After some turbulent years, Atos seems to be back in calmer waters. How does the company view its future and that of its customers? And what lessons has it learned from the past? Techzine discusses this with Hans Koolen, CEO of Atos Netherlands.
Atos has experienced what it means to be a company in trouble. Koolen, who has been in his current role since April last year, now even uses the turbulence surrounding his own company as a conversation starter with customers. He asks them directly what their plan B is if an IT service provider unexpectedly goes under. According to Koolen, an organization that relies on a single party or platform for its IT sourcing for many years runs a considerable risk. In the long run, one can expect unpleasant news, such as the customer urgently needing an alternative supplier.
More than middleware
Atos has emerged from its troubled years, but its customer base has remained loyal. According to Koolen, 89 percent of these customers have been with the company for more than ten years. However, Koolen says there is no question of unwanted vendor lock-in. “The lock-in that could exist is that people are simply really satisfied,” he says. Atos acts as a system integrator for these organizations and often talks to customers at the management level about the underlying challenges for business operations. The importance of such a sustainable, flexible collaboration is significant; Koolen points out that of the original Fortune 500 companies, only 30 remain, because the rest were generally unable to adapt sufficiently to the times.
Looking ahead, Atos wants to position itself emphatically as a fully-fledged technology company with its own platforms. It therefore does not want to act solely as a ‘middleware layer’, as Koolen describes it. The company is strongly committed to the private and sovereign cloud. According to Koolen, 80 percent of the functionalities that customers use in the public cloud are also available in the private cloud. Research also shows that a third of the companies surveyed are actively repatriating data from the public cloud.
This is partly due to unfulfilled expectations surrounding cloud migrations. Koolen argues that so-called ‘lift-and-shift’ techniques, such as moving a monolithic SAP S4 system to the cloud without modification, make little sense. It offers no scalability and makes the constant stream of innovations from hyperscalers hardly applicable. One might wonder whether this can be characterized as a failed cloud migration. After all, if you have truly started working in a cloud-native way in the cloud, you have not only made better use of this environment as a scalable resource, but you can always move your IT environment. That is, after all, what the ‘composability’ of this approach results in. The question is whether parties that have not made this migration can now succeed in a sovereign environment, whether that is on-premises or in someone else’s data center. According to Koolen, Atos should focus more on helping with this.
Technical debt
According to Koolen, technical debt should be a crucial topic in those boardrooms. “I certainly believe that we, like other MSPs, can do more to get the topic of technical debt on the agenda and keep it there,” he emphasizes. He sees the focus on the technical foundation as the necessary flip side of the constant discussions about AI acceleration. If you implement AI without having the data available and being able to switch systems flexibly, the new technology may only lead to new problems.
Koolen therefore advocates putting technical debt as an actual item on the company balance sheet. Exactly how this should be done is open to discussion, as it is not easy to audit. However, only when it is financially qualified will there be an urgency among senior management to apply professional lifecycle management. This does not mean that everything has to be blindly renewed: according to him, companies can continue to run on an existing and stable mainframe, as long as the platform does not hinder them in implementing necessary changes.
This brings us to the analyses that the company performs for its customers, which are inevitably somewhat subjective, or at least require consultation and customization. Fortunately, Atos has known its customers for a long time, so the need for legacy IT systems does not simply end up in the technical debt column. However, the lack of innovation in outdated IT applications or being stuck with old licenses is a real cost item that should be better reflected in the balance sheet.
We are getting older
The need to modernize is further driven by what Koolen calls the “demographic reality.” Due to the aging population, the available workforce in the Netherlands is decreasing by 50,000 people annually, he says. AI can and must play an important role in filling that gap, but according to Koolen, AI technology is not an end in itself. “Your business challenge is not that you don’t have AI. Your business challenge is that you can’t find people,” he concludes. AI is therefore not a lifeline or a replacement.
For Atos, the current challenge is to maintain a sharp sense of direction. The company has chosen to focus on sectors where it has traditionally been strong and is investing €100 million in R&D for specific niche markets. Atos currently serves five of the six major players in European healthcare and has a strong position in the public sector and defense. When it comes to choosing technology partners, Koolen promises that Atos will continue to operate independently and “color blind.”
In retrospect, the turbulent years do not seem to have harmed the company. Koolen notes that customers have appreciated Atos’s survival instinct. External help was also involved. Moreover, the rescue of the company is only the beginning. The next step will take years, in the form of the Genesis plan. Costs must be reduced and debts must be paid off. The entire workforce must be 100 percent AI-trained this year. R&D will have hundreds of millions of euros at its disposal. These are significant changes that will undoubtedly encounter obstacles along the way. It is a test of the ability to change, which is precisely what Atos is trying to encourage in its customers. In this regard, it will have to serve as a textbook example of how this can be done.