Sonata Software acquires to double down on cloud and data to serve target verticals

With its Quant Systems acquisition, Sonata Software expands its modernization and digital engineering capabilities for banking, financial services, and insurance (BFSI) and healthcare and life sciences (HLS) enterprise clients. This acquisition boosts Sonata’s ability to deliver cloud and data migration services in verticals with nearshore resources, provides access to additional partnerships, and offers new accelerators for these industries.

Sonata eyes growth opportunities in key US markets and industries, and Quant Systems may be just what it needs to continue its rapid growth

Bangalore-based Sonata has built a multi-million-dollar managed services business specializing in cloud and data transformation. As this is Sonata’s largest acquisition to date, it adds significant talent, intellectual property, and a growing client base to its North American operations.

Texas-based Quant Systems was founded in 2008. Its core capabilities lie in digital transformation, cloud technology, enterprise data, cyber security, data privacy, enterprise quality assurance, and Salesforce services (see Exhibit 1). Its partner ecosystem includes industry leaders such as AWS, Adobe, Salesforce, Oracle, Snowflake, and Google Cloud. Quant reported cumulative annual growth (CAGR) of 116% in the last two years, and headcount increased from 80 to 300, tallying 60 data, 55 cloud, 125 digital engineering, and 60 managed services FTEs. With such growth, Quant appealed to Sonata to boost growth and further establish its US market presence.

Exhibit 1: Quant Systems’ service offerings span data, cloud, and analytics services

Source: Sonata Software and HFS Research, 2023

Quant’s expertise in BFSI and healthcare and its cloud and data competency were the major drivers for its acquisition by Sonata

HFS expects Sonata Software to benefit from Quant’s presence in the US-based BFSI and HLS industries by adding talent, nearshore expertise, and a healthy client roster. This acquisition helps Sonata deliver services to industries that find it hard to access talent and prefer nearshore access to project leaders and teams.

As access to cloud and data talent continues to be a challenge, Quant’s nearshore presence (41% of staff in the US, Mexico, and Costa Rica) put its feet on the street in North America for Sonata’s existing presence and prospective industry coverage.

Enterprise customers will benefit as Sonata and Quant align their IP and accelerators

With this acquisition, Sonata’s clients will have access to a growing number of frameworks, migration, and implementation tools (see Exhibit 2) that add cloud to customer offerings as part of Sonata’s Platformation framework.

Exhibit 2: Sonata and Quant now bring a large IP and accelerator toolkit to help solve problems in high-growth areas

Source: Sonata Software and HFS Research, 2023

Further, with Sonata’s expertise in application management support, infrastructure support, data center management, automation, and RPA, Quant can scale up and ramp up delivery to its existing accounts. Enterprises in the digital bank and crypto space can also benefit from Sonata’s capabilities in these areas where Quant is already implementing non-core functions.

The Bottom Line: Sonata’s acquisition of Quant aims to fuel its growth in the US-based BFSI and HLS industries.

With the rapidly evolving technology landscape driven by cloud, data, and digital transformation in the BFSI and HLS industries, enterprises must balance their resource investments, compliance and regulatory requirements, and talent development. For enterprise customers, Sonata’s breadth of talent and accelerators combined with Quant’s partnerships, domain, and geographic coverage can close the gaps and increase its competitiveness with larger organizations.