Accenture makes third digital acquisition in a month – buys Chaotic Moon

Derek du Preez Profile picture for user ddpreez July 22, 2015
Accenture has seen a lot of success by focusing in on its digital ventures. And it doesn't show any signs of slowing down yet.

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Outsourcing is becoming a bit of a dirty word at Accenture, as it expands and continues to focus on its investments in digital transformation services. And if this past month is anything to go by, it is intending to continue to pursue this route aggressively.

Accenture has this week announced that it has acquired Chaotic Moon, an Austin-based digital design agency, which will add to its suite of marketing and digital services provided by its digital arm – Accenture Interactive. However, what makes this even more pertinent is that it is the third acquisition of this type (i.e. digital in nature) over the past month.

This acquisition trail perhaps shouldn't be too much of a surprise given that Accenture's second quarter numbers for this year showed that digital services are growing at a rate of 20% and now account for a fifth of its total revenues.

The Chaotic Moon acquisition, of which the transaction details were not disclosed, will bolster Accenture's capabilities in strategy, digital design, prototyping and development. The release outlining the buy also notes that Accenture wants to gain a regional foothold in the “talent-rich Texas market”.

It also adds that the studio is known for its “adventurous style, boundary-pushing technology, and a methodology that pairs designers with developers on a rapid co-creation – from concepting to delivery”. Now, whilst that all sounds a lot like PR jargon, which it largely is, its also interesting that this is a far cry from the clean corporate approach of management consultancy and outsourcing seen from them not that many years ago.

Brian Whipple, senior managing director at Accenture Interactive, said:

We’re delighted to bring all of the talented and creative people of Chaotic Moon to Accenture Interactive to help us keep pace with the growing demand for our digital design and innovation services.”

Chaotic Moon is a natural extension of our capabilities and allows us to expand geographically into Austin, with its strong base of designers and engineers. Together, we will work to fulfill our ambition at Accenture Interactive to be a market leader in experience design, marketing, content and commerce for the world’s biggest brands.

Whilst Ben Lamm, chief executive officer and co-founder of Chaotic Moon added:

Chaotic Moon is a place where ideas are realized, conversations are sparked, and problems are solved through creativity and technology by having the best talent.”

With Accenture Interactive, Chaotic Moon will continue to design and build technology of consequence for our existing clients, as well as Accenture’s roster of many of the world’s biggest brands. With Accenture’s global footprint, ability to deliver at scale, deep industry expertise, and enduring client relationships, we’ll be able to create amazing digital experiences, pushing the boundaries of technology to do things that haven’t been done – or even thought of – before.

Chaotic Moon was founded in Austin in 2010 and has also recently announced plans to open a second office in Dallas. It also counts the likes of Disney and Marvel amongst its customer base. It will now become part of Fjord, which is the design and innovation arm of Accenture Interactive.

Going back to my earlier points, Accenture also announced earlier this month that it had acquired PacificLink Group, which is an independent set of full service digital agencies in Hong Kong. And prior to that it acquired Brightstep, a Swedish provider of digital content and commerce solutions. In May Accenture also opened its Interactive Innovation Center in Sophia Antipolis, France.

Accenture CEO Pierre Nanterme recently spoke about the pace at which the company has been acquiring over the past couple of years. He said:

We are looking in acquisition in some very specific areas as you know, from deep expertise in consulting and strategy for an industry standpoint to digital native organization to companies with a deep footprint in operations, I’m thinking about procurement as administration and we will continue to do so. And look at the kind of acquisition we believe we could get an excellent return and they’re going to further improve our differentiation, our competitiveness and our relevance in the business.

We are in the range of 45 [acquisitions in the past 3 years] and we are pleased with the companies we integrated. It’s a very competitive market, because everybody is looking to buy company who are going to bring differentiation.

I think we are differentiating ourselves in this acquisition market with our brand. I tend to believe, without being arrogant at all, that our brand is serving us very well as a magnet for talent.

John O'Brien, research director at TechMarketView, commented on the latest acquisition activity from Accenture, where he praises the way that it has largely kept the digital services business at arms length,

under the Fjord umbrella. He said:

By our estimation, Accenture now has well over 1,000 people engaged in digital design and related services. Accenture is right to be keeping these new additions at arms length. Fjord remains an independent company within Accenture Interactive - important to secure their unique identities and culture.

It is very early days to determine how these new digital services offerings will play out. But the opportunities for taking companies on a long-term digital journey from design, through development, integration, operation and run, seem very attractive.

My take

It seems pretty obvious that Accenture's acquisition strategy is focused on building out pockets of digital capability in areas where it think it can either do with tapping into the talent pool, or sees a potential market for growth. It also seems pretty determined to not let its traditional corporate structures and processes impact the innovation within these pockets, by keeping them at arms length.

And it seems to be working well, especially when compared to some of the other consultancy firms out there...

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