{"id":1077,"date":"2014-12-22T14:41:00","date_gmt":"2014-12-22T14:41:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/atos-xerox_122314\/"},"modified":"2014-12-22T14:41:00","modified_gmt":"2014-12-22T14:41:00","slug":"atos-xerox_122314","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/atos-xerox_122314\/","title":{"rendered":"Atos and Xerox exchange holiday gifts, but can they disrupt a market asleep at the wheel?"},"content":{"rendered":"

\"\"So it turned out that there was a \u201cSecret Santa\u201d exchange going over the last few months, as Atos and Xerox worked out the terms of their exchange of Xerox\u2019s IT Outsourcing business and an ongoing support contract for cash considerations of $1.05 Billion.<\/p>\n

Yes indeed folks, two traditional incumbent service providers are getting active in a market that’s been caught in somewhat of a holding pattern for some time, with many grimly clinging onto their labor-driven models<\/a> in denial that big changes are already in the works to disrupt<\/a> their cosy legacy worlds. So let’s hear what the HfS analyst team<\/a> thinks about it all…<\/p>\n

The <\/span>As-a-Service Economy<\/a><\/span> beckons… and it’s time for the contenders to step up and get focused<\/span><\/p>\n

HfS believes that this was a good move for both service providers as it allows for each to concentrate on their core offerings, while leaning on the other for ancillary capabilities (IT from Atos to Xerox, HR and F&A from Xerox to Atos). Both service providers have had a relationship for some time, especially with Xerox’s global BPO provision of services for Atos, and this will strengthen further now that there is no competitive overlap between their current offerings.<\/p>\n

For Atos, unwrapping the present of Xerox\u2019 ITO business greatly increases its presence in North America while raising the top line by $1.5 Billion + (not including $200M+ in contracts to serve Xerox). Traditional ITO is a scale game, and if it wants to take on the likes of CSC, Unisys, HP and IBM in North America more directly, this is way to gain a market and delivery presence with speed. We are confident that Atos will also be able to manage the integration of Xerox ITO (which was not especially integrated with Xerox BPO or Document Services to begin with) just as it has with several other recent ITO acquisitions, such as Bull and SIS.<\/p>\n

For Xerox, the immediate present is in the form of cash and a greater clarity in its mission. Xerox is not suddenly technology-free, as long-standing offerings (e.g. Tolls and Fare Management) as well as new acquisitions (e.g. WDS) have their own integrated capabilities. Xerox BPO is also a significant technology user in the form of robotic process automation and analytics platforms, which won\u2019t be impacted by this transaction either and they should continue to be integral to the capability strategy of Xerox. HfS also wants to see how Xerox will need to maintain and develop IT capabilities to further Business Platform As A Service (BPaaS) offerings but these will rest on a lightweight cloud infrastructure along with process redesign, SaaS-enablement, mobile enablement and analytics enablement that go beyond what is being offered by traditional ITO services.<\/p>\n

So… what can we expect from both providers in 2015?\u00a0<\/span><\/p>\n

For Atos, the immediate goal is clear \u00a0– to launch itself much more aggressively onto the US market, integrate the Xerox ITO business, increase brand awareness among US buyers and prove to the world it must be considered a leading global ITO service provider.<\/p>\n

The billion-dollar question now is what Xerox may do with their cash in the post-holiday season. \u00a0It’s been a while since its 2009 acquisition of ACS<\/a>, and, to be frank, it hasn’t exactly set the BPO industry alight outside of its document management business. \u00a0Now it has added funds and impetus to make a fresh play at the market in 2015.<\/p>\n

Will the firm use it to pursue additional BPO capabilities in target markets such as healthcare by swallowing up the likes of an EXL, or will it pool the holiday cash with other savings and make a run at even larger targets, such as HP or IBM\u2019s BPO units or really<\/em> go for it by targeting Genpact? It\u2019s also entirely possible that Xerox will play it more conservatively and invests in third parties with advanced technology such as HealthSpot or Emdeon, or goes after more businesses to digitize their business process operations, like WDS, which is actively disrupting the customer care market. Then it can keep the change to jingle for shareholder benefit as well.<\/p>\n

The Bottom-line: Atos and Xerox are getting active, while several of their competitors are stuck in holding patterns<\/span><\/p>\n

To summarize, this transaction focuses both service providers on their strengths and will help them be more effective in the emerging As-a-Service Economy<\/a>. However, both have a lot of work to do – and fast – if they want to get ahead of the curve in today’s fast-evolving services market. \u00a0Unlike several of their illustrious competitors, which have opted to stagnate and eek out whatever they can from their legacy businesses, at least Atos and Xerox and making aggressive moves in the right direction.<\/p>\n","protected":false},"excerpt":{"rendered":"

So it turned out that there was a \u201cSecret Santa\u201d exchange going over the last few months, as Atos and…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,51,55,57,78,81,90,91,98],"tags":[303],"ppma_author":[19],"yoast_head":"\nAtos and Xerox exchange holiday gifts, but can they disrupt a market asleep at the wheel? - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/atos-xerox_122314\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Atos and Xerox exchange holiday gifts, but can they disrupt a market asleep at the wheel? - Horses for Sources | No Boundaries\" \/>\n<meta property=\"og:description\" content=\"So it turned out that there was a \u201cSecret Santa\u201d exchange going over the last few months, as Atos and...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.horsesforsources.com\/atos-xerox_122314\/\" \/>\n<meta property=\"og:site_name\" content=\"Horses for Sources | No Boundaries\" \/>\n<meta property=\"article:published_time\" content=\"2014-12-22T14:41:00+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2014\/12\/xerox-bow.jpg\" \/>\n<meta name=\"author\" content=\"Phil Fersht\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@pfersht\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Phil Fersht\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.horsesforsources.com\/atos-xerox_122314\/\",\"url\":\"https:\/\/www.horsesforsources.com\/atos-xerox_122314\/\",\"name\":\"Atos and Xerox exchange holiday gifts, but can they disrupt a market asleep at the wheel? 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