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NEAT EVALUATION FOR ATOS:SAP Cloud Migration ServicesMarket Segment: OverallIntroductionThis is a custom report for Atos presenting the findings of the NelsonHall NEAT vendorevaluation for SAP Cloud Migration Services in the Overall market segment. It contains theNEAT graph of vendor performance, a summary vendor analysis of Atos for SAP cloudmigration services, and the latest market analysis summary.This NelsonHall Vendor Evaluation & Assessment Tool (NEAT) analyzes the performance ofvendors offering SAP cloud migration services. The NEAT tool allows strategic sourcingmanagers to assess the capability of vendors across a range of criteria and business situationsand identify the best performing vendors overall, and with specific capability in legacymigration and in S/4HANA transformation.Evaluating vendors on both their ‘ability to deliver immediate benefit’ and their ‘ability to meetclient future requirements’, vendors are identified in one of four categories: Leaders, HighAchievers, Innovators, and Major Players.Vendors evaluated for this NEAT are: Atos, Capgemini, Cognizant, DXC Technology, EPAMSystems, Infosys, LTI, Mindtree, Mphasis, NTT DATA, TCS, Tech Mahindra, T-Systems, Wipro,and Yash Technologies.Further explanation of the NEAT methodology is included at the end of the report. NelsonHall 2020March 2021Licensed for distribution1 NelsonHall 2021Licensed for distributionMarch 20201
NEAT Evaluation for Atos: SAP Cloud Migration ServicesNEAT Evaluation: SAP Cloud Migration Services (Overall)NelsonHall has identified Atos as a Leader in the Overall market segment, as shown in the NEATgraph. This market segment reflects Atos’ overall ability to meet future client requirements aswell as delivering immediate benefits to its SAP cloud migration services clients.Leaders are vendors that exhibit both a high capability relative to their peers to deliverimmediate benefit and a high capability relative to their peers to meet future clientrequirements.Buy-side organizations can access the SAP Cloud Migration Services NEAT tool (Overall) here.March 2021Licensed for distribution NelsonHall 20212
NEAT Evaluation for Atos: SAP Cloud Migration ServicesVendor Analysis Summary for AtosOverviewWith Elie Girard as CEO, Atos has started on a business transformation with its ‘SPRING’initiative reshaping its portfolio of offerings, reinforcing its go-to-market approach, andsetting-up a vertical-led organization. In a major reorganization, it has created six Industrygroups (with areas of focus in the portfolio): Manufacturing (IoT, connected cars, analytics, product servitization strategies) Financial Services & Insurance (UX, compliance and reporting, open platforms, operatingmodels transformation, and process digitization) Public Sector & Defense (rationalization of infrastructures, national security, andsovereignty, e-government) Telecoms, Media & Technology (back-office innovation, UX, next-gen networks, costoptimization) Resources & Services, the former Retail, Transportation & Logistics (UX, cost optimization,sourcing, payments and asset management) and Energy & Utilities (renewables, UX,distribution and circular economy, smart services) market groups Healthcare & Life Sciences (demographics and patient behavior analytics, funding gap,computer-assisted diagnostics, telehealth, genomic innovation).At the same time, Atos has evolved from its former primary Global Business Unit structure intofive Regional Business Units (RBUs), each of them under a single leadership: North America Central Europe (former Germany and Central & Eastern Europe, excluding Italy) Northern Europe (former U.K. & Ireland, and Benelux & The Nordics) Southern Europe (former France, Iberia, and Italy) Growing Markets (former Asia-Pacific, South America, and Middle East & Africa).In November 2020, Atos introduced OneCloud to help its clients adopt cloud computing.Services offered under OneCloud include: Industry-specific consulting services to develop cloud solutions Cloud orchestration across private and public clouds, with a focus on interoperability Cloud standardization and automation services, including a reference architecture Development and deployment of a private and sovereign cloud in datacenters Cloud application development, modernization, and re-platforming, including DevSecOps AI and ML to improve processes and modernize data Bare metal solutions, with high processing and memory servers, to support applicationsthat cannot be virtualized Cloud edge and far edge, combining local servers and 5G connectivityMarch 2021Licensed for distribution NelsonHall 20213
