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Service Provider Success: ATOS investor day & Advance 2019-2021 Strategy takeaways

Improving in whatever it is we do it’s always interesting to observe and learn from others, especially those that are close to what you do.

I thought that many of us in the technology services industry will find this summary of Atos investor day transcript informative. I have focused on the more interesting elements relating to technology managed services and hence not included anything to do with the Worldline payment processing business. Useful data source links including the full transcript are included at the bottom of this blog summary.

Gilles Arditti states that Atos set out in 2009 to be a cloud enabler, supporting our clients and to achieve their business objectives and are now recognised as number one in Europe in the cloud and hybrid cloud.

  • £260 million invested per year in R&D with £9.8b revenue, 110,000 experts and present in more than 70 countries.

  • 2.653 % of revenue spent in R&D, with many labs and country-specific CTO’s (Assuming R&D spend is not relating to worldline).

  • £89k Revenue per head and that’s across 70 countries

  • £0.87b Cyber security revenue with 10% growth and 15% ebit

  • 45% of employees are off and nearshore

  • 100% of employees trained in code of ethics with corporate social responsibility for carbon emissions and strong NPS score currently sitting at 50% with a desire to increase it

Looking ahead, a target of €11.5 billion revenue, €1.2 billion operating profit expected in 2019, continuing to be number one in Europe for cloud and hybrid cloud.

Interesting that Atos recognise they are entering an era of Servitisation, an evolution for the next decade. A drive to create service value beyond datacentre and desktop to achieve their 100 billion objective.

“Products will incorporate more and more services and will increasingly be sold as consumption-based utilities. Ultimately as such models evolve to maturity digital twins and their associated services will become only part of the end-to-end capabilities that IDM is the only one to be able to offer.”

“a complete evolution that it is not just about technology solutions but will reflect the change of the very nature of our services and business values will be perceived and will be delivered. The boundaries of traditional managed services will be expanding as the services enabled by infrastructure will become faster and extended outside of data centres and outside of the cloud”

“23 billion connected devices today, mostly of course basic sensors, to over 75 billion smart objects in 2025” a massive industry changing swing and with it all the resources required including five fold data increase to 175 zettabytes in 2025.

The 2019-2021 strategy has Four main levers of execution coupled with RACE

Hiring over 60,000 new engineers over the next 3 years, with what looks to be a drive to recruit from universities worldwide. I personally suspect there will be more investment in R&D driving further servitisation of value-adding services.

The four main levers of Advance 2019-2021

1 - Technology expertise and 2 - partnerships

  • Leveraging platform and end to end automation to better serve their clients

  • Clients are no longer wanting specific solutions they don’t care how, they care that their problems are understood and that everything is taken care of, of course the Servitisation will account for specialist partners in this journey.

  • Robotic Process Automation (RPA) and Predictive Analytics being foundational to digital value propositions, IOT, Application, Edge and perspective analytics

3 - Industry focus and 4 - vertical go-to-market

Having vertical industry focus, to be number one you need to understand your clients, focusing on specific verticals enables ATOS to become familiar and influence their R&D to learn, evolve and through servitisation provide further value.

  • Healthcare, Energy & Utilities, Telecoms, Media and Technology, Retail, Transport & Logistics, Public Sector and manufacturing, Financial services and insurance.

Coupled with the four levers Atos are driving an improvement initiative called RACE. Road to Agile Competitiveness & Excellence, a lot of which will be obtained through automation and leveraging technology to better enable and smooth out the business as well as changes in their operating model. I would hope this involve streamlining Product through Configure Price Quote to Cash (CPQ to Cash), certainly know at least one significant Atos partners who is better enabling Atos via presenting their offerings into CPQ to better enable people and streamline process.

It is also interesting to observe there is a Digital Transformation Factory at 30% of Group revenue with Hybrid Cloud growth above 35%, a continuing drive to move solutions onto standard cloud platforms for the future.

Digital transformation factory is made up from

  • Orchestrated hybrid cloud

  • Digital workplace

  • Codex (analytics offering)


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