by Martin Veitch

Atos Origin chief on EDS-BSkyB, Olympics, elections and man-to-man marking

Feb 16, 2010
IT Strategy

With Atos Origin announcing financials that appeared to show an improvement in the group’s fortunes (and with analyst TechMarketView suggesting that the firm has entered the Top 10 in UK software and IT services companies for 2009), I spoke by phone this morning to UK CEO Keith Wilman about what’s going on at Atos and in the sector. Here are the highlights of our conversation.

On turning around Atos Origin after the series of M&A manoeuvres that created the brand, Wilman said that bringing together disparate elements of the business was critical.

“We’ve focused on what we felt we were good at, and got the businesses integrated. A lot of services companies run service lines of systems integration, business consulting and managed operations, but a client doesn’t want to know about that. We’ve started to look like a joined-up company so we can cross-sell and up-sell. Before, we didn’t present the entire capability.”

That integration has led Atos to being able to offer “dream clients” like the Department for Work and Pensions a suite of services from business process outsourcing to application development and to stretch its portfolio at the Ministry of Defence. 

And what of the elephant on the table for all IT services firms now: the fall-out from the HP-EDS/BSkyB court case?

Wilman said that “it always takes two to tango” and the fault may have risen in the pair not agreeing on terms early on and not ironing out problems in a timely fashion. Problems arise “when you get in a mess and things are left to fester”.

But will the penalties against HP-EDS mean that in future both sides of the outsourcing relationship take more time to figure out outsourcing deals?

“I think it will. Both sides will have to understand what they’ve entered into. Before, things were left grey and now they’ll be black and white and that will be good for the industry because there won’t be so many trailing ends.”

Speaking of elephants, another one comes in the shape of the impending general election with the Tories (and, to a lesser extent, Labour) committed to reducing public-sector spending, I suggested. With Atos’s income about a 60/40 split between public and private sector, does that mean reduced revenue?

Wilman contended that “the money will be spent but in a different way” with utility-based “per-click” services that deliver a small amount of revenue for Atos and other services outfits on transactions such as car tax payments. This might reduce spikiness of spending but it will also encourage those who can “develop once and sell to many”.

Another hope is that there is reduced “man-to-man marking” with consultants operating in the public sector being watched by squadrons of observer consultants to ensure they are doing their jobs properly and that value is being delivered to taxpayers.

Atos might not have the brand recognition of an IBM, HP or Accenture over here but that could change when it helps deliver the Olympics to London in 2012 as part of a long-running deal to deploy technology at the Games around the world. With Oracle being linked to a services acquisition and offshore giants continuing to grow, the entire services sector could of course look very different by that point.