NEAT Evaluation for Atos: SAP Cloud Migration Services Cybersecurity Decarbonization, with a one-year carbon footprint reduction guarantee.For its cloud services, Atos relies on the technologies from AWS, Dell (including Dell EMC andVMware), Google Cloud, IBM Red Hat, Microsoft Azure, SAP, ServiceNow, and Salesforce. Thecompany will invest 2bn in certification and training, R&D, and acquisitions over five years tosupport OneCloud.In June 2020, Atos, through Atos Worldgrid, acquired Alia Consulting, a French SAP S/4HANAconsultancy based in Paris, targeting utilities for their CRM and billing needs. Alia had revenuesof 9m in 2019 and a headcount of 70.In February 2020, Atos acquired Maven Wave, a Chicago-headquartered Google Cloud PremierPartner (and N. America Services Partner of the year in 2018 and 2019). Maven Wave hasGoogle Cloud Partner Specializations in data analytics, ML, cloud migration, applicationdevelopment, infrastructure, location-based services, enterprise collaboration, and marketinganalytics, and has 330 employees.Atos had acquired X-PERION in Germany in October 2019. X-PERION had a similar profile tothat of Alia Consulting, with a headcount of 50. It was combined in ENERGY4U, a unit ofWorldgrid.To expand its application services and North American presence, in July 2018, Atos announcedthe acquisition of Syntel. The acquisition closed in October 2018. The acquisition brings totalAtos headcount to 120k and nearly doubles its India-based headcount to 32k. It also makesthe B&PS division into Atos' largest, accounting for 47% of total revenues.FinancialsIn CY 2019, Atos reported overall revenues of 11.6bn ( 13.3bn). Of this, NelsonHallestimates that 100m ( 115m) was associated with SAP ERP cloud migration services.Strengths Broad set of end-to-end assets and offerings Priority placed on GCP and Azure partnerships Large focus internally on cloud offerings and capabilities as well as SAP Significant presence in industries such as manufacturing, where SAP is a priority.Challenges Expansion of industry consulting experts still in progress Heavily weighted toward EMEA markets Client base weighted toward infrastructure-led relationships.March 2021Licensed for distribution NelsonHall 20214
NEAT Evaluation for Atos: SAP Cloud Migration ServicesStrategic DirectionAtos has defined a strategy to grow its SAP cloud migration practice by investing in itscapabilities across the following areas: Industry business solutions built on S/4HANA and cloud Becoming the partner of choice in target industries Expanding presence in Americas and APAC Expanding certified employee base Building field specialists to drive demand.OutlookSAP ERP cloud migration services sit at the nexus of key focus areas for Atos. It has prioritizedits hybrid cloud capabilities over the last several years and its SAP capabilities, and its recentorganizational pivot to vertical-led strategy aligns with the increasing need for SAP to align withindustry-specific requirements. This has resulted in Atos having a strong, broad portfolio ofassets to support clients in their SAP cloud journey. It recognizes and invests in building out aworkforce that can play a consultative role to work with clients in the early phases ofengagements and shape the cloud roadmap and strategy. Expanding this team further will bea key enabler of the growth being targeted, particularly in North America, APAC, and LatinAmerica, where Atos has less of a legacy footprint.Beyond its focus on industry-led solutions, Atos is placing primacy on tailoring cloud migrationto business objectives rather than solely IT cost reduction. This approach aligns it closely withthe expanded business cases that clients are pursuing. However, Atos is challenged by ahistorical client footprint dominated by infrastructure-led relationships. Leveraging its growingfield consulting staff to tap into new buyer bases within clients and evolve the perception ofAtos capabilities is critical.March 2021Licensed for distribution NelsonHall 20215
NEAT Evaluation for Atos: SAP Cloud Migration ServicesSAP Cloud Migration Services Market SummaryOverviewHistorically, the most common path used to migrate SAP ERP to the cloud has been migrationof legacy ERP landscapes with minimal transformation. At most, transformation was themigration of the database to HANA or the OS. Over the last two years, with the increasingadoption of S/4HANA, it is taking on an increasing proportion of SAP cloud adoptions, whetherthrough migration of a legacy environment or through a new implementation on the cloud.However, NelsonHall estimates it still represents less than 40% of SAP ERP cloud migrationscompleted by vendors to date.Clients that have undertaken the migration or adoption of SAP ERP landscapes in cloudenvironments have most commonly realized value through the reduction of IT and ERP costs.The shift from on-premise infrastructure to a cloud landscape with the ability to scale up anddown to meet demand and eliminate ongoing operations and maintenance allows clients torealize IT cost savings of 20-30% on average.Vendors are expanding their portfolio of cloud adoption offerings to ensure their portfolio hasthe breadth to meet client needs. A technical lift and shift of a legacy SAP ERP environmenthas been the starting point for ERP cloud adoption offerings, but now leading vendors areoffering bundled offerings that provide an industrialized migration to a new landscape preconfigured