• Telefónica Tech is acquiring UK-based Incremental in a deal valued at up to £175 million
• Incremental is a Microsoft Dynamics Partner and has expertise in data management and analytics
• The move strengthens Telefónica Tech enterprise services portfolio
• This isn’t its first acquisition in the UK

As if to highlight the growing importance of enterprise services and cloud-enabled digital services to the modern telco, Telefónica Tech has struck a deal to acquired UK-based Incremental in a deal valued at up to £175 million (€210 million).

Incremental provides digital services to scores of major UK enterprise users in key sectors such as manufacturing, energy and the public sector, and has developed particular strength in two key areas: Being a Microsoft Dynamics Partner in the UK, which means it is a recognized and trusted channel and integrator of Microsoft Dynamics ERP (enterprise resource planning) and CRM (customer relationship management) solutions that are hosted on the Microsoft Azure cloud platform; data management and analytics. The addition of Incremental will enable Telefónica Tech to “enhance the end-to-end cloud offering for mid-market, large enterprise and government customers.”

Incremental’s capabilities dovetail very neatly with the strategy of Telefónica Tech, which builds its “next generation technology integrator” proposition to enterprise users around expertise in cybersecurity, cloud, big data, IoT, AI and blockchain. 

“We are now able to provide end-to-end Microsoft services, including digital transformation, managed services and data analytics, and achieve attractive cross-selling synergies with Telefónica Tech UK&I, complementing and positioning us as a leading Microsoft-focused company in the UK,” noted Telefónica Tech CEO José Cerdán.  

The move doesn’t add much to Telefónica Tech’s top line – Incremental currently turns over about £40 million in annual revenues – but it bulks up its headcount in its UK and Ireland unit by 350 to around 1,000 staff. 

Almost all of the UK and Ireland staff have come on board as a result of strategic acquisitions: In July last year, Telefónica Tech announced the €398 million acquisition of Cancom UK&I, which provides professional and managed services in advanced IT, cyber security and multi-cloud solutions, and which had about 600 staff.  

Telefónica Tech has been growing through acquisitions elsewhere too, having bought Spanish industrial automation specialist Geprom in December last year and multi-cloud services specialist Altostratus Cloud Consulting in July. 

Those acquisitions helped Telefónica Tech to grow its revenues by about a third last year to almost €1 billion. 

- Ray Le Maistre, Editorial Director, TelecomTV