SHARE



ABOUT THE AUTHOR


Sheila McGee-Smith
Sheila McGee-Smith, who founded McGee-Smith Analytics in 2001, is a leading communications industry analyst and strategic consultant focused on the...
Read Full Bio >>
SHARE



Sheila McGee-Smith | January 25, 2016 |

 
   

Atos + Unify: the Next Wave in Market Restructuring?

Atos + Unify: the Next Wave in Market Restructuring? The Atos/Unify combination will center on enabling digital transformation rather than on promoting specific products or services.

The Atos/Unify combination will center on enabling digital transformation rather than on promoting specific products or services.

Two years ago in the post "Big Deals: The Year in Mergers, Acquisitions, and Consolidation," No Jitter Publisher Eric Krapf reflected on what he considered the most intriguing deals of the year: Mitel's Aastra acquisition and Oracle's Acme Packet and Tekelec purchases. He described the former as industry consolidation but the latter two as moves aimed at creating a new model of providing communications capabilities to enterprises.

Fast-forward to today, and "creating a new model of providing communications" certainly seems to be an apt description of Atos's goal in acquiring Unify. During the company's annual analyst summit that took place last week, Unify and Atos executives added new perspectives on the now-finalized combination.

Perhaps not so well-known to No Jitter readers, Atos is an approximately $13 billion European IT services corporation that provides consulting, managed services, and systems integration. The Unify purchase is not the only one that gives Atos, which is headquartered in Bezons, France, a growing presence in North America. In June 2015, it bought Xerox ITO, with 9,600 employees, for close to $1 billion. With that move, the U.S. became Atos's largest market. Its U.S. base could grow even larger, should Atos be successful in its reported bid to acquire Dell's Perot Systems, a move widely covered in the financial press.

As a global systems integration giant, Atos is adding a Unify business that over the years has seen more and more of its revenues come from services rather than products. As you can see below, hardware and software accounted for just 32% of Unify revenue in its fiscal year 2015 (as a point of comparison, Avaya posted product revenues of 49.7% for FY15, while Mitel product revenues hit 61.8% through the first three quarters of 2015). The graphic, which Atos used in its third-quarter 2015 financial analyst presentation and shared with industry analysts last week, offers a closer look at Unify financials than has been available since The Gores Group took the company private in 2008.

portable

Atos will divide Unify into two parts. The managed services piece of the pie (40% in FY15) will move into Atos's now $6.3 billion managed services business. Atos has around 300 customers worldwide, two-thirds of which are also Unify customers. The Unify direct sales employees will merge into the Atos account-specific sales teams.

The Unify platforms, software, maintenance and installation elements (60%, or around $866 million) will fall under a newly established Unify Software and Platforms business unit, with its own CEO (undisclosed at the moment), and channel sales efforts. The marketing and finance functions will report into Atos but have matrixed responsibility to the Unify executive team. At least for now, Unify CEO Dean Douglas reports that the Unify branding will remain the same -- employees will not even require new business cards.

The product house will see "no change," reported Unify CTO Stefan Reid. His team will continue creating products for both the direct and indirect sales teams, following previously announced roadmaps, he said.

The Unify business has a clear remit from Atos, said Jon Pritchard, executive vice president of worldwide channels at Unify. That is: "Job 1 is to protect the business we have." Beyond that, the channel may have an opportunity to sell some of the cybersecurity products Atos gained in the 2014 acquisition of Bull, a French company that provided global cloud, cybersecurity, and big-data solutions.

Until now, consolidation of the enterprise communications market has taken two directions: scale consolidations like Mitel/Aastra, and private equity ownership such as in the case of Avaya/Nortel and Alcatel-Lucent Enterprise. Atos/Unify is a categorically different type of combination -- one that centers on enabling digital transformation rather than on specific products or services offerings. If successful, the market in five years could have far fewer product companies and far more systems integrators with solid expertise in communications and collaboration.

Follow Sheila McGee-Smith on Twitter and Google+!
@McGeeSmith
Sheila McGee-Smith on Google+





COMMENTS



August 16, 2017

Contact centers have long been at the leading edge of innovation in communications technology, given their promise of measurable ROI and the continual need to optimize customer interactions and sta

July 12, 2017

Enterprises have been migrating Unified Communications & Collaboration applications to datacenters - private clouds - for the past few years. With this move comes the opportunity to leverage da

May 31, 2017

In the days of old, people in suits used to meet at a boardroom table to update each other on their work. Including a remote colleague meant setting a conference phone on the table for in-person pa

August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.