Hello, everyone. Thank you for being here with us today. I am delighted to discuss with you some exciting new developments on Atos Cloud, and share with you our vision during today's special event. You will notice that it is not a usual analyst call. Today's event is primarily dedicated to our customers and partners, but we thought with Uwe and Gilles that it would be a good opportunity to have another type of interaction with you as sell-side analysts. So here we are. After my introduction, we will answer to your questions together with Uwe, but also Jean-Philippe Poirault, our Cloud Executive Sponsor for the group. So let's get started. More than ever before, organizations are faced with major challenges and must develop increasingly virtual customer interactions, maintain strong links between virtual teams, understand technology evolution, answer technology independence imperatives, and shrink their carbon footprint.
And when we survey our customers, what do they expect from this new era of digitalization? They want more flexibility, agility, reduced time to market. They want reliability, especially on their business-critical applications. Of course, they want all this while improving their competitiveness, including on their costs. And they want safety, meaning security, technology independence, sovereignty, but also now definitely decarbonization, because they all have strong carbon footprint reduction targets, and they just need concrete help to achieve them. These are our customers' goals. Those were already trending up before COVID, but obviously, many of them have been accelerating with COVID-19 crisis. Of course, those needs take different shapes and forms, depending in which industry our customers evolve. Cloud is the enabler of this new era of digitalization, where the full stack of infrastructure, data, and applications, as well as security, meet and merge.
Atos understands the impact of this paradigm shift, and is today uniquely positioned to deliver to our customers the full value of cloud. Atos has invested in various capabilities that are now combined in a unique cloud-forward initiative designed to help our customers unleash the business potential of cloud, proactively accelerating and facilitating migration to the cloud through a one-stop shop offering, industry-specific go-to market, and a dedicated organization. Here is Atos OneCloud. First and foremost, Atos OneCloud aims at bringing to customers business outcomes adapted to their industry, answering their market challenges, and fitting their cloud journey maturity, which can be either foundational, opportunistic, strategic, or transformational. Also, Atos OneCloud is designed as a modular approach, allowing customers to move their entire landscape to the cloud or business building block by business building block.
To deliver such business benefits to customers, Atos OneCloud combines a unique set of ten offerings in a powerful one-stop shop. The strength of Atos OneCloud is based on Atos' ability to orchestrate any combination of those individual offerings and to instantiate them by industry. Further to the launch, beginning of 2020, of SPRING, our industry-led portfolio, go-to market, and organization. Let me take you now through these ten offerings. First of all, our industry-specific consultancy services to develop cloud business solutions at scale. As you know, for a year now, Atos is organized by industries, no more by businesses. That means we are organized according to our customers' businesses with the best people knowledgeable of our customers' challenges, hence this ability to design the right cloud approach to our customer's business.
Second, Atos multi-cloud orchestration across private and public, and across all major public cloud providers, maximizes application migration and portability, lowers operational costs, and ensures cloud interoperability. This is what we do at Siemens across private cloud and large public cloud partners, AWS, Google Cloud, and Azure. Another example is Transnet, where we develop a digital platform that brings 10,000 renewable power sources into a dynamic grid control to shape the future with renewable energies based on agile development, Red Hat OpenShift, microservices, and public cloud, both AWS and Azure. I am delighted to show you now how our three hyperscaler partners, Amazon Web Services, Microsoft Azure, public cloud, Google Cloud, as well as IBM Red Hat, actively support the Atos OneCloud initiative and are ready to deliver the market-leading cloud technology and business solutions.
By bringing together the world's leading cloud providers, Atos is a clear major player in this field, as it can design and integrate a cloud business platform capable of delivering any business challenge. Matt, Jean-Philippe, Thomas, Arvind, and Paul, please, the floor is yours.
Hi, Elie, and hi, everyone. Great to join you for the launch of Atos OneCloud. At AWS, we're very happy to be part of this new cloud program at Atos. We have a strong history of working together in many large customer engagements worldwide, combining Atos's transformative cloud capabilities with the power of AWS. There are many exciting initiatives on the horizon, including tremendous opportunity for us to closely collaborate with Atos to innovate, migrate, and modernize legacy IT environments, which will unlock huge potential for our joint customers.
On behalf of the whole team at AWS, we're excited to be part of the Atos OneCloud announcement and excited for the future with Atos. There's plenty more to come.
Hi, Elie, everyone. I hope you're all safe and well. It is my great pleasure to be here with you today. Atos and Microsoft have been great partners for more than twenty years, helping our joint customers to take advantage of powerful digital innovation and cloud services. Our collaborations enable our customers to create many innovative solutions, and now, with the Atos OneCloud program, Atos can support customers as they define their future state-of-the-art digital footprint, optimizing it across on-premise, private, and public cloud platforms altogether. With this deep industry knowledge, Atos can provide the right solution for each customer case. At Microsoft, we are proud to support the Atos OneCloud program and empower customers to embrace the full potential of the cloud. Thanks again for the opportunity to be here with you today.
