For France-based Atos, significant change is imminent. In mid-June, the IT services provider announced plans to split into two companies:  SpinCo will offer high growth solutions that support digital transformation, big data (includes Atos’ computing portfolio), and cybersecurity; and TFCo (Atos’ Tech Foundations) will provide low growth managed infrastructure services, digital workplace solutions, and professional services.

By restructuring, the company is separating its higher growth and higher margin businesses from its underperforming divisions, which have been dragging the company’s overall financial performance down for several years.

Although Atos’ reorganization strategy appears to be set, with Atos’ CEO announcing plans to resign in September and appointing two deputy CEOs to run the new companies, there may be more changes to come. 

Atos uncertainty remains

For several months, rumors have been flying that the company’s big data and cybersecurity businesses may be sold to Thales, a French defense company. There could be other potential bidders as well, however, given Atos’s strong cybersecurity portfolio and relationship with the French government, suitors will most likely need to be French organizations.

There is still much uncertainty regarding what will happen to France-based Atos in the long term, but one thing is clear:  it will not continue to operate within its current structure. And that’s a good thing. The company has been unable to turn around its performance, even with numerous acquisitions, and has struggled to implement its multi-part Transformation Plans successfully. Atos has considerable strengths, including its cybersecurity portfolio, computing business, and the digital expertise gained from its purchase of Syntel; it now needs to put in place a framework and strategy that better leverages these assets.

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By GlobalData