The group wants to become more profitable in Germany

Bull supercomputers

Atos has a broad portfolio, including the supercomputers from its subsidiary Bull.

(Foto: Bloomberg)

Munich, Düsseldorf In the corona crisis, some managers changed their attitude towards home office. Elie Girard, head of the largest European IT service provider Atos, is also one of them: “Covid has challenged previous views about home office and mobile working. For me too, ”the manager admits. “It can be very efficient, and I now have a lot more direct customer appointments than before when it was normal to travel.”

Many managers are currently doing this – and this is where the opportunity lies for Atos: “The proportion of home offices will double from 20 to 40 percent,” says Girard. Many companies, including large ones, are still busy with the changeover.

The French group, which is one of the leading service providers for digital workplace technologies in Europe, has received many new orders. “With a lot of customers, we start from scratch to prepare the workplace for the new normal,” says Girard. Business should continue to benefit from the second wave of infections.

However, this does not fully compensate for the losses caused by the crisis: In the third quarter, sales fell on a comparable basis by 3.5 percent to 2.6 billion euros. Business with industrial customers even fell by almost 13 percent. Nevertheless, Girard is convinced: “During the crisis we were more resilient than many other companies in our industry.”

Atos’ portfolio is broad: It includes classic IT outsourcing, cloud services, cybersecurity solutions and even quantum computers.

Accelerated move to the cloud

This breadth helps in a crisis. Defense and public sector activities helped stabilize business. For example, Atos is leading an EU pilot project on the use of artificial intelligence in agriculture.

In addition, incoming orders at Atos increased again significantly. Experts expect a digitization boost in many industries. “Although the corona pandemic led to the postponement or cancellation of some IT projects, IT service providers still expect a high level of demand for some topics in the current and coming year,” report the market researchers from Lünendonk in a current study.

Atos CEO Girard is also confident: “In the medium term, we expect an increase in sales of five to seven percent per year. That is a very nice acceleration ”, he tells the Handelsblatt. He sees an ever stronger push when moving to the cloud – “especially for business-critical applications”. So far, it has mainly been about data that could simply be moved to the cloud and that did not require any special protection. That is changing now.

Acts-Chef Elie Girard

“We were more resilient than many other companies in our industry during the crisis,” says the manager.

The second trend that Atos wants to benefit from is the increasing demand for more IT security: “Cyber ​​attacks have increased during the corona crisis. As a result, the need for cybersecurity solutions has increased significantly, ”says Girard.

The trend towards home office increases the vulnerability of companies. Although there are many new rules, it requires great discipline from employees to adhere to them. “This requires a cultural adjustment,” Girard is convinced.

The aim of providers like Atos is to prevent attacks in advance with the help of data analysts. This succeeds in around 70 percent of the cases without the user noticing anything. And only recently, the group took over SEC Consult, a consulting company that checks the security of IT systems and advises customers on IT security strategies.

The third trend is decarbonization: Atos wants to become climate neutral itself by 2023, and the group also wants to help customers reduce climate emissions.

Acts-Logo

In Germany, the French company has been one of the major providers since it took over the IT business from Siemens.


(Photo: Reuters)

Low profitability in Germany

Atos sees itself among the IT companies in Germany – also thanks to the takeover of Siemens-Business almost ten years ago – all in all as number one. The experts from Lünendonk lead the French in seventh place in the IT consultant and system integrator segment with a turnover of 710 million euros.

With an operating return on sales of eight percent in the first half of the year, Atos is one of the more profitable IT service providers. For the year as a whole, Girard is aiming for 9.0 to 9.5 percent. In Germany, however, the margins are worse. “Germany is a crucial market for Atos, but our profitability is lower here than in the rest of the world,” admits Girard.

One of the reasons: So far, Atos has had a large business with so-called managed services in Germany, which means, for example, taking care of the operation of data centers on behalf of customers. In the future, high-margin future topics such as the cloud, IT security and quantum computers should play a more important role.

An important pillar for Atos is the partnership with Siemens, which has developed better than even the two partners themselves probably expected. Siemens sold its IT division SIS to the French in 2011. Commissions and joint research projects were agreed as a kind of dowry.

It turned out that both sides benefit from the alliance. Over the years, the joint order volume has totaled several billion euros. Atos has already installed Mindsphere, the Siemens platform for the Internet of Things, for some customers.

What was initially only intended to facilitate the transition from Siemens to Atos has now become a permanent relationship. A few weeks ago, the two companies extended their strategic alliance for another five years.

Joint deals worth three billion euros are planned. “We will continue to pool the strengths and know-how of the two companies in the future in order to offer our customers innovative digital solutions and use additional sales opportunities,” said the future Siemens boss Roland Busch.

However, according to industry experts, the former takeover of SIS could also be partly responsible for the lower margins in this country. The number of employees in Germany is relatively high compared to sales.

Atos sees itself as a pioneer when it comes to quantum computers. “We will be the first to present an industrial application that uses quantum computing technology at the end of the year,” said Girard. There is currently a lot of confusion in the market and lots of announcements to get attention. “Terms are often not properly separated: Qbits are not spins and vice versa.” With its “Quantum Learning Machine”, Atos offers the only solution “that supports all technologies”.

More: Atos hopes for the cloud and quantum computers

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