CSC Acquires AppLabs - Building Bench Strength In The Testing-As-A-Service Market, Especially If CSC Looks At The Bigger Picture

CSC announced today that it is acquiring AppLabs, a US-based IV&V testing vendor. At first glance, it's a win, maybe a win for both sides. CSC states that one of the reasons that it acquired AppLabs is to augment its horizontal application strategy - due to AppLabs' presence in the US and UK (both vendors have firmly rooted practices in both markets) and to leverage AppLabs' testing strength in both custom and package applications. It's clearly a win for CSC:

  • This acquisition brings the larger vendor something new - a foot into the ISV market. AppLabs has had a pretty successful track record in testing software products. Historically, CSC's focus has been supporting internal IT for both private and public sectors. 
  • AppLabs is one of the vendors that has been consistently successful in adapting both iterative and Agile practices to its test methodology. This allows it, if it can transfer AppLabs' approach into its current testing practices, to better poise itself to support testing continuous build and integration environments.

For AppLabs, it's a maybe win. The acquisition will expose AppLabs to a much wider audience than it already had and provides it with the opportunity to expand its footprint, but as with any acquisition, it comes with some risk:

  • AppLabs has a singular focus on testing - it specializes in testing applications. Integration into CSC may dilute that focus and thereby dilute AppLabs' differentiation.
  • AppLabs had a well-designed test methodology that can adapt to a number of application development approaches; integration into a larger firm may cause it to lose some of the agility it has been able to leverage with current customers - and it has very skilled testers who support that. Both sides have to be careful not to detract from what makes AppLabs attractive in the first place.

This acquisition can transition into a win-win if CSC allows AppLabs to retain the singular focus it has had to service the evolving applications market and if it lets AppLabs become CSC's testing specialist.

What does it mean for app dev professionals?

Several things:

1. Short term - AppLabs will keep its focus on its specialties. If you're considering it for augmenting a test program or for testing applications, keep on track. AppLabs' methodology and approach is strong; even with integration, we think the vendor will stay the course.

2. Long term - Question strategy. While we think CSC is acquiring AppLabs to better manage its clients' application strategies, it's critical that in developing a broader systems integration offering, it doesn't lose the AppLabs' approach in the shuffle. AppLabs provides a specific and valuable service. Make sure that as the two vendors integrate, AppLabs' approach isn't diluted as it becomes part of the larger organization - especially if Agile development is part of your long-term approach.

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