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Explain your IT work to your children and parents in simple terms

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Explain your IT work to your children and parents in simple terms. In this blog post I explain the main concepts of the IT Services industry using simple terminologie. I find this useful when explaining my work to children, parents and grandparents. It is sometimes also useful to explain the IT market when I am discussing it with my clients. Especially when they are in a totally different type of work environment. Please also read the disclaimer at the bottom of this text.

What are IT Services?

IT-services are services that help businesses with their technology needs. This can include things like managing computers and networks, installing software, and providing technical support.

IT-services are important because they help businesses use technology effectively. For example, if a business has a lot of computers, they might need help managing them and making sure they are all running smoothly. An IT-services company can provide this help, which can save the business time and money.

IT-services can also be helpful for businesses that don’t have their own IT team. Instead of hiring and managing their own IT staff, they can use an IT-services company to provide the help they need on an as-needed basis.

Overall, IT services are services that help businesses with their technology needs, which can save them time and money and help them use technology effectively.

What does an IT Services company do?

An IT-services company is a business that provides IT services, like managing computers and networks, to other companies. This is different from a regular company, which might use IT-services, but doesn’t provide them to other businesses.

An IT-services company can help other businesses with a wide range of IT needs. For example, they might manage a company’s computers and networks, help them install new software, or provide technical support if something goes wrong with their technology.

IT-services companies are often helpful because they have specialized expertise and resources that other businesses might not have. This can be particularly helpful for small or medium-sized businesses that don’t have the budget or the need for a full-time IT-team.

Overall, an IT-services company is a business that provides IT services to other companies, which can be helpful because they have specialized expertise and resources.

What is IT Outsourcing?

IT-outsourcing is when a company uses another company to provide IT-services, like managing their computers and networks, instead of doing it themselves. This is different from having an in-house IT-team, which is when a company has its own employees who handle its IT needs.

Outsourcing IT can be helpful for companies because it allows them to access specialized expertise and resources without having to hire and manage their own IT staff. This can be more cost-effective and flexible than having an in-house team.

For example, if a company doesn’t have a lot of IT needs, it might not make sense for them to hire a full-time IT-team. Instead, they can use an outsourcing company to provide IT-services on an as-needed basis. This way, they can get the help they need without having to pay for full-time staff.

Overall, IT-outsourcing is when a company uses another company to provide IT-services, which can be helpful because it allows the company to access specialized expertise and resources without having to manage its own IT team.

What is Cloud Computing?

Cloud computing is a way for people and businesses to use technology services, like storing data and running programs, over the internet. This is different from using a computer or phone that has all the programs and data stored on it, because with cloud computing, the data and programs are stored on servers that are managed by other companies.

This means that people and businesses can access their data and programs from anywhere, as long as they have an internet connection. This is convenient because they don’t have to carry around a physical device, like a laptop or hard drive, to access their information.

Cloud computing is also often more secure than storing data on a personal device, because the servers that store the data are managed by professionals who make sure that the data is safe and backed up in case of any problems.

Overall, cloud computing is a way to use technology services over the internet, which is convenient and often more secure than storing data on a personal device.

What is Data Analytics?

Data analytics is the process of using data, or information, to understand patterns and trends. This can help people and businesses make better decisions by providing them with insights that they might not have seen otherwise.

For example, a company might use data analytics to understand how their customers are using their products. This could help them figure out which products are most popular, and where they can improve their products or services.

Data analytics can also be used to predict things, like how many people will visit a store in the future, or how much money a company will make in a year. This can help people and businesses plan for the future and make better decisions.

Overall, data analytics is the process of using data to understand patterns and trends, which can help people and businesses make better decisions and plan for the future.

What is ERP Software and what does it do?

ERP software, which stands for “enterprise resource planning” software, is a type of program that helps businesses manage their operations. This can include things like keeping track of inventory, managing finances, and planning production.

ERP software can be helpful for businesses because it allows them to keep all of their important information in one place, instead of having it spread across different programs or systems. This makes it easier for employees to access the information they need and helps the business run more smoothly.

For example, if a business uses ERP software to manage their inventory, they can see how much of a certain product they have in stock at any time. This can help them make better decisions about when to order more of that product, and avoid running out of stock.

Overall, ERP software is a program that helps businesses manage their operations, which can make it easier for employees to access important information and help the business run more smoothly.