Thank you for having me today. Congratulations to the Atos team on the Atos OneCloud initiative. The foundation of Atos and Google Cloud's partnership is helping enterprise customers digitally transform their businesses, and I am proud of the strategic alliance between our two companies. Over the past few years, our partnership has expanded, as has our opportunity to serve common customers. For instance, Atos launched Google Cloud Innovation Labs in Europe and the United States to help customers apply AI and machine learning capabilities to solve important business problems. Second, the addition of Maven Wave this year further strengthened Atos' global leadership position with Google Cloud. Third, Atos continues to support key Google Cloud initiatives, such as our bare metal solution for legacy workloads.
They have also supported our cloud acceleration program for SAP and our data center takeout modernization initiative, as well as our recent launch of Google Workspace. We are proud to call Atos a global partner, and again, congratulations to the entire Atos team on this important cloud initiative.
To my friends at Atos, congratulations on the launch of Atos OneCloud. Today, every industry, from energy to retail to financial services, is being profoundly transformed by technology. Technology has indeed become so pervasive that it's not just a transformation. Every company is now a technology company. Hybrid cloud is an incredible opportunity for the two of us to work together, combining the power of IBM's technology platform with Atos' expertise and skills, and we will bring tremendous value to our mutual clients. I look forward to seeing the remarkable outcomes this will drive as we help our clients embrace the promises of this era with rapid technological change.
We are really delighted to be part of the OneCloud announcement. You know, Red Hat and Atos have been partnering together for more than twelve years and delivering innovative solutions together in that time. At Red Hat, we really pride ourselves on our open culture and collaborative way of working. This spirit of collaboration has enabled us and led us to develop AMOS, cloud-based managed version of OpenShift, which has brought huge advantages to how Atos' customers operate in the cloud. We believe our open hybrid cloud model, coupled with your OneCloud platform, will provide an open, flexible, and secure set of solutions for your customers to succeed anywhere on the cloud. We are very excited to be part of your ongoing journey and look forward to the future.
Thank you very much, colleagues, for your testimonies and your support. This support with the launch of Atos OneCloud will intensify in the next month, just like we announced today a reinforcement of our partnership with Amazon Web Services. Let me now come to the third feature of Atos OneCloud, which is an important aspect of our delivery. We developed a highly standardized and automated management framework and architecture, meaning fast approach and capacity to deliver technology-enabled services in minutes. We don't talk about this enough when talking cloud migration, but you know how key this is. As an example, at Willis Towers Watson, a major contract we signed in Q3 this year, we enhanced the business experience by moving on-premise infrastructure to the cloud, Azure in particular, in this case, retiring legacy hardware and software and shifting to a consumption-based model.
What is key in this example is our ability to implement automation features to reimagine the end user experience through the use of chatbots, digital lockers, and virtual technology bars. Fourth, as you know, Atos has been for years at the front end of sovereignty matters. Next generation private and sovereign cloud platform is now ready to be deployed and managed in any data center to ease the migration to the cloud, while ensuring compliance requirements are met around data sovereignty, localization, and security. As an example, at the U.K. Network Rail, Atos migrates all applications from legacy data centers into a new digital private cloud. Our customer will benefit from a highly secure, robust, and cost-effective digital foundation for business, while ensuring agility in a technologically converged environment.
To illustrate all this, I would like to share a message of our great and long-standing partner, Michael Dell, leading Dell Technologies, obviously, which notably enables Atos to deliver to the market the most advanced private cloud and virtualization platforms for data center modernization and cloud transformation through VMware. Please, Michael.
Hello, everyone. I'm honored to join you today to help launch the Atos OneCloud, and to recognize the Dell Technologies-Atos partnership that spans more than a decade. Our partnership is deeply rooted in a shared vision to deliver integrated technology solutions to customers across the globe, and I'm confident that the Atos OneCloud will deliver unique benefits to customers and help accelerate their competitive strategies. Congratulations to the entire Atos team. And on behalf of the global Dell Technologies team, we are grateful for our partnership, and we look forward to continuing to serve the needs of customers together. Thank you.
Thank you, Michael, for your great support, as always, and also for our enhanced collaboration, also announced today. Let me get to my fifth feature of Atos OneCloud. Armed with the Dell EMC VMware portfolio, Atos experts analyze existing estates, recommend modernization strategies, and deploy agile future-ready applications to any digital cloud platform powered by Atos digital hybrid cloud solution. Benefiting from up to 66% faster development life cycle and up to 300% increase in developer productivity at lower cost, our customers are equipped to compete with digitally driven businesses. Here again, Atos OneCloud allows our customers to accelerate business-critical applications' time to market with our cloud application development modernization and replatforming, including strong DevSecOps.
