Atos grows revenues through digital offerings and cross-selling

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Atos uses security to enable clients’ adoption of next-generation solutions, says Elitsa Bakalova, senior analyst at TBR.

Atos sustained its growth momentum and increased revenue by 1.8 percent year-to-year organically in 3Q16, indicating the company’s strategy to cross-sell its portfolio and develop next-generation digital solutions is working. A more established consulting presence will help Atos enhance the value proposition of its business outcomes and expand its digital transformation activities.

Automation in infrastructure services will help Atos compensate for the costs associated with onshore hiring and reskilling existing employees around next-generation solutions and improve profitability to reach the company’s operating margin expectation of 9.2 percent to 9.5 percent for the full year 2016, up from 8.3 percent operating margin in 2015.

Expanded and integrated security services and products position Atos to grow in the segment across industries, such as manufacturing and public sector

Atos is actively developing its security services capabilities by opening new facilities, such as a new Security Operations Center (SOC) in Timisoara, Romania. Partnering with technology vendors allows Atos to combine services with products into solutions, such as its alliances with Guidance Software for forensic security, with Siemens to provide security services and products for the manufacturing industry, with Marsh to provide products and services that address cyber risks and with CyberArk to provide Privileged Access Management, a service that protects against cyberattacks that target and exploit privileged account credentials.

While Atos’ competitors are expanding their cybersecurity capabilities and creating growth barriers for the company, TBR expects Atos to apply its defense experience and infrastructure investments to advance in the security market, notably in the public sector by using its security services and products from its technological brand Bull.

Acquisitions enable Atos to expand its resources in North America, gain proximity to clients and establish as a viable competitor in the region

Targeting the growing healthcare IT services market, in September Atos acquired Anthelio Healthcare Solutions (Anthelio). The acquisition strengthens Atos’ digital health services portfolio in the U.S. adding Anthelio’s suite of healthcare IT services, IP-based revenue cycle management (RCM) services and patient enablement solutions and $200 million in revenue to Atos’ $200 million healthcare revenue in North America.

The acquisition is in line with Atos’ strategy to expand its industry-specialized and managed services capabilities and with overall healthcare IT services (HITS) trends in the region. According to TBR’s Healthcare IT Services Benchmark, health IT outlays are shifting from electronic health records to recurring services such as hosting, outsourcing, managed services, RCM and population health management, which are being delivered via cloud-based platforms with greater regularity.

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