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Getronics Under New Ownership Sets Sights on Revenues of €1bn by 2020

 

NelsonHall recently had a briefing with senior management at Getronics to discuss the merger of Connectis under the Getronics portfolio. In this short blog, I look at what the Connectis business brings to the wider Getronics group, the aspirational growth targets that have been set by new CEO Nana Baffour, and some of the key focus areas for Getronics moving forward.

Baffour became chairman and group CEO of Getronics in August 2017, following its acquisition from Aurelius for €220m, by Bottega InvestCo, of which Baffour is a majority shareholder. The Connectis business was acquired by Aurelius in 2012, providing applications and managed cloud services for ~500 clients in the Iberian Peninsula and Latin America Markets. It has ~2,400 employees, and a turnover of €130m.

Up until now, Connectis and Getronics have operated as separate entities, but in November 2017 Baffour announced the merger and integration of the two businesses (with combined revenues of ~€500m) under a new global Getronics branding – clearly indicating a greater desire from the new owners to operate as one company. Baffour also announced an ambitious strategy to increase revenues to $1bn by 2020, with 70% from acquisitions providing access to new geographies (people, tooling, experience in IoT and big data) or new industries; and 30% organic growth, which by our estimates would equate to ~26% targeted growth, of which ~8% will be organic. This will be no mean feat.

What does Connectis bring to Getronics?

Getronics has traditionally provided workplace management services, networks, UC&C and managed cloud services (through the 2016 acquisition of Colt’s managed cloud business).

Connectis’ primary target geography is Iberia; it also adds scale in Latin America (Brazil, Chile, and Argentina). It brings in application services capability, and industry-specific IP in the airports sector (currently focused on Spain), including mobile apps for passengers. Connectis also brings some datacenter management capabilities, which are more obviously complementary to Getronics’ infrastructure-centric portfolio.

Getronics is looking to cross-sell Connectis’ industry IP into its core geographies, focusing initially on the U.K. and Belgium. There have been some early wins in the U.K. airports sector, with Getronics supporting clients both onshore and from Connectis’ airport sector application maintenance center in Spain.

Getronics is also looking to cross-sell its portfolio into Connectis’ Iberian and Latin America regions; local management will retain autonomy in terms of go-to-market, a reflection of the importance of having local client relationships.

Utilizing field sales capability to target IoT-enabled opportunities

Getronics is looking to further develop its extensive field services capability, both within Getronics and through the wider Global Workspace Alliance (GWA), which it leads with its partner CompuCom (read recent CompuCom blog here). GWA has a network of 38k personnel, including 15k field services engineers, and supports 9.9m managed workspace assets and 6m users.

One initiative to expand the use of its field-force is the development of IoT-based offerings, installing and maintaining sensors and beacons. Other examples include managing drones in remote areas of Spain to check that building regulations have been met. In support of this, Getronics is forging partnerships with sensor and actuator manufacturers.

Emphasis on digital workplace

Getronics is also evolving its traditional service desk proposition to help clients evolve to a digital workplace. This includes an increased emphasis on the UX, providing a self-service and persona-led approach; also the Solution Café concept, providing walk-in tech support and training facilities, to further facilitate self-service capabilities.

Bottega looking to acquire to build on Getronics

Under its new ownership, Getronics is likely to follow the same acquisitive path it followed under previous owner Aurelius (who made five acquisitions). Baffour has set an aggressive M&A strategy. Of the target $1bn revenues by 2020, 70% will come from acquisitions, and 30% from organic growth, which would equate to ~26% targeted growth, of which ~18% will be inorganic growth.  

So, what should we expect to see in terms of inorganic growth? Initiatives we might expect include:

  • Adding capabilities that are complimentary to the aspirations around IoT-enabled product support. This might include small to medium-sized specialists in the utilities sector
  • Further expansion in Iberia
  • Baffour is also CEO of Grupo Cimcorp, a Brazilian IT infrastructure services vendor with 600 employees, and he may decide to bring it into the Getronics fold.

Getronics also has the potential to utilize its IP in the airports sector, across new geographies, and also its IoT Smart Spaces offering across health, transport, land use and malls.

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