Full Disclosure – I did not create this text

All text above explaining different aspects of IT Services were created by an AI service called ChatGPT (login here). The whole process of creating this blogpost took me 10 minutes using ChatGPT. In its own words, ChatGPT is:

I am Assistant, a large language model trained by OpenAI. I am a computer program that uses artificial intelligence (AI) to generate human-like text based on the input I receive. My purpose is to assist people with a wide range of tasks, including answering questions, providing information, and generating human-like text.

I operate by analyzing the input I receive and using my training data and AI algorithms to generate a response. My training data comes from a wide variety of sources, including books, articles, and websites, and I use this data to learn the patterns and structures of human language. This allows me to generate text that is similar to what a human might write or say.

Overall, I am a large language model trained by OpenAI, and my purpose is to assist people with a wide range of tasks using artificial intelligence. I operate by analyzing the input I receive and using my training data and AI algorithms to generate a response.

Atos SE FAQ: 3 reasons why Atos is splitting up (and 1 why not)

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Why would you want to split a company with +/- 11 bn Euro revenue and +/- 112.000 employees? It is not a small undertaking and for sure not a decision a leadership team would take lightly. What are, in my opinion, the key reasons behind this decision?

split the money
image by http://taxrebate.org.uk/

As a regular analyst and commentator on Atos’ strategy, and the IT Services industry in general, I speak often with 3rd party advisors, investment firms and other interested parties. These conversations address a wide spectrum of topics, ranging from financials, competitors, and unique selling points, all the way to how to build the right sales or delivery teams.

There are however some questions that frequently pop-up in these conversations. So, I thought I might spend some time answering them in a new series of blog posts.

Today we will look at 5 reasons why Atos is going to split the company in 2 new public companies.

On June 14, 2022 Atos announced a plan to study “a possible separation into two publicly listed companies to unlock value and implement an ambitious transformation plan“. And in the communications on the third quarter results, confirmed that “The separation project is well on track to be completed in H2 2023 as initially planned“.

1. Declining revenue and margins in IT infrastructure services

Mostly due to the rise of public cloud providers such as Amazon, Microsoft and Google, a lot of software is moving to the cloud. This results in a steep decline in the cost of running these applications. In the public cloud the infrastructure can be shared. Management can be highly automated. And locations can be transparent allowing for even more flexibility in costs. Cloud computing also takes away the need for local, privately owned, data centers. And companies are embracing cloud computing en masse. In 2018 Gartner predicted that “Around 10% of enterprise-generated data is created and processed outside a traditional centralized data center or cloud. By 2025, Gartner predicts this figure will reach 75%”.

Atos’ problem is that a significant portion of their IT services revenue and assets are still not cloud-based. Atos owns and operates still many datacenters and needs customers to fill those with hardware and software.

This “move to the cloud” is not only a problem for Atos. In recent history also IBM decided to split off their IT Infrastructure Services in a newly formed company Kyndryl. And in April 2017, HP performed a similar action when it split-merged their infrastructure services with CSC.

2. Create a clearer strategy

The one company that Atos is today is a bit of a collection of IT topics that not necessarily work together. In some cases, they might even be competitive. This makes it harder to create a single strategy across all offerings of the company. By splitting the company in two, the two components can focus on their respective strengths without (negatively) impact the other. E.g., the part that offers infrastructure services can focus on customers that have a need for local and/or physical datacenters.

3. Workforce challenges

There is a very big difference between the attributes of a workforce oriented on traditional Infrastructure Outsourcing Business, versus the more innovative oriented business of Digital and Data Analytic services. While the workforce for the services provided in infrastructure come most of the time from the customers of Atos that outsource their business to Atos, the growth business in Digital is dependent on recruiting new talents.

When the traditional outsourcing services are dwindling, and the Digital Services are growing, Atos’ needs to hire and/or educate more and more people in a market that is already short on potential candidates. At the same time a growing part of the workforce, that is most of the time local (meaning ‘not in off-shore countries’), is generally not immediately fit to move into this new technical territory.

Recruiting new staff, both off-shore and local, will be easier if the profile of the company is not about traditional services, but instead radiates innovation and ‘cool’ technologies.

… and why should Atos not split the company?

Ever since I have been made aware of the strategy of Tesla, I believe firmly that ‘verticalization’ is a very strong asset for any company. If Atos can bring in verticalization in its offerings, it could build some very strong offerings.

