Atos Origin waxes green and cloudy in innovation thrust

The economic downturn has had a transformative effect on the IT services sector. The mandate to cut cost from IT operations has stimulated demand, but the short supply of capital has prompted customers to seek engagements with low set up costs.

Meanwhile, the relative stability of the sector through the recession has made IT services suppliers attractive to investors, but also to acquirers (see, for example, Dell’s acquisition of Perot Systems).

In all, the market conditions in which IT services suppliers find themselves at the start of 2010 are very different from those that preceded the downturn.

Happily for customers, this means innovation is on the cards. From white label mobile ‘app stores’ (Infosys’ Flypp) to local, topic-focused technology hubs (IBM’s analytics centres), the IT services industry is clearly seeking new ways to do business.

In January 2010, French IT services company Atos Origin launched two new service lines. In truth, both are continuations of existing offerings but they each reflect an attempt to capitalise on shifting customer demand.

The first is Atos Sphere, a collection of cloud computing services (both public and private, with an associated consultancy offering) and various ‘functional services’, such as remote desktops and application testing, that Atos hopes to make available to smaller organisations by offering them at scale via the cloud.

Besides an increase in the use of virtualisation in its data centres, right now there is not much to distinguish Atos Origin’s new cloud computing services (processing, storage and network connectivity) from the existing utility services it has offered for five years, admits Guy Lidbetter, chief technology officer of Atos Origin’s managed operations.

Arguably more innovative are the ‘functional’ services. These comprise an SAP regression testing service, a data management tool for large scale data migrations, a product lifecycle management system and a virtual desktop environment – all based in the cloud and charged on a pay-as-you-go model.

In offering these services, Atos Origin is plugging the gap in cloud services between the bare bones, utility infrastructure services made popular by Amazon Web Services and the full-application services such as’s on-demand CRM tool. This, Lidbetter says, represents the untapped opportunity in cloud computing: “The ‘value add’ is higher up the application stack,” he says.

Embedding sustainability

The second ‘new’ offering is a range of consultancy services focussed on reducing the environmental impact of IT, and on the ability for IT – through such measures as logistics planning and smart metering – to reduce the carbon footprint of the business as a whole.

This coincides with “Ambition Carbon Free”, Atos’ commitment to reducing its own environmental impact: the company says it is the first in the IT sector to take part in the global reporting initiative (GRI), a voluntary measure of sustainability.

Again, Atos Origin already offers its customers consultancy around environmental sustainability in IT. And while this new drive represents a concerted effort to push these services to the market, few customers come to the company specifically seeking ‘Green IT’ services, according to Jeff Chater, Atos’ UK head of sustainability. Instead, he says, sustainability is becoming like security – a consideration in all IT projects. “It’s got to be embedded into everything else,” he says.

Gilding existing customer engagements with green-focussed consulting may provide an opportunity to reverse the declining fortunes of the company’s consultancy practice, which fell 16.7% to €488 million in the company’s third quarter of the financial year.

The cloud component of its new strategy, meanwhile, will help to bolster its managed services division. Having seen revenues grow 3% to €740 million in the same quarter this was the company’s star performer, but like all managed services suppliers Atos is at risk of disruption by the cloud computing providers.

Neither service is entirely new, and nor are they at the bleeding edge of innovation, but they do demonstrate an inclination to move with the times that were it absent could endanger Atos’ ability to recover from the downturn.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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