An Effervescent New Year on the CEE Acquisition Market

teknowlogy has been analyzing the new consolidation wave that started in Central and Eastern Europe at the beginning of 2020.

The markets in this region have been in a kind of standby mode over the last few years, with the expected adoption of new technologies being less widespread than expected.

However, the large transformation projects cannot wait much longer, and companies are preparing for this, especially the large global players.

In the first week of January 2020, two acquisitions were announced: EY Poland was going to acquire SID, and Ness Digital Engineering was going to acquire CassaCloud in Slovakia. These two announcements were part of a larger European context where Accenture announced the acquisition of Maihiro, the German C/4 HANA specialist.

This means that the usage of cloud-based applications has become a visible and dynamic trend in the region.

The acquisition of SID Group represents a major step for EY Advisory in Poland. SID is one of the largest SAP players in Poland, and one of the few that remained independent until recently. The acquisition will enlarge EY’s SAP team with almost 100 people, making it a major player on the local market. These resources are very valuable in the context of European and global usage, as SAP technology has been the main focus for EY for a few years. According to the company, the Polish SAP team will be part of EY’s European structure established for technology, analytics, and cyber. Following the acquisition, EY has also gained several senior managers that joined the team from SID.

The Polish SAP market has seen a rather modest evolution over the last two years, being impacted by cautious public investments, some reluctance among customers towards the transformation of their old systems, and constant price pressure. Nevertheless, teknowlogy expects the situation to change in the near future as numerous SAP implementations in Poland have been in place for 20-25 years and S/4HANA adoption will be launched in the end. As the S/4HANA solution itself has gained maturity, customers are more confident to take this step. SAP partners will play a crucial role in this endeavor, especially the international ones that will support their customers in this difficult mission and will bring in their methodologies to generate more value.

The second acquisition recently announced is the Slovakia-based company CassaCloud, an emerging consulting player in the Salesforce ecosystem. Through this acquisition, Ness Digital Engineering will gain resources to challenge international players such as Accenture or CGI on a local and regional level. It will also strengthen its Salesforce Center of Excellence, which acts as nearshore and offshore delivery center. teknowlogy believes that the move comes at the right time, considering the fact that Salesforce-related business has been seeing strong growth thanks to CRM implementations in midsize and large enterprises across the region.

Slovakia’s cloud adoption rate places the country quite close to the more mature Western European economies. The commercial sector takes the natural steps in the optimization and consolidation of IT systems. As a consequence, consulting and system integration around cloud computing have been and are forecast to remain important growth drivers for the local IT services market.

teknowlogy expects more acquisitions to take place in the market across Eastern Europe in 2020, especially in fast-growing topics such as cloud computing, digital transformation, and security.