2018-19: The years of digital dividend at Atos

PAC recently attended the Atos global analyst day, and while the company had a lot to say on many fronts (with notably high emphasis on IoT developments) this is our quick take on the company’s direction in cloud and infrastructure services.

Atos groups together its digital and infrastructure transformation capabilities under the slightly wordy banner of “Atos Canopy Orchestrated Hybrid Cloud”. While tech naming is often gratuitously hipsterish, this uncool portfolio brand does clearly signpost Atos’ strategic goal: to deliver a heterogeneous blend of the most popular cloud technologies, within a single integrated and (as far as possible) automated platform. 

While that goal may seem a little generic, the truth is that only a few other providers have a co-ordinated approach to delivering the full suite of Enterprise cloud options. Most providers opt instead for parallel cloud silos rather than integrated delivery and operations, simply because - in the short term at least - it’s so much easier. 

The key to Atos’ orchestration is their significant investment in ServiceNow, the IT Service Managament platform of choice for much of the large Enterprise segment. Just over a year ago, Atos became a ServiceNow Gold Services Partner through its acquisition of UK-based Engage ESM, giving Atos a step-function increase in its ability to automate the management of its customers’ environments. Through focus and growth, Atos has become one of the largest users of ServiceNow, which also enables very attractive economies of scale.

In terms of underlying technologies, Atos maintains a Swiss-style neutrality – sensibly, since it enables them to align (and not fight) with their prospects’ entrenched platform preferences. The suite today encompasses VMware private clouds on a choice of hardware;  Azure, Google and AWS in the public cloud, as well as Oracle cloud (to accommodate that company’s very “special” license fees for cloud deployment), and Azure Stack for customers looking for highly interoperable on- and off-premises hybrid cloud solution. 

Considering the Enterprise profile of Atos’ customer base, its lessons from the trenches are eye-opening:  most Enterprises still significantly under-estimate their internal talent gap both in terms of formulating a coherent cloud strategy, and also in for ongoing management. While these are arguably self-serving findings for a major provider of cloud advisory and management services, there’s no doubting that Atos has the more experience than most on which to base their opinions. 

Like PAC, Atos estimates that the current hybrid and multicloud phase of IT consumption will persist for many years to come. Constrained resources, limited bandwidth, conflicting priorities and straightforward inertia have a strong track record of slowing technology refresh cycles. Combined with the attractive economics of running more constant heavy workloads in private rather than public clouds, Atos’ assessment that Hybrid is not a short -or medium-term transitional phase rings true. 

In response, Atos is hiring in resources to address continued strong growth in demand for their cloud and infrastructure division, where availability of expertise is a constraining factor on the volume of business they can take on. To further alleviate this, the company is continuing to develop further automation, in the form of intelligent bots, AI enabled system automation, and further ServiceNow integrations. 

Overall Atos’ story is convincing: the company is well-positioned to deliver to Enterprise needs for hybrid optimization and integration, and looks set to maintain the pace of innovation as it starts to integrate SD-WAN capabilities into its existing IT infrastructure management offers. Atos believes that 2018-19 will be the years of digital dividends for their customers, with the acceleration of cloudification, cybersecurity and artificial intelligence - key trends that Atos is determined to capitalise on.