As an example, at Capital One, Atos Maven Wave has delivered a broad range of services, including application development, microservices architecture, G Suite migration for 65,000 users, and data migration on the AWS platform. Sixth, we developed cloud artificial intelligence and machine learning in-house capabilities to enhance business processes, create new solutions, and monetize enterprise data, but we also give access seamlessly to our partner ecosystem of fantastic AI ML features. As an example, at T-Mobile, together with Google Cloud, we redeveloped their chatbot based on the Google Cloud AI technology to significantly enhance end-user service quality. Another example, at AAA , Atos Maven Wave moved five of the largest core datasets to Google Cloud to give AAA a 360 view of customer products and interactions.
Atos Maven Wave delivered machine learning projects to provide improved calculations and truck assignments for AAA 's roadside assistance services. This overall AI ML expertise is supported by migration capabilities towards cloud-native database. Atos Innovation Labs drive interactions between our customers and Atos data analytics experts, as well as our partners' experts in design thinking workshops. One very, very important differentiator at Atos is also the fact that on top of our integrator role, we produce in-memory servers with the highest processing and memory capacities. Therefore, our world-leading so-called bare metal solutions support non-virtualized business-critical applications adjacent to the cloud to increase the breadth of consumable cloud services. This is the case of large SAP instances, for example. And by the way, let's take a moment to listen to Christian Klein, CEO of SAP, talking about Atos OneCloud.
Dear Atos colleagues, dear Elie, congratulations on your Atos OneCloud announcement. I would like to take this opportunity to emphasize the strong partnership between our two companies. Building on our successful partnership for more than thirty years, it is great that we are now joining forces to drive the transformation of our customers in the cloud. I truly appreciate your trust and support, and I'm looking forward to continuing our close partnership.
Thank you, Christian. Let's talk now about Atos Cloud Edge and Far Edge solutions. As you know, a very important number to have in mind: today, 80% of the data is produced in the data centers, 20% outside. 2025 will be the reverse. 80% of the data will be produced at the edge, 20% in the data centers. At Atos, not only we can integrate and orchestrate the cloud and the edge at the same time, but we also produce unique edge servers, allowing us for an end-to-end setup for our customers. Combined with new 5G connectivity solutions, we ensure secure and local processing and optimize bandwidth consumption.
Today, for example, we announced a unique partnership with TIM, where cloud enables TIM to play a new role in the digital economy, leveraging data sovereignty, data security, 5G, and edge computing at the same time to create new services for our customers, for example, in the area of IoT. Nine, our world-class cybersecurity operations centers are meanwhile operating and responding to cloud-native security controls and anticipate threats in a prescriptive mode, not anymore in a predictive mode. Atos is clearly committed here and invest on this key topic for cloud projects. We announced, by the way, recently, a series of acquisitions: Paladion, SEC Consult, Digital Security, Idnomic, you saw all of them, which complement our expertise in digital security very nicely.
Last but not least, number ten, I would like to talk about another strategic differentiator of Atos, decarbonization, addressing four pillars: decarbonization assessments, decarbonization of our customers' core IT, decarbonization of our customers' business processes, the non-IT part, and our carbon compensation proposals. Our decarbonization offerings guarantee year-on-year carbon footprint reduction of cloud infrastructure, data, and applications. And because we are serious about it and about our customers, we have introduced DLAs, Decarbonization Level Agreements, where we commit on this carbon reduction trajectory. If not achieved, we will pay ourselves the compensation. We have just signed a very important contract with PwC in that field, as an example, and we have already a promising pipeline for signatures. These ten features are Atos OneCloud.
I really do believe that Atos is uniquely positioned to deliver the full value of cloud, but it is now exactly the right time to accelerate and proactively engage with our customers on this modular approach. Atos OneCloud is the only solution on the market that blends industry-customized consulting with application transformation expertise in an end-to-end set of services. It is the answer to help further accelerate our customers' digital transformation into secure and decarbonized cloud environments. As a world leader in operating hybrid and multi-technology application platforms, together with our powerful ecosystem of partners, our cloud and industry experts are ready to co-design and deliver end-to-end a customized cloud roadmap for our customers' enterprise transformation. Atos OneCloud is built upon a series of world-class assets from Atos. Our data center outsourcing and digital hybrid cloud managed services capabilities, where Atos is recognized as a global leader.
Our world leader position in cybersecurity services. Our Decarbonization Center of Excellence, designed to help global organizations delivering trusted cloud strategies that achieve end-to-end carbon reduction, integrating notably contractual DLAs, as I've just talked about. Our global force of seven thousand cloud experts, thirty thousand application experts, ten thousand data center and network experts, and six thousand and five hundred cloud certifications. Our recent acquisitions in the domain, like Maven Wave or Edifixio, our investments in cloud expert training and certification, and our investments in a graduate program, Ignite. Our four cloud artificial intelligence and machine learning customer labs to enhance the value of our customers' data.
