Key Findings & Highlights:

Unisys introduced its IT services unit in 1992, and in 1997 began to position as “a services-led, technology-enabled solutions provider”. By 2007, services accounted for 87% of its total revenues, up from 70% in 2000. This revenue proportion between services and technology has remained constant since, with services accounting for 85% of total revenues in CY 2016.

Cloud and infrastructure services are the largest components of Unisys' services, accounting for ~50% of total corporate revenues. It is growing quickly, with 209% TCV growth in 2017. Unisys is growing significantly outside of the U.S. and Canada, which accounts for nearly half of its business.

Unisys' total revenues for CY 2017 were $2.7bn. Unisys reported that its Cloud & Infrastructure Services revenues were ~50% of this total, or $1.35bn.

NelsonHall estimates that ~20% (~$270m) of this is associated with cloud services, and of this it estimates that ~15% (~$41m) is related to cloud advisory, assessment, and migration services.

Similarly, Unisys is placing greater emphasis on its cloud consulting capabilities. It has doubled its cloud consulting workforce since 2016, and plans to double it again by the end of 2018. Unisys estimates that more than half of all cloud consulting engagements lead to, or are delivered with, additional cloud services.

With infrastructure services accounting for ~50% of revenues, Unisys has developed capabilities to enable migration from a legacy environment to cloud. These capabilities underpin the company's focus on growing consulting capabilities, and in parallel are complementary to its core security offerings and mainframe technology offerings.

Globally, Unisys has ~2,465 FTEs across cloud advisory and migration services. Unisys currently has a dedicated cloud consulting capability of 62 employees, primarily located in the U.S. and Canada. It is targeting to double this team by the end of 2018. It also has 240 employees globally who have been certified by AWS or Azure.

To deliver cloud advisory and migration, Unisys houses employees in 11 delivery centers, with a combination of onshore centers for restricted work (e.g. supporting U.S. federal), nearshore centers, and offshore for cost efficiency. Unisys primarily delivers advisory services from on-site working with the client. Its delivery center personnel focus on cloud migration activities; acting as a factory for remediating applications to operate in the cloud including addressing all integration and security requirements.

Unisys has a strong motivation to target cloud services for growth, given its broad legacy infrastructure client base. This is particularly the case for the public sector and North America, where it has a strong footprint. It has therefore made a significant investment in growing its cloud services, particularly in the area of up-front consulting. It has doubled its cloud consulting capability over the last two years and is planning to double it again by the end of 2018. This will be significant, as cloud services are increasingly focused on migrating full enterprises and acting as a foundation of digital transformation, both of which typically require significant consulting support.

To drive its cloud advisory and migration practice Unisys is leveraging its strength in security and end to end cloud services. With security a significant concern for many clients in adopting cloud, Unisys' Stealth offering and consulting capabilities position it well for public sector clients (that make up ~50% of its client footprint). It will need to continue to use these capabilities to expand its footprint into security conscious industries such as financial services. It can also use these capabilities to expand geographically.

A continued investment in growing consulting capabilities and automated tools to accelerate migration will complement its security, cloud management, and private cloud hosting offerings.