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Capgemini Launches Global Engineering Services Offering To Rejuvenate R&D Services Offerings

Capgemini Group together with its subsidiary Sogeti has launched a new offering, Global Engineering Services (GES), a product engineering/R&D services offering. The new offering focuses on four main services: mechanical engineering, embedded systems, PLM software-related services and technical documentation. 

Capgemini's capabilities in PES/R&D services were consoderably enhanced back to 2003, when it acquired with Transiciel, a €136m R&D services business, mostly active in France servicing mostly the aerospace and automotive sectors, with the former EADS, Snecma, Alcatel, Renaul and PSA as key clients. Transiciel was merged with Sogeti and its R&D service business was rebranded as Sogeti High Tech. Initially a French business, in 2006 Sogeti High Tech acquired Future Engineering (FuE). FuE serviced mainly the aerospace sector in Germany with Airbus a key client. FuE brought in 250 personnel and revenues of ~€19m. In 2008, Sogeti expanded its sector presence with another niche acquisition, of Euratec, a French transportation-focused vendor with 35 employees. Sogeti and Capgemini then appeared to have reduced their focus on Sogeti High Tech. Recurring rumors of the sale of the business to Assystem emerged in 2011 but were not confirmed. More recently, Capgemini has been more keen to build an engineering services business, leveraging Sogeti High Tech. Capgemini CEO Paul Hermelin has commented that, as part of the pending acquisition of Euriware, the IT services captive of nuclear firm Areva, Capgemini will gain R&D services personnel that it will transfer to Sogeti High Tech. Nuclear energy is one of the fast growth segments of R&D services and will help balance the client base of Sogeti High Tech.   

With the creation of Global Engineering Services, Capgemini is expanding the scale and offering of Sogeti High Tech by:

  • Adding a delivery engine in India (NelsonHall estimate: ~800 personnel)
  • Expanding its service offering with technical documentation services (through the 2005 Bombardier technical documentation contract) around embedded software and PLM software-related services. This is a niche capability that Capgemini has not known what to do with.

At the moment, GES is avoiding markets where IOSPs are the most active: telecom R&D services (currently a soft market) and software product development and maintenance. Capgemini GES will be selling India-based R&D services to clients in Europe. Capgemini India has a key role to play in this offering: the company has a target of reaching a 70k headcount by end of 2015, up from 45k in Q3 2013. NelsonHall has been expecting inorganic growth in PES in suport of this ambition: certainly, today's announcement indicates Capgemini's increased focus on this market.

Accenture is also investing in developing its PLM services capabilities.

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