to address specific industry or functional requirements.To deliver these services, IT service vendors are investing heavily in their SAP ERP cloudmigration capabilities. These investments are frequently focused in four main areas: Transforming the skillsets of their teams Evolving cloud-focused offerings Evolving and maturing assets and tools Expanding portfolio of industry-focused offerings.Buy-Side DynamicsThe key capabilities sought by organizations in selecting a vendor to deliver SAP cloudmigration services are: Experience delivering equivalent services in geography/industry Remote SAP ERP cloud migration capabilities Flexibility in commercial arrangements Demonstrated business case value achievement Automated migration tools.March 2021Licensed for distribution NelsonHall 20216
NEAT Evaluation for Atos: SAP Cloud Migration ServicesMarket Size & GrowthThe market for SAP ERP cloud migration services is poised to grow 16.6% CAAGR to reach 19.4bn by 2025.After a spending slowdown in 2020 revenues as the COVID-19 pandemic delays SAPtransformation investments, clients will return to a focus on SAP ERP cloud migration servicesin 2021 as it is seen as a path to both drive cost reduction and position the firm for furtherdigital transformation. In parallel, as the 2027 end of support deadline comes closer, S/4HANAadoption will see faster growth to take on a larger proportion of the market.Success FactorsThe key success factors for SAP ERP cloud migration services vendors include: Automated migration assets: Successful vendors have assets that automate activitieswithin the migration effort to simplify and accelerate service delivery. Primary focus areasinclude landscape assessment, data migration, cloud provisioning and code remediation Tailored offerings: Successful vendors have developed a set of offerings tailored to clients’specific sector or functional requirements to increase the value of migration. These includeindustry functional extensions and bundled offerings tailored to provide all necessarycapabilities for a target industry Flexible delivery framework: As clients are taking a diverse set of paths to move ERPlandscapes to cloud environments, vendors need to have methodologies, tools andapproaches that are adaptable to whatever path is taken by the client Broad partner ecosystem: Vendors are supplementing core partnerships with SAP and allkey hyperscalers (AWS, Azure and GCP) with other more targeted hyperscalers (ex. Alibabafor China and APAC) and migration tool vendors such as SNP Group Business, process and OCM consulting: In parallel with migrating at least some portion oftheir ERP landscape to a cloud environment, clients are frequently looking to also add newcapabilities or transform their processes. To realize the value of these changes, clientsneed to transform not just the technology landscape but also processes and organization.Vendors must be positioned and capable of supporting these broader transformationobjectives.OutlookMany clients have invested in and evolved their legacy ERP landscapes over many years tocustomize to their specific requirements. This customization and the large amount of data insystems significantly increases the complexity of migration. This complexity increases theeffort and risk to migrate either to a cloud landscape or in transforming it to S/4HANA inparallel with a cloud migration.After the onset of the pandemic and the attendant economic uncertainty, clients areincreasingly focusing on rapid value realization rather than solely on longer, broadertransformational objectives. In defining a migration roadmap, vendors need to ensure that theclient is realizing interim value throughout each phase of the migration to maintain buy-inacross the organization.March 2021Licensed for distribution NelsonHall 20217
NEAT Evaluation for Atos: SAP Cloud Migration ServicesThe future direction of the market will include the following: Transforming from legacy SAP ERP to S/4HANA becomes the majority cloud migrationapproach Cloud migration approaches primarily bifurcate into two models: Adopting pre-configured all-in-one, tailored S/4HANA landscapesDe-coupling incremental capabilities to be hosted in public cloud with slimmed downdigital core, on-premise or in private cloud Hyperscaler becomes first choice cloud destination for transformed landscapes Objectives will be focused on implementing new capabilities such as IoT, AI/ML andanalytics to improve business operations Greater adaptability of ERP landscape enables companies to pursue new business modelsas opportunities arise End-to-end migration and operations packaged as a single-cost engagement Fully automated discovery and assessment develops a detailed understanding of objectsrequiring transformation for cloud and S/4HANA, and then is able to automatically executeremediation and migration of objects Target landscape is pre-configured to industry-specific requirements and supplementedby additional functional extensions and new capabilities that expand value of system De-coupled legacy system is extended with cloud-based functionality, but acts as the firstphase of the ultimate journey to S/4HANA in the cloud.March 2021Licensed for distribution NelsonHall 20218
