Accenture Acquires DayNine, Marking One Final Step Toward Complete Consolidation of the Original Workday Boutiques

It was announced last week that Accenture (NYSE: ACN) will acquire DayNine Consulting, one of the leading global Workday (NYSE: WDAY) services boutique partners. The deal not only represents another move by Accenture to become one of the top enterprise cloud services providers in the world, but it also marks a final step towards complete consolidation of the original Workday services ecosystem.

Workday’s uniquely “closed” implementation partner network, which originally included less than a dozen boutique consulting firms, has quickly consolidated as larger implementation firms moved in to gain a piece of Workday’s increasing market share in the rapidly growing human capital management and financials space. While not all of the original boutiques have been acquired by a strategic firm, they have all now at least transacted in some fashion. This milestone was met earlier this month when Collaborative Solutions received a growth investment from WestView Capital Partners, a Boston-based private equity firm. Other notable transactions include One Source/TCV/Halyard; Meteorix/IBM; CPSG/Mercer; OmniPoint/Aon; Aggressor/Deloitte; and Axia/KPMG.

Clearsight has been very active in the cloud software implementation space, especially in the Workday landscape, where our team has advised Meteorix, Axia, and DayNine in transactions. Given the demand and growth trends in and around cloud services, our team was early to the idea that these micro partner ecosystems would quickly consolidate. We have closely watched this wave of activity throughout the years and are thrilled to have helped several of these partners towards successful transactions.

Interestingly enough, as the original group of implementation partners started consolidating, a new generation of boutiques emerged. As the market has grown, Workday broadened its partner network, welcoming in a number of new parties including Navigator, HighPoint, CrossCountry, and Intecrowd amongst others. This group of “2.0 Partners” does not include pure play Workday Implementation firms (like the original boutique firms) but rather includes specialist firms (Navigator/Management Consulting; HighPoint/Healthcare; CrossCountry/Finance and Accounting; Intecrowd/Integrations).  While it was the exclusive Workday focus that drove much of the M&A demand for the first group of partners, we suspect a more diverse suite of services encompassing multiple enterprise software platforms will help to drive the next wave of consolidation. We continue to believe the Workday ecosystem will drive M&A opportunities and premium multiples.