Atos can combine their scale, their own hardware, software, services, and consulting skills into a mix that allows customers to work with them, instead of Atos being a contractor if separate IT services. Today Atos has all these assets under one roof and that sets the company apart even from their biggest competitors. I consider this to be a huge opportunity. And it can be implemented gradually, with a focus on the most profitable business topics first. And I think that such a program would cost less that the investment that Atos is currently raising to pay for the split.

It seems to me that previous Atos leadership teams, most notably their former CEO Thierry Breton, understood this. And it is a shame that recent leadership by Elie Girard and later Rodolphe Belmer, were unable to build on his legacy and vision.

Disclaimer: Paul, who is the author of this blog post, holds at time of writing a small amount of stocks in Atos SE. All information in this blog post is believed to be public information, enriched with the authors personal opinion. No confidential information is being shared.

Atos SE FAQ: 1. Which Assets is Atos selling?

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As a regular analyst and commentator on Atos SE strategy, and the IT Services industry in general, I speak with 3rd party advisors, investment firms and other interested parties. These conversations address a wide spectrum of topics, ranging from financials, competitors and unique selling points, all the way to how to build the right sales or delivery teams.

Atos Logo
Image is copyright of Atos SE

There are however some questions that frequently pop-up in these conversations. So i thought I might spend some time answering them in a new series of blog posts.

Today we will address the topic of Atos selling assets.

On June 14, 2022 Atos organised a Capital Markets Day and presented a storyline about their strategy for the future of the company. In that presentation the company announced their plans to split the company in 2 parts. This is obviously a very ambitious plan, which is I believe a result of a thorough market review and taking conclusions from serious market situation consequences for companies like Atos.

The presentation shown at that event, shows on slide 22 that Atos will sell 700 million euro of Non-Core Assets by 2023. The recurring question in my conversations with clients and interested parties since then has been; what are the None-Core Assets that Atos is planning to sell?

It is my understanding that the first asset that Atos sold as part of this strategy was their remaining stake in Wordline.

This was announced on June 14, 2022.

“As a result of the placement and derivative transaction, Atos has raised net proceeds of ca. €220 million” (link)

The second intended sale of a non-core asset was announced on November 17, 2022. At that date Atos put out a press release informing us of entering into exclusive negotiations to sell Atos Italia S.p.A.

Atos, a global leader in digital transformation, today announces that it has entered into exclusive negotiations with Lutech S.p.A. (“Lutech”), an Italian provider of IT services and solutions, for the sale of its Italian operations (“Atos Italia”) with a 100% cash consideration. (link)

The size of the 2nd sale of a None-Core Asset is not fully disclosed. And Atos says that with this sell they would achieve 2/3 of the intended 700 million euro divestment program. So with the 220 million from selling their remaining stake in Worldline, we can now guestimate the size of this Atos Italia deal to be around 240 million euro.

The third part of the divestment program to raise the announced 700 million euro, is yet to be disclosed. There might be even more parts following.

However, according to Diane Galbe (senior vice president in charge of strategy and mergers and acquisitions at Atos), confirmed in an article in the Financial Post that “…Atos was still seeking a buyer for some of its Unified Communications & Collaboration (UCC) legacy activities.“. This can then be the 3rd leg under their divestment program, or maybe more legs will be needed.

We will have to wait and see how this plays out. But it seems Atos is well underway to secure financing of their ambitious plans for 2023.

Disclaimer: Paul, who is the author of this blog post, holds at time of writing a small amount of stocks in Atos SE. All information in this blog post is believed to be public information, enriched with the authors personal opinion. No confidential information is being shared.

IoT is not a revolution

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As an IoT specialist I get asked many times about the newest and greatest in the field of IoT. Sometimes investors want to know about the newest start-ups or technologies – ‘where should I invest?‘.

This type of question is difficult to answer as people seem to want to find the next new tool or not-yet-invented method to solve a large array of problems.

It is my opinion that at this time the focus of the questions should not be on technologies or methods; the focus should be on specific use-cases and particular application objectives.

The wave of increased digitalization has brought with it the challenge to find the best place to use these digital technologies, and the search sometimes brings places that are a good fit, but also places that are a bad fit.

We see this in the application of IoT in the consumer space (a microwave with an internet connection?) and in the business space as well.

As a result of this search and the fear-of-missing-out on this new revolution, many proof of concepts are executed and the digital enablement of devices is introduced ‘because we can and it may bring value’.

