Data is exploding, and vendors are preparing to accommodate this trend by effectively managing, storing, securing and analyzing data and by driving business results through next-generation solutions. During Atos’ Technology Days, held May 16-17 in Paris, Atos CEO Thierry Breton stated that while 80% of data is currently stored in data centers and in the cloud, that percentage is forecast to shrink to 20% by 2025 as clients seek ways to analyze data in real time at the edge, where it is created. Pioneering emerging technology development, such as IoT, edge computing and quantum computing, enables vendors to expand their addressable market and cross-sell and upsell their services offerings.
While traditional IT services remain key revenue contributors for many of the 29 IT services vendors that TBR covers in its IT Services Vendor Benchmark, portfolio innovations create new areas of growth. Gaining a first-mover advantage in emerging segments enables vendors to attract clients with practical use cases for new technologies across industries.
Technology partnerships and acquisitions enable vendors to expand IoT portfolios and capture new areas of growth during 2019
While IoT solutions will often span several services, they are usually confined to one vertical, guiding vendors’ IoT-led partnerships and portfolio development. IoT intrinsically cuts across both vendor and customer categories, transforming and connecting business operations. Vendors expand their portfolios to guide customers on how to implement and manage IoT solutions. However, some vendors lack portfolio depth around critical IoT capabilities, such as operational technology (OT), and predictive analytics and data management, that allow customers to proactively manage equipment and reduce costs associated with downtime. To fill these portfolio gaps, we expect vendors to forge relationships and make acquisitions that support development of vertical-oriented IoT solutions.
Examples of Vendors’ Recent Activities
Fujitsu partnered with Coast Research Engineering Co. to develop an IoT solution for aquaculture and marine clients. The solution will monitor water quality and temperature from aquamarine tanks to support aquaculture. Fujitsu RunMyProcess partnered with IoT.nxt to improve data collection and analytics within Fujitsu’s high-productivity application PaaS (hpaPaaS) and to automate operational processes. The partnership will improve Fujitsu’s ability to collect and analyze data from various devices and sensors by standardizing and filtering data.
Wipro announced the opening of its third Industrial IoT (IIoT) center of excellence in March in Kochi, India. Wipro is using the centers, which are also located in California and Bangalore, India, to develop proofs of concept and market-ready solutions for IIoT customers. Further, Wipro has been leveraging the centers to attract local talent from universities through various initiatives such as hackathons.
The acquisition of Altran announced on June 24 expands Capgemini’s engineering and R&D services capabilities and complements the company’s established consulting and IT capabilities. Capgemini is positioning as an “intelligent industry” vendor that can provide solutions around Engineering 4.0 and Industry 4.0. and expand in smart technology-driven segments such as IoT, AI, 5G, cloud, edge, data and cybersecurity. The key for this transaction is that while Capgemini has well-established IT expertise as well as digital transformation and design and innovation consulting capabilities in Capgemini Invent, the company gains Altran’s OT capabilities, a competence that was not developed for Capgemini but is a key component in IoT models. TBR notes that Capgemini is catching up with some of its peers in IoT. For example, Capgemini’s direct competitor Atos already has a history in OT as a result of its acquisition of Siemens’ IT Solutions and Services business and its global strategic alliance with Siemens AG has given it a head start in IoT; Atos has increased its investment in current joint efforts with Siemens in IoT. In February Capgemini partnered with Idemia, a provider of AR solutions, to develop an IoT device management platform that strengthens security and connectivity of devices and data. The platform will be based on Capgemini’s IoT device management platform, X-IoT, which securely connects and manages gateways and protocols to the cloud, and on Idemia’s M-Trust solution.
Vendors are competing to gain a first-mover advantage in the early commercial stages of quantum computing to diversify revenues
Quantum technologies remain in the nascent stage, with vendors increasing R&D practices to develop technologies such as computing. IBM has the technology expertise to accelerate commercial use of quantum computing as its investments date back to 2016. However, competitors such as Atos and Accenture are picking up speed. A key inhibitor to quantum computing adoption will be the impracticality of having the hardware on premises due to the very specific environmental conditions needed to function properly, creating opportunities for vendors to help customers take advantage of quantum computing without negatively impacting hardware sales.
Examples of Vendors’ Recent Activities
IBM released an integrated quantum computing system for scientific and commercial use. IBM Q System One tackles complex problems that are challenging for classical systems to handle while enabling quantum computers to operate beyond research labs. In 2019 IBM is opening its first IBM Q Quantum Computation Center for commercial clients in Poughkeepsie, N.Y., expanding the IBM Q Network commercial quantum computing program, which already includes systems at the Thomas J. Watson Research Center in Yorktown, N.Y. The center will enable IBM to work with a community of enterprises, startups, academic institutions and research labs to advance quantum computing and explore practical applications for business and science.
Accenture Labs, three of which contain dedicated quantum computing R&D practices, engage in projects that have customer sponsors to solve real-world business or economic problems. Accenture maintains nine quantum computing offerings and has identified 150 use cases across its Operating Groups, the most prominent being pharmaceutical vendor Biogen.
Atos also continues to enhance its quantum computing capabilities. As TBR wrote in its May 2019 Digital Transformation Insights Report: Emerging Technology, which focused on quantum, “Atos took its strengths in design computing for appliances and programming and emulation environments and announced several quantum research initiatives, including the opening of a global R&D lab in Yvelines, France, and Atos QLM [Quantum Learning Machine] implementations in Europe and the U.S. to enable clients to experiment with disruptive technologies, tackle the explosion of data and accelerate the number of practical use cases across industries. Additionally, about a year ago, Atos developed a consulting practice around quantum computing to educate and advise clients on whether it is possible to use quantum to accelerate business applications. During Atos Technology Days 2019, Atos announced myQLM, a light version of a QLM, which is an on-premises environment designed for quantum software developers. Users can download myQLM on their desktops and use a set of algorithms to train at home or at a university and simulate the actual QLM. A Phyton-based language, QLM allows students and researchers to develop and share code within the community, creating additional entry points for Atos’ broader services portfolio. With customers ranging from universities and research centers to high-performing computer ecosystems and commercial clients, Atos … is building one use case at a time. For France-based oil and gas company Total, Atos is using a QLM simulator to accelerate the analysis of seismic activities, helping Total stay ahead of competitors. Atos is also working with Bayer and RWTH Aachen University in Germany to evaluate the use of quantum computing to research and analyze human disease patterns.”