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Cigniti Acquires RoundSqr to Accelerate its Digital Ambitions


We recently talked to Cigniti about its digital ambitions and its acquisition of RoundSqr.

While remaining focused on quality engineering, Cigniti has quietly expanded its capabilities to RPA over the past three years. This extension is logical: RPA shares much with testing, relying on creating and maintaining bots or test scripts. This is the start: Cigniti has broad ‘digital engineering’ ambitions, and RPA was the first step.

With its recent acquisition of RoundSqr, Cigniti has taken another step in its digital strategy. RoundSqr has ~100 employees and revenues of ~$2.8m in its FY22. The company has ~30 clients, most of which are in the U.S., U.K., Australia, and India.

RoundSqr started as a digital company and currently offers data, analytics, and AI services. The company is also active in web and mobile application development services, including architecture design and APIs.

RoundSqr strategically invested in AI, particularly in AI model validation and computer vision. The company brings in a methodology and expertise to model validation. RoundSqr has also developed an IP called Zastra that helps with computer vision-related annotation services.

AI Is Strategic to QE

RoundSqr highlights that testing of AI models is primarily restricted to evaluating their accuracy and relies on separating data into training and testing sets; it looks to take a more comprehensive approach across the model itself and its data.

The company evaluates AI models across six parameters, namely Stability (conducting testing several times on the same data); Sensitivity (mitigating the impact of noise and extreme scenarios on the output); Data leakage (using non-training data when building the model), Performance (the model will have the same outcome even if the data is changed), Bias, and Predictability.

Beyond the AI model, we think RoundSqr’s AI capabilities will be instrumental to Cigniti’s QE activities. Organizations have started using AI to conduct focused testing to identify areas where they expect bugs. But AI is also relevant for automating test script creation and maintenance. The offerings are getting ready, and client adoption is now starting. We think AI has the potential to revolutionize the QE industry if it removes human intervention around test scripts.

RoundSqr Brings Computer Vision Annotation IP

Zastra, the IP that RoundSqr has built over the past 18 months, is a computer vision product that targets image tagging and annotation, the action of identifying objects, people, or living organisms in a picture. Zastra can provide the necessary steps for identifying objects, including image classification, object detection, and semantic and instance segmentation. RoundSqr targets several sectors with Zastra, primarily manufacturing, medtech, and utilities. Its use cases include defect detection, track and trace, CT and MRI scans, and satellite images.

Zastra links nicely, we think, with QE in the UX testing area. The role of testing has primarily revolved around testing the functionalities of an application. However, testing image rendering, e.g., on a website, has been far more limited, mostly around pixel-to-pixel comparison. We think AI models open new use cases for websites and digital technologies such as AR/VR and quality control in manufacturing plants.

RoundSqr’s product roadmap for Zastra includes synthetic data generation and audio annotation. The company will also expand its hosting options beyond AWS to Google Cloud Platform and Oracle Cloud.

Revenues of $1bn by FY28

This is the beginning of the journey. The priority for Cigniti and RoundSqr is now cross-selling and accelerating further organic growth.

However, RoundSqr alone is not sufficient for Cigniti to reach its $1bn revenue target by FY28, up from $167m in FY22. To achieve this objective, the company will rely on both organic growth and M&A.

Future organic growth will come from further expansion of its service portfolio to digital offerings such as data, AI and ML, blockchain, cloud computing and IoT. The company also plans to grow within engineering and R&D services, both industry 4.0/digital manufacturing and product/platform engineering services. Cigniti targets connected devices, taking an AI-based approach.

Cigniti’s client base includes BFSI, healthcare, medtech, travel and hospitality, and retail. The RoundSqr acquisition further strengthens Cigniti in BFSI. It also brings further focus on ISVs, and the supply chain and manufacturing functions, which Cigniti sees as having great growth potential.

To support its portfolio expansion, Cigniti will need to continue to acquire. Acquisitions such as RoundSqr will bring further specialization and are precious. Cigniti will, however, need a transformational transaction. Watch this space.

Comments to this post:

  • Great repositioning story

    Aug 18, 2022, by Prasad Gundu

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