Our investments in cloud research and development with in-house patented solutions for orchestration, automation, private cloud, cybersecurity, bare metal, and edge computing, or in the co-development of European cloud standards, as founding member of Gaia-X, to ensure cloud interoperability and application and data portability. These Atos cloud assets I just detailed are at the service of our customers and beyond. They are organized into one holistic cloud practice across all of Atos for maximum efficiency and impact. Atos delivered integrated cloud services for leading cloud-forward organizations in all industries around the world. You can see a few names here. Many more customer stories we'll be able to tell you, and many more to come. Today, and the next days, will be dedicated to specific sessions with customers by industry, as well as partners, to go through use cases and deep dive in customer journeys.
As you have seen already, the secret sauce of Atos OneCloud is to be delivered by Atos in very close collaboration with a world-class partner ecosystem, including, in particular, Amazon Web Services, Dell Technologies, including Dell EMC and VMware, Google Cloud, IBM- Red Hat, Microsoft Azure, SAP, ServiceNow, Salesforce, and many others. Customers will benefit from the close integration of these leading cloud technology providers. The ecosystem is built to allow our customers to implement new technologies at speed and reduce implementation risks. The Atos OneCloud partners will also actively contribute to decreasing the required upfront cloud investments and bring solutions to train customer IT and business staff to make optimal use of new technologies. We are very proud having this unique ecosystem at the service of our customers now and tomorrow.
All in all, to support Atos OneCloud initiative, we have decided of a massive investment program of EUR 2 billion over the next five years. To accompany the strategic shift announced, Atos will make significant investment in its full stack of cloud capabilities, expanding the existing pool of expert certifications, accelerating R&D outcomes, pursuing cloud investments for customers, and multiplying self-finance acquisitions. These investments will contribute to reach the targets we have already presented in our midterm plan. To conclude, Atos OneCloud is a group strategy and a pragmatic methodology at the same time. Committed to drive business results, supported by a deep, long-term investment, this one-stop shop to boost enterprise cloud business value is available already now. This is a unique approach on the market. Many do part of it, we do all of it.
From today onwards, Atos offers to both existing and new clients the opportunity to co-create their personalized Your Atos One Cloud plan in ninety days. Together, we will build customized cloud business cases, an industry-specific cloud reference architecture, and a roadmap for applications, data, and infrastructure modernization. The end result from an Atos One Cloud engagement will be a future state-of-the-art digital footprint, optimized across on-premise, private cloud, and public cloud platforms, customized to fit our customers' unique business needs, again, industry by industry. Thank you for your attention, and let's now move to your questions together with Uwe, our CFO, who you know very well, Jean-Philippe Poirault, our Cloud Executive Sponsor, and Gilles Arditi, who you all know very, very well. Thank you for joining me now, colleagues. Thank you for joining me. So let's start with the question. Gilles?
Good afternoon. So if you want to ask a question, please open your mic, and please, introduce yourself, and then you will be able to ask your question. We also have questions coming from the chat. So before we have the first questions, I'm going to start. First question is: midterm, what are the risk that the hyperscalers want much more than hosting revenue?
Maybe Jean-Philippe, if you want to start, and maybe Uwe, afterwards, if you can give some numbers in our model, I think would be helpful for our colleagues here. JP?
Yes, absolutely. So, between the hyperscaler on, on Atos, we have very complementary, model. You know, the hyperscaler are more global building data center, and we have a mix of global and local. We are extremely close to our customer. We manage their IT, we manage their application. Honestly, there is not enough people at the moment. We have a people-intensive business, and there is not enough people knowledgeable about cloud, and this is why we are investing a lot. So we are here to complement their business in terms of transformations. They need us, we need them, so this is very complementary on the people side, on the business transformation. I would like to have one more point, which is also a differentiator of Atos.
On the product side as well, we are the edge computing, and we have the Bare Metal services, for which we have built the Bare Metal services with Google and with Azure, which is really remarkable, and as more the edge computing will develop, we'll see also more complementary, you know, work between the two company also at the edge.
Edge will require a lot of integration services.
Absolutely.
even more than now.
Absolutely.
Uwe, you want-
Jean-Philippe, if we talk about the revenue and the growth, what we have currently is about 15% of Atos' revenue.
Excuse me, Uwe. Maybe I think we have,
Oh, yeah
... one slide, maybe would be easier for our friends connected to, to follow. So if you can show the... Yes, exactly. Please go ahead, Uwe.
