Infosys snags Panaya - why it matters

Den Howlett Profile picture for user gonzodaddy February 16, 2015
Infosys acquisition of Panaya is the first piece of a much larger enablement puzzle that will see the Indian giant become more software focused

Panaya Cloud Quality Suite
Despite the fact Infosys is a personal consulting client, the Panaya acquisition was initially a surprise. I had not been pre-briefed and had no knowledge of the pending transaction.

But upon about five nano seconds reflection it all makes perfect sense. Here's why.

Panaya is a company that has been a video case study client of mine and was one of Jon Reed's past case study and advisory clients. From what we've seen, its customers love what Panaya delivers.

We've known this company from its early days when it was trying to figure out how to find entry points into the SAP customer portfolio. Speaking for the pair of us, we both liked what it was offering - a simple, SaaS based method of identifying code breaks in SAP upgrades.

This is a vital service for SAP customers because it dramatically reduces the amount of effort and cost needed to track down where customizations require rework in the upgrade cycle.

Panaya competes directly with SAP's Solution Manager, a much more cumbersome product designed to solve many upgrade and SAP landscape issues but one which I have often characterized as five miles wide and an inch deep. That is less true today but on this issue Panaya's CloudQuality Suite outclasses SAP.

Throughout Panaya's independent existence, it was seen as the 'enemy' by some elements inside SAP but that will likely change now that it is coming under the Infosys umbrella. Why? Infosys is a major SAP partner and manages a good number of large scale SAP customer landscapes. The Panaya acquisition helps SAP deliver on its 'simplification' message, something that is at the core of the company's current messaging.

I guess it helps that Hasso Plattner Ventures was an early investor so to see a return of $200 million on total invested funds by HPV and others of $58 million is bound to put a smile on VC faces.

Influencers among the SAP Mentor community immediately gave it a thumbs up. This from Thorsten Franz on Facebook:

As far as enabling upgrades goes, with Panaya, Infy can estimate, plan, and execute those projects better then SAP. Being able to adopt new technology  install upgrades) becomes more and more of a strategic asset for customers, so Infy can in fact claim to be an enabler for strategic missions.

Some inside SAP might wince at such suggestions but they need get over it and recognize that its partner is helping to enable the 'simple' mantra.

From Infosys perspective, this is the first major move in Visha Sikka, CEO's promised services and software strategy. In prepared remarks he said:

"This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients."

Infosys now has a firm foot on the software ladder needed to deliver on the broader Infosys renewal strategy courtesy of an established in market player while at the same time having an opportunity to broaden its portfolio of both SAP and Oracle customers.

It also starts to answer the question: what will Infosys do with its massive war chest said to be earmarked for innovation?

As always with acquisitions, the marriage is the best bit. It's what happens after the honeymoon that matters. The good news is that Panaya has a track record of helping customers in a way that customers appreciate. This is something I know is close to one of Sikka's desired outcomes from his renewal program. As a SaaS solution, it has to continue earning the trust of its customers in a way that will help Infosys understand the SaaS world as an extension of its existing service delivery model.

My guess is that all eyes will now be on Sikka's team as it goes forward. I wish them well.

Update: Dick Hirsch added on Facebook:

One angle that might also be important is the ability of Panaya to support customers as they move towards the increased standardization required by the Public Cloud version of S/4HANA. Imagine being able to quickly identify which customizations must be migrated to HCP vs those that can be ignored in the transition to the SaaS deployment model.

Disclosure: SAP is a premier partner at time of writing. We are in the process of on boarding Infosys as a premier partner and as mentioned above Infosys is a personal consulting client.

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