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Summary

The June update saw a surge in deals for Atos into our IT Services Contracts Analytics database. Atos specializes in offering digital transformation services – helping to transform clients' business processes – and the new deals show its versatility in the digitization of industry.

Atos

Atos won numerous contracts in June including two deals with energy operators National Grid and Dong Energy (now Ørsted) and a managed cloud and digital transformation deal with clothing manufacturer Damart:

  • The deal between Atos and National Grid is to provide digital managed workplace services across National Grid's UK and Northeastern US operations. Ovum has estimated the total contract value (TCV) for the deal at $150m over an estimated term of five years, based on comparable sector deals. Atos will deliver technology and data analytics and will implement new and smart workplace services solutions for the energy operator.

  • The five-year Ørsted deal consists of providing communications solutions based on TETRA (terrestrial trunked radio) technology for two offshore wind farms off the coast of Changhua County in Taiwan. Ovum has estimated the TCV at $8m, based on comparable deals. Ørsted has divested its oil and gas business to focus on investment in renewables such as wind energy. Atos will supply a "comprehensive" communications solution and be responsible for the whole value chain.

  • Atos also entered into a six-year contract with fashion and home-shopping retailer Damart, which Ovum has estimated more conservatively at $14m TCV, because of the emphasis on third-party cloud services. This is a good example of a managed cloud arrangement, in which the lead service provider migrates and manages the customer infrastructure across different private and public cloud services. Damart will use a cloud solution combining Google Cloud Platform and Atos' Digital Private Cloud platform.

Earlier this year, Atos reported that nonrenewal of some large contracts in North America had slowed revenue growth in 2018, so these orders and renewals – together with the publicly disclosed £30m ($38m) extension of an infrastructure support deal with the UK's Department of Health and Social Care (DHSC) – will be welcome news. These deals show that digital transformation is still a vital concept in the IT services industry. Digital transformation and managed cloud deals are scaling thanks to an increase in demand for modernizing and reinventing processes and workplaces. The Damart deal is not the biggest, but it suggests that Atos can bring its cloud resources into effect in a way that hyperscalers are doing for industry customers (AWS and Samsung Heavy Industries, Microsoft and Campbell Soup).

Appendix

Further reading

IT Services Contracts Analytics, www.ovumkc.com

IT Services in Transition: Atos, ENS004-000058 (April 2019)

Service Provider Snapshot: Atos, ENS002-000065 (March 2019)

Author

Anushree Agarwal, Analyst, Ovum Telecom

anushree.agarwal.SGA@ovum.com

David Molony, Principal Analyst, Enterprise Services

david.molony@ovum.com

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