients, deep experience in the financial services industry, and CMM Level 5 certification for its software management processes.

The move also reinforces Paris-based Capgemini's position in the North American market. Since Kanbay has a strong presence in the United States already as well as in India, this will pose less of an integration challenge than if Capgemini bought an Indian-headquartered company.

One other plus, according to Salil Parekh, CEO of the company’s North America business unit: "We will learn from them how to scale and expand offshore, and then roll the learning out across the rest of Capgemini." That's nice humility.

Something to think about: The $1.25 billion price is approximately what Lenovo paid last year for the $13 billion-a-year IBM PC Co. That shows dramatically the difference in value between a rising asset and a fading one.

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