Thank you. Thank you, Elie, that helps. So overall, in twenty nineteen or roughly, you know, today, we have about 15% of our company's revenue in the cloud. We expect that to double, and then representing 26% of the company's revenue to be in the cloud with these different components, as you can see here. And this is a quite conservative approach because what JP just mentioned, it does not even include the edge, the contribution, you know, in the edge revenue, which would be on top of these, of these revenues. So pretty substantial growth over the next years.
Thank you, Uwe. Thank you, JP. Gilles?
Yeah. Is there any question from the audience? Please open your mic.
You can ask the question live, huh?
You introduce yourself, and then you can ask a question. Otherwise, looking to the chat box. So, several questions about the percentage of Atos revenue linked to cloud today, and the breakdown with public cloud and the rest.
I think we can go back to the same slide, because there were-
Yes.
This information was also there. So if you can go back to the... Yes. Uwe?
Yeah. So as you can see, in twenty nineteen, or roughly speaking, in current times, we have the largest piece of our cloud revenue is in private cloud, a smaller piece in the public cloud. And you see that revenue stream going up and doubling, actually, in the more than doubling in the public cloud, and more or less roughly staying stable on the private cloud. So the portion of public cloud will grow, especially over the next few years as more business-critical applications, as Elie was explaining, go into the cloud.
And on top, you see a quadrupling of the services around cloud transformation, application modernization, but also security and bare metal as components of the overall revenue stream, which we see today being rather small, but going, you know, by four times in these service components over the next four to five years.
Thanks, Uwe.
Next question?
Yeah.
From the audience?
Gilles?
Yes, please.
Yes, Gilles, good afternoon, everyone. This is Antonin Baudry from HSBC. Yes, cloud appears definitely as a growth driver for you, but also for your competitors. So I was curious to know the main difference you see on what you announced today, on probably what your competitors are doing today. Thank you very much.
Yeah. I will start with... Hi, Antonin. I will start to answer this one, and I think JP will certainly complement. What we announced today is unique in several dimensions. The first dimension is to create this one-stop shop and with such a variety and a breadth of offerings. We are the only one to have such a breadth of offering. These are the 10 features I took you through. We are the only one on the market worldwide to offer this breadth. And the fact to have gathered them under one roof internally, to be able to serve our customers with one face externally, is, I think, very unique.
But the second dimension is also, within, the ten, those ten offerings or features, if you like. You've got several of them which are pretty unique. We are the only one to integrate and produce edge servers. We are the only one to produce and integrate bare metal solutions. We are number one in cybersecurity in Europe, number three in the world. It's a unique positioning. We are the only one to have launched such a breakthrough in decarbonization, whose feedback from customers is tremendous, et cetera, et cetera. So number one, it's really putting everything under one roof, which is, in terms of go-to market, very powerful. And when I say everything under one roof, it's, again, a portfolio whose breadth is unique.
And then it's some of those components are themselves individually totally unique at Atos. But please, Jean-Philippe, you want to complement here?
Yeah. You said it super right, you know, Elie. I think, for our customers who are trying to navigate towards the transformation journey towards the cloud, they want a partner who can help them to navigate at the infrastructure layer, at the application layer, at the data layer. They are all asking a lot of question about security and also, now also decarbonization. I want to take one example and customer example. The agreement we signed and we have announced today in terms of the exclusivity negotiation agreement with Telecom Italia is exactly a good example.
Telecom Italia signed a major agreement with Google more than one year ago, and they were looking for a partner to help them to create a data sovereignty platform, so that they help the enterprise in Italy to migrate their data along the chain from the edge to the data center to the cloud. This is what we can offer.
Thanks, JP.
Next question?
Thank you, Antonin.
Thank you, Antonin.
Next question. Otherwise, we go to the chat. I think I saw Hannes from UBS earlier on the-
Hannes, are you still there? Opening your mic.
Yeah, for while-
I'm sure there are others otherwise, huh?
Let's go to the chat.
Okay, so we go to the chat. One question is, how what do you expect in terms of revenue in the future for Edge IoT, and how does this connect with your cloud initiative?
Uwe?
Yeah. So Edge, as I was explaining before, it's not included in this picture, which you see in front of you around the cloud development. And we expect about EUR 600 million, circa EUR 600 million, revenue stream mid-term, so in the next four or five years, to be at circa EUR 600 million per year, and therefore, a substantial part of Atos.
Thank you. So if you have another question from the audience, please do not hesitate.
... maybe you can comment on-
Yeah, no, please, please, JP, go ahead.
Also, on edge computing, also what Uwe mentioned is really in the range of what we see on the transformation in front of us. You know that there will be something like 75 billion connected devices in the next coming years. They will create a lot of data. And what we see that there will be an inversion of the way the data will be processed. 80% of the data are processed in data centers today, 20% at the edge, and in the coming years it will be the opposite, 80% at the edge and 20% in the data center, so which will, you know, increase the business in the coming future.
