Accenture announced the launch of Accenture Cloud First with a $3 billion investment to help clients migrate to the cloud. Yahoo Finance’s Brian Sozzi and Alexis Christoforous discuss with Accenture Chief Technology Officer, Paul Daugherty.
BRIAN SOZZI: A major push to the cloud during the pandemic continues. This morning, Accenture announced it's launching Accenture Cloud First with a $3 billion investment to move all of its clients to the cloud.
Joining us now to discuss is Accenture's Chief Technology Officer Paul Daugherty. Paul, good to see you this morning. This is a big chunk of money. Where is it going exactly?
PAUL DAUGHERTY: Yeah. You just-- we're talking about the cloud as we led into this segment, and the cloud is the biggest technology disruption we see over the coming few years. And the opportunity really is a once in a lifetime, once in an era opportunities for companies to re-platform their-- their global businesses to the cloud. So what we're doing is we're launching a new organization, $3 billion investment, a number of areas we can dive into deeper. It's acquisitions around enhanced capability in the cloud, talent, you know, the talent and capability for the cloud, automation to make this faster and easier for clients.
And it also, you know, new innovative capabilities. For example, one thing we invested in recently was a green cloud advisor, because many of our clients want to combine their move to the cloud with getting sustainability benefits and achieving sustainable development goals by moving from dirty data centers, potentially, to cleaner cloud solutions. And those types of innovative capabilities are what companies are looking for as they don't just use the technology of the cloud, but they run their businesses differently in the cloud.
ALEXIS CHRISTOFOROUS: Speaking of running businesses differently, a lot of us are doing just that during this pandemic, Paul. I'm sure this was in the works prior to the pandemic, but how much has COVID-19 sort of hastened the timeline for what it is you're doing right now?
PAUL DAUGHERTY: That's a great question, Alexis. That's exactly what happened. We said in 2013 every business is a digital business. And the last decade has been about companies transforming, retailers going online, manufacturers going to digital supply chains, and such. But right at the-- before COVID in January in Davos, we talked about this digital achievement gap, where 10% of the companies that were the leaders in digital using cloud and similar technologies were achieving returns two to three times the rest, and there's this big digital achievement gap.
Then COVID hit right after that, and it really illustrated the gap for companies and widened the gap between the leaders and laggards. So what we've seen is an acceleration of that need to transforming among our clients and CEOs in the C-suite talking about how do they use cloud, how do they use collaboration technology, other digital technologies to accelerate and compress what might've been a decade of transformation into a few years, and that's what we're seeing with the cloud right now.
BRIAN SOZZI: Paul, how far are you away from an acquisition?
PAUL DAUGHERTY: We are continually doing acquisitions. So you can expect to hear news from us going forward. But we did a number of acquisitions this year, some of which even included cloud capability. We're looking for automation capability to make this faster and easier for clients, as well as, you know, specialized capability in different industries. Part of what we're-- we're building here with the $3 billion investment is running businesses differently in the cloud.
So this is about if you're a retailer, how does retail work differently? If you're an insurance company, which is moving fast to the cloud, how does insurance work differently in the cloud and work different digitally? If you're in the energy business, how do you do upstream operations, remote plant operations differently? And those types of industry solutions and data models around them powered by, you know, many technologies, including Snowflake that you mentioned earlier, are going to be really key to success.
ALEXIS CHRISTOFOROUS: Paul, I also read that this week Accenture bought SALT Solutions, I guess that's a German-based tech consultancy company, to help with sort of the Internet of Things on the industrial side. Can you talk to us a little bit more about that deal and what it means for your strategy?
PAUL DAUGHERTY: It's a great illustration of exactly what you're doing-- what we're doing here, Alexis, so good question. So SALT Solutions provides technology to connect from the edge, you know, back to clients' businesses in the cloud. And what-- what's happening with the cloud, the cloud isn't just about these hyperscale data centers. The cloud and what the cloud is is expanding.
And edge, edge computing, computing in manufacturing plants, in consumer products, in our homes is becoming part of the cloud. And when we-- you know, when we look at these industry solutions for clients when companies reinvent their businesses, they're looking for how do they connect their manufacturing plants, how do I connect my, you know, my new consumer device for clients in the home back to the analytics, the AI, the data power that I can get through the cloud? And SALT is a perfect illustration of the type of capability we're adding to offer more of that end-to-end capability to our clients.
BRIAN SOZZI: How does-- just in terms of new bookings for your cloud services, how does that look?
PAUL DAUGHERTY: Well, we-- we're in a quiet period right now, so I can't share current information with you. But in the last year, our cloud revenues were $11 billion and growing fast. So cloud is already a big business for us. We're the leader in helping clients use the cloud effectively and move their businesses to the cloud. So that's already a big business for us.
And what we're doing with Cloud First is pulling together 70,000 people across a wider variety of disciplines-- because a lot of people have thought about the cloud as technology, getting out of your data center and moving to cloud data centers. It's much more than that. It's about using data and artificial intelligence more effectively.
It's about change enablement, changing the way you do business. For example, a lot of our clients want to change their IT developers to-- to be more like cloud developers. They want to change the business to have a data culture and an analytic insight-driven culture. And that all those capabilities together are what the CEOs and clients are looking for us to bring as we help them get to this new destination.