IBM buys cloud CRM company Optevia, builds up public-sector services

IBM system with logo

To help grow its business in cloud services for government and other public sector organizations, IBM has acquired Optevia, a privately owned software as a service (SaaS) systems integrator that specializes in Microsoft Dynamics CRM solutions for the public sector.

U.K.-based Optevia will join IBM Global Business Services where it will help the company meet the increasing client demand for customer relationship management (CRM) SaaS solutions within the public sector, IBM said. Terms of the deal were not announced.

IBM said the acquisition will help the company establish itself as a “premier SaaS and digital consultant and accelerate leadership in CRM solutions.”

“By acquiring Optevia, IBM will be able to provide public sector clients and prospects with a range of unique, industry focused CRM-based solutions,” said Joanna Davinson, IBM Public Sector Leader, Europe, in a news release. “This strategic acquisition will help strengthen IBM as a SaaS provider and global software integrator.”

Optevia has worked with Microsoft Dynamics CRM since 2004. The company’s main focus is on U.K. emergency services, central government, local government, health authorities and housing and social enterprises. The company’s client base, of which it has more than 200, includes ministries, councils, regulators, licensing and grant management organizations, transport authorities and social housing organizations.

Because of it’s long-time work with Microsoft Dynamics CRM, Optevia has a tremendous amount of assets and solutions around it, said Hitesh Amin, executive partner at IBM Global Business Services.

“For IBM to organically try do that and get to that level, it would take a long time,” he said. “By acquiring Optevia we can differentiate ourselves quickly in the market.”

It also gives IBM the on-site presence that public-sector organizations in the U.K. require, Amin said.

IBM said the acquisition will allow it to scale Optevia’s offerings across other areas worldwide “where Optevia’s software, assets and highly skilled, industry-focused workforce, coupled with their expertise will significantly increase IBM’s current capabilities.”

CRM heats up

Industry experts estimate that the worldwide CRM market is valued at about $23 billion. The top five vendors— Inc., SAP, Oracle Corp., Microsoft and IBM—account for about half of that. Amin said IBM expect the CRM market to accelerate, especially with its customers.

CRM in the cloud space has been heating up over the past several months, said Brian Gracely, lead cloud analyst at Wikibon. In addition to IBM’s Optevia acquisition, Oracle Cloud expanded its CRM offering and Accenture acquired CRMWaypoint.

Those moves make sense, because “sales is a data-rich, horizontal application that every industry needs,” Gracely said. “As customer buying patterns are changing—mobile interactions, for example—and being influenced by different sources—such as communities and recommendation engines—we’re seeing CRM solutions becoming platforms that allow new applications to add unique industry-specific insights.”

IBM has made 151 acquisitions, and Optevia’s is the latest the company has made to expand its presence in the public sector. Last year, it announced five new major cloud partners that serve the U.S. federal government.

IBM has been also building out a mix of vertical data sets, such as healthcare with its purchase of Truven Healthcare Analytics Inc. and horizontal data sets with its purchase of the Weather Company, Gracely said.

“All of those can ultimately make IBM’s Watson service more intelligent,” he said.

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