We will have, I think, by the end of the year, on the edge, we will be able to announce sizable deals for the first time. So far in the last year was a PoC, proof of concept or smaller deals, projects. Now we are moving, for the first time, to sizable deals, and I think I'm watching Uwe so that I don't say anything wrong, but I think we'll be able to... Yeah.
First at scale, right?
Yeah, scale.
Projects.
Exactly. Exactly. In retail. Gilles?
Thank you. And any new question? Otherwise, one came: do you consider decarbonization will help to increase cloud revenue? And did you start to partner with hyperscalers?
JP, you want to take this one?
Yeah, I can start about decarbonization. What we see at the moment in the transformation of our customers, they are all considering, as they move to the cloud, most of the time also consolidating their assets, consolidating data center, modernizing their data center. It is the right moment for them to consider at the same time, "Well, how can I improve my carbon footprint? How can I decarbonize also all my assets?" Most of our customer engage with us in a transformation journey, are also asking us this question, is that: "How can we combine the two, the transformation to the cloud, the consolidation of data center, as well as decarbonization?
I think I see, Gilles, it seems that there is a question from Neil Steer.
Yes. Can you hear me okay?
Ah, yes, we can hear you.
We can hear you, please.
Okay, great. Thanks. Just for clarification, could you possibly say, of the EUR 2 billion that you're announcing today, how much of that is incremental investment to what you otherwise would have had in your plan over the next five years? And could you break that down into what is incremental OpEx and what is incremental CapEx and M&A spend? Thanks very much.
I think, I mean, the answer is very quick. It's not incremental, so it's perfectly in line with our plan. So there is nothing new here. What's important is to gather all this in the same center of decision, if you like, to make sure that we have a very strong consistence internally, but that's not the most interesting, externally to our customers in terms of capabilities, and we make sure that we grow super fast in certifications, in accreditations, in capabilities, through inorganic and organic, and in R&D, especially on the topics we mentioned earlier. So there is no... So we'll not give any breakdown of the increment because there is no increment. It's gathering, again, at the same, in the same place, under one roof, all those capabilities. Thank you, Neil.
I have a question as well, Hannes Leitner from UBS.
Hi, Hannes.
Hi. So Michael, Michael doesn't have a microphone, so he asked me to ask, you know, just as a follow-up from Neil's question: In terms of this EUR 2 billion investment, could you talk us through the breakdown between OpEx, CapEx, and then also M&A? And then the second question is regarding your Capital Markets Day. What has changed since then? Is this all new findings, and why was this not presented already at the Capital Markets Day?
Yeah, I will take the second question, and Uwe will take the first one. At the Capital Markets Day, what we explained is that we launched SPRING, the verticalization of our organization. And as part of SPRING, we started to build the Atos OneCloud. And we got to the maturity now where we launch it to our customers. So the... You have to see this as a total consistency with what we announced back in June, so what, four months ago, five months ago, as part of SPRING, with this Atos OneCloud offer, which will feed each of the six industries in the group. So in terms of numbers, these are, that was embedded already in the trajectories that we gave at that time.
But again, we are, that's part of the transformation and reorganization of the group and the way we interact with the customers and the portfolio that we propose to them. This is the way you have to look at it. So Michael, and I understand Michael is behind you, Hannes, so here is the answer to your second question. On the first question, Uwe?
Yeah, perhaps around, which we also, you know, talked about in the Capital Market days in June, was that our capital intensity overall will actually decline, and that's also in line with what we talked today. So the overall structure of the business where we are roughly 3.2% today in CapEx will actually decline also, including this cloud investment, because the minority of this investment will be CapEx, as you can imagine, as we are using, of course, a lot of the public cloud resources. So therefore it's only limited to, if you want, tooling and some software which we need to do. So overall, the capital intensity will go down from the 3.2% further down, as we had also talked about in our midterm target.
So fully consistent with that.
Thanks, Uwe.
... So maybe you, the audience, please?
Yes. Hi.
Please go ahead. Who's talking?
Yes, hi. Please go ahead. Yes, hi.
Let's go, Nicolas.
Nicolas?
Yes, yes, this is Nicolas from ODDO BHF . I have actually two questions [to Elie] . First is, what is your current growth rate of your cloud offering, cloud transformation offering, and what kind of growth do you see midterm? Is it the current growth rate sustainable? And also, when should we expect, when should we see the inflection point when the cloud grows? Clearly more than compensate the decline from traditional data center US. When should we expect an inflection point there? Thank you.
Thanks, Nicolas. Uwe?
So overall from a, let's say, growth rate, which we also have in this, you know, in our trajectory, in our midterm plan, we are above 15%, CAGR in this, in the cloud offerings, which is the combination of, what you see on the screen, more or less, between public, private cloud and the different services around which make up the Atos OneCloud. And as I said before, that's on the conservative side, because we have not included the edge part, which, of course, will accelerate that growth even further.
