IBM is acquiring three digital agencies, as announced last week:

1) Aperto – a 300+ person digital agency based out of Berlin. The company has a strong brand presence in German and European markets, and in addition to its digital offerings, Aperto also has a traditional communications/PR arm.
2) ecx.io – a 200-person agency based out of Dusseldorf, Germany, and 7 locations total. The company brings a strong technical presence in platforms such as Adobe, SAPhybris, Sitecore, and OpenText.
3) Resource/Ammirati – a 300-person US-based digital marketing and creative agency, with offices in Columbus, New York, and Chicago.

The agencies will be folded into the IBM Interactive Experience business, operating somewhat autonomously, something akin to boutiques within a large brand name. The acquisitions are part of an aggressive strategy to push forward with the company’s Interactive Experience brand, IBM iX, which is IBM’s full-service offering for client services in the digital space. In a recent analyst call, the company stressed its focus on two strategic goals:

1) Experience design

Experience design is the practice of combining research insight, design, and technology to create great experiences for customers. It is one of the foundational elements that makes up the practice of customer experience management. Last year, IBM announced that ‘design thinking’ would be a prominent focus in developing client work, and they are continuing to follow through with that ethos. In the past year, IBM has hired over 15 partners or executives from top agencies like Razorfish, Digitas, Wunderman, and Ogilvy. Working side by side with technology partners, the IBM design-infused culture can start to tackle the complex and foundational elements of true experience design as a practice.

These specific acquisitions are further proof of IBM’s path forward in experience design. Both Resource/Ammirati (US) and Aperto (EU) have the technical capabilities and the creative skills to deliver what DCG categorizes as digital/interactive service provider services. ecx.io is a more technically oriented firm more akin to a systems integrator that will act as a technical resource and implementer in Europe. In light of IBM’s experience design push, these acquisitions make perfect sense – they are helping clients fill gaps in experience design, which brings together an agency’s technical and creative abilities to strategically think through a customer’s entire journey, across all channels.

The challenge for IBM here will be twofold: First, to ensure that the ‘design thinking’ does not become myopic at the expense of other capabilities such as technology fluency or the underlying business processes. Secondly, with specific regard to experience design, IBM will have to ensure that the new agencies are successfully integrated – both technically and creatively – with IBM’s larger offering to help clients establish a holistic customer experience practice, so as not to get lost in siloed traps of marketing or technology.

2) Expanding global presence in high-growth markets

The second theme that really hit home after hearing IBM discuss these new acquisitions was the expansion into high-growth markets. Germany is a prime example of this. The acquisitions of both Aperto and ecx.io bring to IBM iX 9 new European offices – three of which are in Germany – and 500 new employees in Europe alone.

Why the aggressive expansion with a focus on Germany? According to IBM, there are a few reasons:
First, the German market is growing fast. The economy has done well over the last several years and it is relatively diversified compared to other European economies. Aperto and ecx.io both have strong brands in Germany. These acquisitions will bring name recognition and unique expertise to IBM iX, which has only been around two years and is trying to rapidly grow both organically and via acquisitions in the service provider market.

Second, there are a lot of innovative service provider and technology companies coming out of Germany – think CoreMedia and hybris, and not to mention the recently acquired Aperto. For our extensive research on Service Providers in Europe, we interviewed 16 service providers who have 42 offices in Germany alone. In addition to a strong market, German service providers told us they put a heavy focus on hiring and training new employees right out of university, which in turn encourages a talent-infused landscape and fosters future growth. Furthermore, Germany is often considered the gateway to emerging markets in eastern Europe countries such as Poland and Russia. Many service providers and technology companies will establish a presence in Germany, with plans to expand eastward. These countries to the east also play host to near-shoring models, where labor is often less expensive than in Europe, and the delivery centers are time zone-adjacent. But when it comes down to it, as DCG analyst Jill Finger Gibson told CMSwire, “To compete in Germany — Europe’s largest market — you really need a well-established local German presence.”

What does this mean for customer experience?

The term ‘customer experience’ has become somewhat conflated with software vendor offerings over the last few years. At Digital Clarity Group, we define customer experience as the totality of a customer’s interactions with a brand or organization; not the software that runs those interactions.

IBM iX’s recent agency acquisitions are moving in the right direction. With a focus on technical fluency, and thinking about the customer’s experience from a big picture perspective, the new acquisitions have the potential to have a high, positive impact on the way IBM iX does business moving forward. The question will be, can IBM iX take its four pillars of success – digital, creative, strategy, technology – and solve client problems, not just in technology or marketing, but across the board? We’ll be watching to see if the company leverages the various agency brands under the IBM iX namesake to solve complex business problems for customer success.