EDS Will Acquire GEMS
EDS has reached an agreement to acquire Global Enterprise Management Solutions (GEMS), a certified SAP value-added partner serving clients primarily in the IT services, assembly/manufacturing, logistics, and transportation industries, for an undisclosed price. EDS company officials expect the deal to help expand EDS's capabilities in the SAP CRM market. Monday's acquisition is also designed to aid EDS in providing stronger capabilities for enterprise-level customers installing or planning to install SAP applications.
"This is a growth play in the CRM market and the SAP enterprise market," says Travis Jacobsen, an EDS spokesman. "EDS has always said that it would look for acquisitions that would add strength and capability for our future needs and growth possibilities."
The acquisition, which is expected to close by the end of the year, was the second announced by EDS in the past month. In mid-October the company agreed to pay $150 million to acquire another 20 percent of MphasiS, an applications and BPO services company based in Bangalore, adding to EDS's existing 52 percent ownership stake. The acquisition was designed to strengthen EDS's overseas capabilities. GEMS offers IT solution development, implementation consulting, and solution reselling services for clients looking to deploy SAP. GEMS's customers include shipping firm DHL, electronics manufacturer Samsung, and ticket supplier Ticketmaster.
EDS has worked with GEMS for several years, according to Jacobsen. By acquiring the company rather than continuing the partnership arrangement, EDS gains "a strong employee base," including approximately 150 GEMS employees in Dallas, India, and Germany, which will transition to EDS, including development staff, SAP consultants, and technology architects. These employees will help increase EDS's expertise in CRM, ERP, supplier relationship management, NetWeaver, and other business relationship management specialties, according to Jacobsen.
The acquisition is also expected to provide greater speed to market for EDS's SAP enterprise software practice and transform EDS's current SAP resources solutions-focused organization, according to Jacobsen. Other key elements of the acquisition include GEMS's mServiceSolutions and Accelerated Data Migration tools, which are prepackaged mySAP All-in-One software solutions that can be deployed at client sites.
"The acquisition of GEMs also gives us additional functional capabilities in business process transformation, systems configuration, and accelerated software migration," Jacobsen adds. "This relationship will strengthen EDS's enterprise applications portfolio in these key areas."
The Dramatic Shift in Outsourcing
Will Bigger Be Better? HP Spends $13.9 Billion on EDS to Find Out
The hefty merger hopes to rival IBM, but provides little advancement in terms of CRM.