I have been a witness to many of these proof of concepts where a solid understanding of their impact on the business was not taken into account. This is innovation because ‘we need to innovate’.

The real value is not to be found in the utilization of new technologies or methods, instead it is to be found in the impact on your business process and certainly on the product or service that you provide.

The purpose should not be to monitor temperature of your factory, office, or house; the purpose should be to create a healthier and safer working and living environment.

The revolution is not to measure and use IoT to do so, it is to be found in the improvements you can implement consequently.

My advice to all that are looking for the best new IoT invention, technology or method is to first look at what you want to achieve and I would expect that you would very probably be able to use existing technologies to achieve your objectives.

(About the picture at the top: This Photo by Unknown Author is licensed under CC BY-NC)

The Journey to Managed Enterprise IoT – Part 3 – Beyond the use case

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<This blog was previously published at the Atos Thought Leadership website – it was written by Philip Griffiths>

In the 1st blog in the series, an overview was shared of the journey to managed enterprise IoT, which we divide into three levels of maturity. In my second post you will learn more about the first level: Enabling the use case.

Once you have determined the IoT use case you need to ensure that the solution is secure, accurate and predictable – i.e. it delivers sustainable value – in the face of increasing quality of devices, edges, continuous data flows, and technologies. This is enabled through ‘non-functional requirements’ (NFRs) and spans both execution qualities and evolution qualities. This is going ‘beyond the use case’.

By focusing on ‘how’ the use case is delivered, instead of ‘what’, you can realize the following benefits:

  • Quality: If your products and services cannot extract value, the data, and opportunities, it is lost.
  • Risk: Complex IoT use cases can put business continuity at risk; reduce it through strong NFRs.
  • Productivity: A use case has little value if it stops working after 6 months or in peak load periods.
  • Future-proofing: Your system should be built for low cost and simple improvements / evolution.

Realizing this require you to define, discuss, document, and design your NFRs as you enable the use case and beyond it. Extending the timeline from the previous post, the following activities take around 12-24 months:

  1. Project: Design solution, install and implement IoT solution from core to edge, integrate into your existing business systems as well as ensure system security – including building ecosystem of partners.
  2. Business Platform: Scale-up and industrialize the use case to a full platform, do further roll-outs, integrate into your existing business and enhance parts of the system to delivery sustainable value.

Below is a non-exhaustive list of topics and example questions to be considered for NFRs:

NFR Topic Example Questions
Execution Availability Does your E2E use case need an operational uptime of 99.99% or 95%?
Continuity What are you E2E RTO/RPO? What are the business impact / cost of your use cases being down for 1 or 60 minutes? How does this impact backup or disaster recovery? How do you enable HA, backup or disaster recovery in a distributed architecture?
Manageability How will you update millions of devices? When and how to push new functionality? How to handle a million+ devices all calling home sick? Will you have 24×7 operations?
Interoperability  How will data be handled across different silos? Do your platforms work together?
Performance How quickly do you need to access the data? Does it need to be processed at edge?
Resilience How will the system do backups and ensure service continuity? How will you ensure high uptime of distributed architecture? How will errors be handled ‘gracefully’?
Security How will data from connected objects be trusted? How will you ensure security in new and high risk environments? How will you reduce attack surface? How will you ensure internal and external compliance, auditability as well as alignment to standards?
Usability How will you reduce the head count of managing such E2E complexity? How will you optimize latency issues to improve real-time outcomes and / or use experience?
Evolution Maintainability How will defects be corrected? Will the system and components have self-healing? How will uptime be ensured without sending people / parts onsite?
Modularity Will your system be built on principles of separate independent functionality?
Scalability Will it scale up/down to meet peak demands?

 By focusing on ‘how’ you enable value from and not just ‘what’ the use case is you will derive much greater long term value for your business. To do this, you need to define, discuss, document and design them into the use case from the start. If you are not already doing this I suggest you look at facilitating it as soon as possible.

I have spoken to many clients who have rolled out IoT solutions which are ‘the future of the businesses’. It is therefore unfortunate when they stop working effectively or if the operations team only know of problems when they are informed by the customer. It is normally at this point that they ask for expertise on going ‘beyond the use case’.  A few common outcomes are re-building the app, creating a new platform, facilitating rapid scalability or enabling an operations team with E2E monitoring; either way, it costs time and money that were not predicted in the business case.

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