To your second question around the inflection point, I truly believe we are at that inflection point, because even today, we are below 10% of what you would perhaps consider classic infrastructure of our overall revenue, which was a much higher share, as you know, the previous years. We are now at a point where this is very a smaller part, and where the cloud growth is already overtaking and more than compensating the classic infrastructure.
Thanks, Uwe. Thank you, Nicolas. Next question, please. So-
Okay.
So-
Yeah, you have on the chat.
Which industries or geographies do you see the greatest potential for Atos multi-cloud, and how soon do you expect this to impact the revenue growth?
Maybe, JP, you want to take this one?
Yeah, I can start. I think, at the moment, we have, for sure, different perspective in the different geography because business started a lot by U.S., you know, where the hyperscalers, they build their data centers there, but they are developing, at the same time, most of their data center in Europe. So we see a huge demand in Europe, of multi-cloud, as well as we see in U.S., but also at the moment, more in Europe, probably. And this is why we are launching this program, to have this work across the different cloud providers, you know, between Azure, GCP and AWS, as well as the private cloud.
It's a business which started, I would say, in the U.S., you know, full speed, but which I see for also myself coming back now from the U.S. to Europe. I see Europe from catching up step by step and accelerating the business. We'll see an equivalent now growth probably coming in the coming years in Europe as well.
Thank you, JP. Please, a question from the audience? Yeah.
Yeah.
Yeah, I thought. No, no, no, no, I think it's Stacy. I think Stacy may be asking a question. No? Oh, I think we can continue with the chat then.
Okay. What are the cloud software vendors on which Atos has the highest skills and expertise? Are you trying to catch up partly with Salesforce and any other SaaS vendor on which Atos intends to invest?
So I think across the three major hyperscaler, we are quite balanced, and we're working with them, for, you know, with their strength and specific strength for all of them. But for the rest of the question, if you like, JP, I mean, you're yourself-
Yeah
... a former AWS employee.
Yes, we have an acceleration, so on this, so we are working for sure, as Elie mentioned, with the three hyperscaler. We are working as well with very key software vendors. So we mentioned also VMware today, SAP, where we are doing a fantastic, you know, activity with SAP. We just did an acquisition recently, which is on its way with Edifixio, which is going to bring us also additional strengths on Salesforce. But more than that, you know, what is super important, the transformation that Elie and the team we are implementing with SPRING, we are accelerating also the partnership in the different industry with different key software vendors. So I can mention RingCentral in the TMT and telecom media industry.
I can mention Vlocity, which is part also of Salesforce, also the TMT domain. So many vendors, you know, in each industry for which we are accelerating the partnership as we speak.
Thanks, JP.
Thank you.
Any question from the audience, or we go back to the chat?
So on the chat, we have one question. Does cloud migration will be helped by more automation in order to increase the operating margin?
... Yes, maybe Uwe, can you answer this one? Also, because when we talk about automation, I think we need to distinguish the automation during the migration phase and automation during the run. Okay, and both come with advantages, including financial advantages. Please, Uwe.
Indeed, I mean, this is the whole thing about cloud is about standardization, and also in the Atos OneCloud approach, it's about standardization and automation. And it's both, as you said, in the migration phase, where, of course, by automating this process to accelerate, and secondly, also on the run, meaning on the constant move of workloads or the orchestration. And what we see, at least in the deals we had already signed, and we have a higher margin profile, and this is also part of our journey over the next five years to expand our margin. That, of course, through automation, and especially in cloud, we'll also see a margin expansion to the bracket which we target of 11%-12% overall of the business.
Automation is for sure a big part of that.
JP, you want to add something on this?
No, I can. Exactly what you said, Elie, there are really two parts, you know, the automation during the migration, and here we are working a lot. We just announced today our platform of automation, you know, in the context of Atos.
Yep.
We are working with VMware Tanzu, you know, to accelerate that with our different other partner working the automation space. But as well, you know, as you mentioned, there's a second part, which is when we run the activity in the cloud, as a cloud provider, whether it is AWS, Azure or Google, are very, you know, standardized, very automated, the margin is better, you know, so we see the two different parts, and we'll continue the investment, you know, as you know, there is more and more features in progress.
Thanks, JP. Question from the audience. Audience in live here? Do not hesitate. You need to open your mic. Okay, otherwise, we move to the chat.
Okay. So do you have Atos OneCloud initiative today because you feel an acceleration coming from the COVID to cloud? Or is it SPRING verticalization transformation program, which requires an acceleration and then to have a full offering?