NEAT Evaluation for Atos: SAP Cloud Migration ServicesNEAT Methodology for SAP Cloud Migration ServicesNelsonHall’s (vendor) Evaluation & Assessment Tool (NEAT) is a method by which strategicsourcing managers can evaluate outsourcing vendors and is part of NelsonHall's Speed-toSource initiative. The NEAT tool sits at the front-end of the vendor screening process andconsists of a two-axis model: assessing vendors against their ‘ability to deliver immediatebenefit’ to buy-side organizations and their ‘ability to meet client future requirements’. Thelatter axis is a pragmatic assessment of the vendor's ability to take clients on an innovationjourney over the lifetime of their next contract.The ‘ability to deliver immediate benefit’ assessment is based on the criteria shown in Exhibit1, typically reflecting the current maturity of the vendor’s offerings, delivery capability,benefits achievement on behalf of clients, and customer presence.The ‘ability to meet client future requirements’ assessment is based on the criteria shown inExhibit 2, and provides a measure of the extent to which the supplier is well-positioned tosupport the customer journey over the life of a contract. This includes criteria such as the levelof partnership established with clients, the mechanisms in place to drive innovation, the levelof investment in the service, and the financial stability of the vendor.The vendors covered in NelsonHall NEAT projects are typically the leaders in their fields.However, within this context, the categorization of vendors within NelsonHall NEAT projects isas follows: Leaders: vendors that exhibit both a high capability relative to their peers to deliverimmediate benefit and a high capability relative to their peers to meet future clientrequirements High Achievers: vendors that exhibit a high capability relative to their peers to deliverimmediate benefit but have scope to enhance their ability to meet future clientrequirements Innovators: vendors that exhibit a high capability relative to their peers to meet futureclient requirements but have scope to enhance their ability to deliver immediate benefit Major Players: other significant vendors for this service type.The scoring of the vendors is based on a combination of analyst assessment, principally aroundmeasurements of the ability to deliver immediate benefit; and feedback from interviewing ofvendor clients, principally in support of measurements of levels of partnership and ability tomeet future client requirements.Note that, to ensure maximum value to buy-side users (typically strategic sourcing managers),vendor participation in NelsonHall NEAT evaluations is free of charge and all key vendors areinvited to participate at the outset of the project.March 2021Licensed for distribution NelsonHall 20219
NEAT Evaluation for Atos: SAP Cloud Migration ServicesExhibit 1‘Ability to deliver immediate benefit’: Assessment criteriaAssessment CategoryAssessment CriteriaOfferingOverall SAP ERP Cloud Migration CapabilityCloud Migration Strategy Development and PlanningCloud Data Migration ServicesLegacy ERP Cloud Migration ServicesProprietary Functional ExtensionsBundled Cloud Migration OfferingsERP Cloud AMSS/4HANA Cloud Migration ServicesDeliveryClient-Proximate consulting capabilitiesRemote Cloud Migration DeliveryMigration Delivery CapabilityAutomation in Assessment and PlanningAutomation in Legacy Cloud MigrationAutomation in S/4HANA TransformationIndustry TemplatesPresenceScale of Ops - OverallScale of Ops - Legacy ERP migration to cloudScale of Ops - S4HANA Transformation on CloudScale of Ops – N. AmericaScale of Ops - EMEAScale of Ops - APACValue DeliveredValue for MoneyTimeliness of ImplementationAccess to range of technical expertiseCorrelation of vendor fees to objectivesCost Savings AchievedReduction in InfrastructureMarch 2021Licensed for distribution NelsonHall 202110
NEAT Evaluation for Atos: SAP Cloud Migration ServicesExhibit 2‘Ability to meet client future requirements’: Assessment criteriaAssessment CategoryAssessment CriteriaOverall Future Commitmentto SAP Cloud MigrationCommitment to SAP Cloud Migration ConsultingCommitment to Legacy ERP Cloud MigrationCommitment to S/4HANA Cloud MigrationCommitment to Service InnovationInvestments in SAP CloudMigration CapabilitiesInvestment in cloud migration consultingInvestment in scaling SAP cloud migration capabilitiesInvestment in targeted capabilities (geographic or industryfocused)Investment in automation and toolsAbility to Partner and EvolveServicesKey partner (suitability of vendor to meet needs)Ability to evolve servicesFor
NEAT Evaluation: SAP Cloud Migration Services (Overall) NelsonHall has identified Atos as a Leader in the Overall market segment, as shown in the NEAT graph. This market segment reflects Atos [ overall ability to meet future client requirements as well as delivering immedi
