Wipro has been investing in its cybersecurity practice for the last five years and made its biggest investment in December 2021 by acquiring Edgile, a US-based cybersecurity consulting provider, for $230M. Edgile was formed in 2001 and currently has 182 employees on-site with 2020 revenues of $44.1 million.
Through this acquisition, Wipro has two goals. First, they hope to move up the value chain by playing an influential role in the initial stages of deals, which involve decision-making at the board or CXO level. Second, Wipro intends to position itself as an end-to-end service provider by augmenting its cybersecurity consulting capabilities and covering the entire value chain from advisory, implementation, and managed services.
CONTINUED FOCUS ON CYBERSECURITY
This is Wipro’s second cybersecurity acquisition in the last 12 months. In April 2021, it acquired Ampion, an Australian-based testing and cybersecurity provider. One thing both acquisitions have in common is that the deals provide access to local talent. This talent brings unique capabilities—cybersecurity consulting in the case of Edgile and experience in the local, state, and federal government through Ampion.
Wipro has come a long way since it introduced its identity and access management (IAM) back in the early 2000s. Since then, it added capabilities around data protection and data privacy, security architecture, governance, risk, and compliance. They have developed a robust managed security and services (MSS) practice with more than 8,000 cybersecurity professionals serving over 600 customers worldwide through its 16 cyber defense centers (CDCs).
Wipro has moved up the cybersecurity value chain by investing through Wipro Ventures, augmenting capabilities for market appropriate needs and putting the right team in place.
Investing through Wipro Ventures
Wipro has been advancing its cybersecurity initiatives through Wipro Ventures, the investment arm of Wipro, focusing on early- and mid-stage startups:
Note: Wipro has diversified its stakes in a few of these startups. It sold its stakes in Denim Group to Coalfire and IntSights to Rapid7. Emailage was acquired by LexisNexis, Demisto by Palo Alto Networks, and recently Cloudknox by Microsoft.
Augmenting capabilities for market appropriate needs
Wipro has taken the following steps to improve its capabilities including introducing specialized solutions, strengthening relationships with its partner ecosystem, and expanding its CDCs:
Putting the Right Team in Place
Wipro appointed Tony Buffomante to Senior Vice President and Global Head of Cybersecurity and Risk Services in December 2020. Being part of the Wipro Executive Committee, he brings experience from both the enterprise and consulting sides of the business. He was part of Sears Roebuck and Co., where he was responsible for enterprise security governance for Sears e-commerce, in addition to enterprise disaster recovery. This was followed by cybersecurity consulting with one of the Big 4s where he was the global co-leader for their cybersecurity business. He played a pivotal role in acquiring and integrating entities in cybersecurity portfolio, an experience which he leveraged in integrating Edgile with Wipro.
Additionally, Wipro restructured its cybersecurity services team for those tasked with managing large accounts. It has started rolling out one integrated model in cybersecurity – converging consulting and business acquisition into singular customer facing roles thus bringing strong ownership on the ground.
WHAT IS IN IT FOR WIPRO?
Despite Wipro’s investments in security offerings and partnerships, they are still perceived as an implementation and managed services provider rather than a strategic partner. With $44M revenue in CY 2020, Edgile brings cybersecurity and risk consulting capabilities and adds more than 80 new clients in the US to Wipro's portfolio. The majority of Edgile’s business is driven by referrals from its key technology partners including Microsoft, SailPoint, ServiceNow, and CyberArk. Edgile’s US-based, on-site workforce will give Wipro the required consulting muscle and add scale to its cybersecurity consulting practice. The acquisition is more about perception and the cultural change that Edgile can bring to the table resulting in dove-tailed downstream opportunities and revenue.
Edgile brings a portfolio of consulting solutions with a “strategy-first” approach and “Quick Start” solutions to develop a road map for security and risk solutions within a four-to-six-week timeframe. This includes utilizing configuration accelerators and a prebuilt library of laws and regulations, IT risk registers, and diagnostic assessments.
Also, Wipro and Edgile plan to introduce Wipro CyberTransform™, an integrated suite that will help enterprises enhance boardroom governance of cybersecurity risk and hopefully increase investment in cybersecurity strategy. In collaboration with the Wipro and Edgile partner ecosystem, Wipro CyberTransform will aim to accelerate digital transformation and operate securely in digital value chains.
WHAT IS IN IT FOR ENTERPRISE CUSTOMERS?
The deal could benefit enterprise customers who are looking for a single strategic partner for cybersecurity.
As enterprises are enabling remote access of critical IT infrastructure, use of collaboration tools, and availability of enterprise data on endpoint devices, their cybersecurity strategy must adapt. This requires moving from prevention-focused activities to more cyber-resilience activities.
With the Wipro-Edgile deal in place, Edgile customers can now look forward to engaging with a cybersecurity team who not only stops at the advisory or consulting stage but sees projects through to the implementation and managed security stage. Edgile customers will now get someone who will work across levels and take a holistic approach, while delivering a security posture and maturity assessments. This includes zero-trust architecture implementations from the future perspective and adoption of some new areas from a security mesh perspective.
And, because most security strategies are driven by top management, Wipro customers can now seek someone who can engage with board or C-suite executives and help drive some of the strategic decisions, keeping implementation and managed services in perspective. Organizations have the opportunity to engage with someone who brings a holistic point of view and can contribute at all stages of the digital transformation cycle.
Although Wipro has been hiring in local markets and has set up technology centers in Texas, acquiring Edgile adds to its on-site presence, which they were looking for.
Wipro has a historical record of multiple acquisitions in the past, especially since Thierry Delaporte took the reins as Wipro’s chief executive officer (CEO) in July 2020. For more on Wipro’s acquisition strategy, see Avasant’s From IT Service Delivery to Business Consulting: Understanding the Wipro-Capco Deal. Wipro must integrate Edgile within their existing practices, creating a synergy between the two companies and ensuring that Edgile employees look toward a long-term commitment with Wipro. Wipro should enhance the customer experience of Edgile’s existing customers to gain their loyalty for the longterm as well
However, with Edgile coming into the picture, the challenge for Wipro will be to do a complete shift from an implementation-centric model to an integrated service model that calls for a consultative approach to sales and solutions delivery. With bringing in consulting professionals who possess domain and industry backgrounds, Wipro and Edgile can work with sales and delivery executives to manage key accounts.
The integration strategy defined here will go a long way for mergers and acquisitions planned in the future