Unisys has been serving the IT industry for a very long time; the current Unisys Corporation formed with the merger of Sperry and Burroughs in 1986, providing the hardware business, consulting, support and maintenance services for customers. The commoditization of IT hardware and the emergence of software and services as the growth drivers for the IT industry necessitated many firms, including Unisys, adapt and transform.
The future strategy for Unisys is to enhance, extend and expand its business, after the restructuring and elimination of staff and the contraction of revenues with the shunning of unprofitable or low-margin offerings. The company’s new organizational model focuses on becoming a global industry organization, with globally integrated, client-centric teams. Unisys is targeting the public sector and is narrowing, but not exclusively focusing on, financial services, pharma/life sciences and transportation in the commercial sector.
The Stealth, Predictive Analytics, and Extended Service Integration and Management (ESIAM) platforms coupled with Unisys’ historical success in end-user workplace management — which is evolving into a digital workplace model — underpin the company’s turnaround in revenue growth and evolution from a Tier 2 to a Tier 1 IT services vendor.
Unisys’ Americas Analyst and Advisor Summit outlined the company’s strategy and tactics for making a comeback in the IT services arena, predicated on successful execution to deliver long-term success. Leadership at Unisys took the stage to outline strategies for service lines and industry verticals, all working toward the same goal with the same playbook. Ultimately Unisys combines services and technology globally to deliver transformational IT solutions to current and prospective clients.
Peter Altabef, Unisys’ president and CEO, opened the event by saying, “Unisys is liked by clients.” The challenge is to expand the number of offerings and solutions to continue to satisfy existing relationships while bringing new clients on board. Unisys is integrating its horizontal service lines with technology products to form vertical industry solutions. The end result is an organization with a client-centric focus, successfully implementing transformative solutions, utilizing domain-based IP and software, and delivering services with talented people.
Following Altabef, a number of Unisys vice presidents and directors provided updates and outlooks on the company’s businesses and global strategy by services and verticals:
Unisys will focus on key strategic growth areas around Government and Commercial and will be vigilant to not “spread itself too thin” with deals outside its “strike zone.”
The convergence of managed services and consulting services, aided by the addition of subject matter experts (SMEs) enables Unisys to have discussions that go beyond technology to business.
Unisys recognizes eight key disruptive technology trends that clients need to address to drive new product and services growth: intelligent automation; personas and context; social computing; mobility and wearable; Internet of Things (IoT); big data analytics; cybersecurity; cloud and hybrid IT, which will help drive new product and services growth.
A significant portion of Unisys’ portfolio is on the far right of the maturity curve, indicating innovation investments and talent recruitment are needed to remain competitive in the IT industry. CTO Tarek El- Sadany wants every engineer working on innovation to drive IP, as he sees Unisys as a “solutions company with a technology edge.” El-Sadany said, “we are the most ‘un-famous’ software company in the world.”
This will necessitate a portion of future investments to be directed toward relaying Unisys’ capabilities in a simple and digestible message.
Unisys offers a full suite of security offerings, including consulting, advanced logical and physical security products and managed security services. During the event, Unisys released a new software-based version of Unisys Stealth that provides microsegmentation and is available in three forms, Stealth (Core) for on- premises, Stealth (Cloud) and Stealth (Mobile).
Nearly 28% of Unisys’ revenue is derived from Application Services; Unisys has been doing SaaS before it was known as such. Maintaining legacy environments and exploiting its ability to turn SI work into application-managed services sustains revenues while Unisys invests in high-growth areas.
Predictive analytics, rather than traditional reporting, is the wave of the future, which Unisys is addressing with an internally developed analytics platform, and ongoing hiring of data scientists and industry SMEs ultimately offering advanced Data Analytics as a Service.
Recognizing the future of IT infrastructure will be hybrid environments, Unisys addresses the challenges of cloud sprawl by focusing on the software-defined enterprise (SDE) through ESIAM. The software-defined (SD) data center management stack includes SD security (Stealth) and SD management (Edge).
Workplace management, providing maintenance and support services across a number of platforms and products, has been a core revenue driver for Unisys. Unisys is evolving a new digital service model including a digital service management framework, enabling customers to transform legacy processes to digital-based services.
Impact and opportunities
Unisys’ unified message of focused vertical services and horizontal technologies brings new life to this mature but transforming IT services company
A consistent message of a newly focused and reinvigorated Unisys was weaved throughout each of the presentations and breakout sessions. We believe Unisys is saying all the right things and has a sound plan to become a Tier 1 IT services provider. Next will be turning the “talk” not only into actionable items, but also into expanding profitable revenue streams to drive growth. Transformation is nothing new across the IT industry; both IBM and HP have been transforming for well over a year and have reported corporate-level revenue declines for
just as long. We do not expect this to be a quick road to recovery; however, a focused and streamlined Unisys has emerged. Areas such as analytics will drive new revenue streams as Unisys incorporates new products and services into industries of strength such as financial services, transportation and public sector. Unisys will continue to hire SMEs, data scientists and consultants to deliver transformative business solutions, not just “your mess for less” services, as Altabef phrased it during his closing remarks.
Monetizing its Stealth and Predictive Analytics platforms will be critical as Unisys rebuilds itself. Investments will be needed to turn IP within the organization into revenue-generating solutions. Prioritization of investment dollars and careful monitoring of expenses will be strong indicators of how quickly Unisys will be able to challenge Tier 1 IT services vendors.
TBR will examine Unisys’ progress with its ongoing transformation efforts during Unisys’ October earnings call. An initial response to the company’s earnings will be published by TBR on the day after the call, followed by a full report within 15 business days.
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