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)

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?

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.