Deloitte Targets Digital Transformations, Doubles Down On Cloud With Acquisition Of AWS Partner

Services provider Deloitte sees an ocean of opportunity ahead in digital transformation work, which is a big reason it acquired a top Amazon Web Services partner, according to a company executive.

Earlier this week, Deloitte, No. 18 on CRN's Solution Provider 500 list, said it had acquired Day 1 Solutions, based in McLean, Va. In recent years, Day 1, which focuses on public sector IT, has branched beyond the state, local and education space into servicing federal government customers. Day 1 represents a series of major investments in cloud services that Deloitte says will enhance its clients' digital transformation efforts.

Day 1 provides three capabilities "that are most useful to us," said Ranjit Bawa, a principal in Deloitte's cloud and technology practice, told CRN in an interview. He cited the company's core engineering talent on cloud platforms such as AWS and VMware, development around building applications to cloud architectures and container-based constructs, and Day 1's managed services business, because "clients are increasingly asking us to host applications or host data products that we've built for them."

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Deloitte announced it would hire 3,000 U.S.-based, cloud-focused engineers over the next year, and open three new Deloitte Digital cloud studios in New York, Washington, and Orlando, Fla. Those sites will open within the next year and bring the total number of Deloitte Digital sites to 44 worldwide.

The moves are part of Deloitte's goal to build its cloud practice to a "very achievable" $10 billion by 2020, Bawa said. To do that, "we need to grow aggressively around" those added capabilities, he added.

The engineers Deloitte is hiring will help organizations integrate, streamline and manage business operations in the cloud, while also developing cloud technologies to accelerate and enhance the depth of the company's analytics and cognitive solutions. Most of the engineers will operate out of the three new sites, Deloitte said in a press release announcing the Day 1 acquisition.

"Cloud capabilities are the great enablers of digital transformation, and there’s a strong demand from clients to help them innovate their businesses with new cloud-based platforms,’ added Bawa.

"We're starting to see a big ramp-up in adoption and acceleration" around cloud and innovation, Bawa told CRN. For Deloitte, "demand is way outstripping supply," and more clients are asking the company to help with digital transformation, "planning out new business models … leveraging some technology aspects, looking at even building new products quicker and faster and cheaper."

Bawa said Deloitte is seeing clients that don't have adequate skills to handle digital transformations and the company is winning business because of it. But he said Deloitte itself faces a similar challenge. "There's a general sort of race to acquire and train skills, and we are facing that too, frankly, which is partly what's driving our hiring plans … our retraining efforts and our acquisitions."

Similarly, this week, executives of CSC, which will become DXC Technology as of April 3, cited the skills issue this week as they addressed their company's plans to invest in digital skills. The company plans to double its digital workforce over the next three years and acquire capabilities through acquisitions, executives said during a webcast.

Both Day 1 and Deloitte are AWS "advanced" consulting partners. At last year's AWS Global Partner Summit, Day 1 was one of the several partners honored for its customer focus, one of AWS's four key leadership principles.

During an eight-month stretch from late 2014 to the summer of 2015, Day 1 executed four acquisitions to strengthen its data center services offerings. They included Plano, Texas-based Vazata, whose public-sector business unit provided Day1 with enhanced cloud infrastructure, data center colocation space in Northern Virginia as well as access to the FedRAMP cloud security certification. Day 1 also acquired big data consulting firm OpenOsmium and cloud managed services provider Logic Method IT.