IBM To Acquire Digital Transformation Specialist Octo

‘Octo is a pretty well-regarded brand. They’ve received a number of recognitions for thought leadership, work with the government, and as a good place to work. Also, we were sub-contractor to Octo on some projects, and they sub-contracted to us. We have an active relationship now. And we absolutely have competed. In the federal space, companies compete and co-operate. There’s lots of co-opetition,’ says Susan Wedge, IBM Consulting’s managing partner for U.S. public and federal business.

IBM Wednesday unveiled the planned acquisition of Octo and make it part of the IBM Consulting group in a bid to expand its reach into federal government clients looking to digitally transform their IT infrastructures.

No dollar value was given for the acquisition, which is expected to close before the end of the year. Arlington Capital Partners in 2019 purchased a majority stake in Octo.

IBM Consulting has a long history of working with federal government clients to help solve their digital transformation challenges, and sees in Reston, Va.-based Octo a way to build its talent base to better serve those clients, said Susan Wedge, managing partner for U.S. public and federal business at IBM Consulting.

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Wedge told CRN that Octo is an IT modernization and digital services provider, which is 100-percent government-focused and has about 1,500 employees. “When we bring it into IBM Consulting, we’ll have about 4,200 consultants focused exclusively on the federal government,” she said.

Octo brings to IBM Consulting agile development, SecOps (security operations), DevOps, and low-code and no-code capabilities, Wedge said.

“Coupled with what we have, this can really accelerate what we do more effectively,” she said.

Octo also brings a 14,000-square-foot R&D center it calls oLabs which is really a co-creation center open for use by its employees and its government clients, Wedge said. It can also be used by third parties to co-create solutions, she said.

“IBM has co-creation centers throughout the U.S.,” she said. “Octo expands that network. And the Octo co-creation center is focused exclusively on federal government customers.”

IBM Consulting has known of Octo for some time, Wedge said.

“Octo is a pretty well-regarded brand,” she said. “They’ve received a number of recognitions for thought leadership, work with the government, and as a good place to work. Also, we were sub-contractor to Octo on some projects, and they sub-contracted to us. We have an active relationship now. And we absolutely have competed. In the federal space, companies compete and co-operate. There’s lots of co-opetition.”

IBM Consulting, listed No. 8 on CRN’s 2022 Solution Provider 500, works directly with federal clients as well as through business partners, which in IBM terms includes solution providers.

Prior to Octo, IBM recently made three other acquisitions for its IBM Consulting business.

IBM in September, 2022 acquired Dialexa for its hybrid cloud capabilities.

The company in February 2022 acquired Neudesic as a way to increase its Azure cloud, data engineering, and data analytics capabilities.

Early last year also saw IBM acquire Taos for its professional and managed services around the cloud.