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Atos Aims for Digital Edge in IT Infrastructure Management

At Atos’ recent industry analyst event in Boston, the first time it had held such an event in the U.S., we expected the focus would be its expanded presence in the U.S. following its acquisition of Xerox’s ITO business last June, with an update on the integration, and plans for further development in the U.S. But this was a global rather than a regional event, and Atos had much more to share with us than an update to its U.S. business (where there has been some workforce restructuring).

With over half of its revenues coming from Managed Services (mostly IT infrastructure management), and Bull and Unify (the former Siemens Enterprise Communications) adding hardware, security, and middleware to its portfolio, it is particularly important for Atos to have a clear and distinct positioning within the global IT infrastructure managed services vendor landscape. This has not been the case recently.

Financially it has proven credentials. But in an environment where enterprises are contending with the huge disruption of digital, they are looking for more from service providers than delivery reliability, and management and financial stability.

In response, as summarized by its tagline “Trusted Partner for your Digital Journey”, Atos is now looking to position as a digital leader, in being one of the few IT services companies with the end-to-end IT services capabilities to support clients on their entire “digital journey”.

This positioning and breadth of capability is a particularly strong focus in the Managed Services (MS) business. The relish of MS head Eric Grall in having achieved organic (CP/CC) growth in 2015 was apparent (not many onshore-headquartered IT services providers are enjoying organic growth in MS at the moment).

MS has been busy, firstly with investments in automation and robotics in 2015:

  • Having decided several years ago to standardize on ServiceNow for service orchestration for hybrid cloud management and ITSM, the investment kicked off in earnest in 2015
  • Atos also embarked on initiatives to leverage autonomics solutions from Arago and IPsoft. It is currently doing three POCs putting Amelia in shadow of L1 operators for three months, aiming to use Amelia as a virtual agent for all L1 support and then to reinforce L2 support. The ambition is to achieve efficiency gains of up 50% in incident management and of 25-30% in service requests within two years.

Secondly, MS launched what it calls a hybrid “digital data center” with virtualized compute, network and storage, leveraging VMware. Atos is now offering clients a SDDC option for private cloud, with Siemens one of several early adopters. The SDDC approach shifts the emphasis from the infrastructure to the application workloads, which has several clear benefits to clients.

Thirdly, we heard for the first time about a newly coined acronym “EDGE” (Engineer, Design, Gather Enhance), Atos’ articulation of its approach to helping clients in their digital transformation.

So what does the EDGE approach mean as it applies to Atos MS?

  • Engineer: having a common framework for the orchestration and management of the complexity of clients’ landscapes of legacy infrastructure, private and public clouds.
  • Design (delivering a consumer-like experience to IT):  Atos’ ‘OneSource’ CIO cockpit, accessible on laptop and mobile devices, apparently includes project status and satisfaction metrics. Also the OneContact mobile app
  • Gather: applying analytics for insights into automation of IT infrastructure management; we heard about a new three-year apparently exclusive arrangement with U.S. firm ClickFox around applying its CEA customer journey analytics platform to identify process areas for automation in end user help desk. This should both reduce costs and improve the user experience. While some of its competitors are showing less interest in EUC services, Atos sees  it as an opportunity for growth, with the addition of Unify adding to its offerings in UCC 
  • Enhance: improving productivity/speed and delivering a consistent user experience across channels while reducing costs, e.g. shift left in helpdesk, the use of Amelia,

Atos has emphasized its capabilities in cloud orchestration across legacy and new environments for several years. EDGE goes beyond this; it should be helpful for Atos in going to market in providing a coherent overview of the breadth of its capabilities in MS.

In conclusion, deciding to standardize on ServiceNow is not in itself a differentiator, nor is leveraging IPSoft - using tools such as these will soon become “must-have” capabilities for any vendor to remain price competitive. The ClickFox platform (which to date has been used for customer journey analytics in sectors such as retail banking) is an interesting choice to apply to IT helpdesk processes. One Atos client I spoke to was particularly interested in it.

Furthermore, having an easy to navigate CIO cockpit providing real-time, drillable-down information is becoming a “must-have” for IT infrastructure management services providers; these are likely to have more bells and whistles added. Atos current version sounds relatively advanced, although we have not seen it. And there are some other MS providers able to offer an enterprise private cloud service (in addition to a virtual private cloud).

So the components are not unique in themselves, but applying all of them is distinct. When you tally up all these capabilities, plus the increasing global scale of Atos, it becomes increasingly apparent that Atos is one of a very small cohort of IT infrastructure services providers able to offer a full-service management across legacy and cloud environments, while assisting organizations in moving to cloud environments. Most of Atos’ client base was not “born in the cloud”; the EDGE approach appears to take a realistic approach to helping bricks and mortar enterprises in the digital transformation of their IT infrastructure.

Atos will formally unveil its “2020 Ambition” in Q4 of this year, but we were provided with a snapshot of its ambitions for MS. These included

  • The introduction of new MS services, particularly around IoT
  • Achieving 50% of its revenue from hybrid cloud and platform transformation by 2020 (currently <20%)
  • Achieving a $1bn book of transformation services business.

A number of factors will make achieving organic growth in IT infrastructure management services ever more difficult over the coming years. Only the larger Indian oriented services providers are currently enjoying (very) healthy growth, but their capabilities do not generally include end-to-end management of hybrid environments with a private cloud offering. Atos’ MS business has been on a journey of transformation for several years; it is now articulating a clear roadmap for being at the forefront of next gen IT infrastructure management services in the years ahead.

While EDGE appears to have been coined by its MS business, expect to hear more about EDGE across other Atos global service lines.

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We also heard at the event, inter alia, about:

  • Some workforce transformation initiatives (both recruitment and reskilling)
  • New developments in other parts of Atos, such as the Atos Codex analytics platform
  • The massive transformation program currently underway at Siemens AG (being done at speed: it started May 2015 and should be completed in December 2016). As well as the sheer scale of the transformation, there are new features such as Atos Resource Islands (ARI), a security offering for highly confidential systems
  • Atos C&SI business. Expect to see the EDGE appear more prominently here too
  • Developments in Worldline.

These all merit separate articles and will be discussed in the next NelsonHall Key Vendor Assessment on Atos.

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