It's a very good question. To be very transparent, we had started this initiative before COVID, and we had started to design it, and it was part of the underlying engines of SPRING. Of course, with SPRING, and that's what we communicated to you all at that time, we started with the front end, being able to be organized by industry to present ourselves to our customers by industry, which was the big move. But of course, we needed to change the offering, to reshape, to reshuffle the offering, and to rationalize the offering. And we had in mind, of course, and we have in mind for other offering, but for the cloud, which is in fact the biggest offering in the group, right?
It's a gigantic piece of our business, it is going to become, as Uwe explained, even bigger. We had already in mind to do this. But it is true that, COVID has accelerated the need, for cloud and for this Atos OneCloud initiative, obviously. I don't see any name from the audience, so, there is more success on the chat. In term of M&A, what kind of cloud expertise do you target to complete your portfolio offerings? Uwe, you want to take-
Yeah.
-this one?
What we are looking for is a good match, I would say, or a good balance between the different hyperscaler expertise. What we started with, of course, Maven Wave, very much in the Google space. Now, we are having Edifixio and also Eagle Creek in the other areas of hyperscaler, of the other hyperscaler. For sure, the purpose is to have expertise, especially around migration and transformation of applications for all hyperscalers. Secondly, I would say also in a geography kind of distribution, right? Where we started with Maven Wave mostly in the US. Now, of course, we have with Edifixio as well, Europe and also other places between the different geographies.
So I would say a mix between the hyperscalers and the geographies.
And if I may, because I think it's so natural and obvious that you didn't mention it, but, for the audience here, it's important that we concentrate 100% of those acquisitions on the application layer, application and orchestration layer, including automation if needed. And that's very important to understand. We consolidate and we solidify, strengthen our capabilities in application development, modernization, replatforming into the public cloud. Gilles?
Yeah, so do you consider one of the three hyperscalers as more dynamic than the others to partner with? What kind of own specificities do you see for each of them?
Our view is very balanced across the three of them. We work with them very, very well. Really, it's not a politically correct answer. We work with them very, very well, and our collaborations with the three of them has accelerated over the last year. We are a managed services provider, MSP status with the three of them. So this relationship is very strong with the three of them. Now, JP, if you want maybe to.
Uh-
-go deeper in the strength of-
I think, again-
One or the other? Yeah.
As you said, we work super well with the three. They are all coming with different history and different business history. Google from the history of the data, AWS from, you know, the history of infrastructure, yes, and based on all the cloud-native startup and development of the activity with a huge experience and strong leadership, and Microsoft with a strong experience in software B2B. So for us, we see them also very complementary, and we are working extremely well with the three of them.
Okay. Thanks, JP.
Maybe connected to that, are big data products embedded or involved in your cloud offerings and activities? Is this compatible with your partnerships with hyperscalers, Dell or SAP?
Yeah, absolutely. I'm sure JP can elaborate on this.
Yes, and this is important, as in all discussions we have with our customers, and again, discussion we have with Telecom Italia about how we manage the data across, you know, from the edge to the cloud is important. No contradiction, you know, of the way we work with the hyperscalers. It's very complementary, very complementary. And the question we get now from many customers is: Where should I process my data? You know, part will be processed at the edge, part will process in some private, you know, cloud, part will be processed in the public cloud, and this is where Atos play a major role. In this context as well, we also secure the data and secure the processing along the chain. So super complementary. We work extremely well with Dell and VMware building those solutions as well.
We have our own servers as well at the edge to process the data, so we will see this well-balanced hybrid solution, you know, moving forward.
I think we have time, Gilles, for a last one.
Yeah, okay.
Do you see more cybersecurity in cloud contracts, both at the time of migration and for recurring part?
Yeah, the answer is definitely yes. It's important to understand that, which was not the case five or six years ago, but now a vast majority of our contracts in any area, actually, you know, infrastructure, application, embed the cybersecurity piece. So it can go away from 5%-10% of the overall value, so it's always a minority in terms of economic weight, but it's this entanglement between cybersecurity, statement of works in the contract and the core contract, whatever it is, is key to understand this competitive advantage we have on the market, and that was one of my 10 points to explain, that we are unique in that way, given our positioning in cybersecurity, so the answer is yes, it's now in the vast majority of the contract.
I repeat, it was not the case, at that time, I mean, at the time, five or six years ago. And it, the nature of the cybersecurity, which is requested from customers, also changes. I mentioned again, Paladion earlier. Very important to understand that within our capability, it's not just that we are number one, for from a quantitative point of view. Also number one because of the quality and the breadth of our offering. And with the acquisition of Paladion, we had already some capabilities, but with Paladion, we significantly increased the MDR, so-called MDR, technologies and capabilities, which is about prescriptive SOC.
Meaning that we manage, thanks to this technology and thanks to the use of massive data, to identify threats before they actually materialize at the level of between 70%, JP, 70% and 80%, which makes a huge difference, compared to the old, you know, the threat happening, materializing, and then you are curing it and fixing it. So it's a massive competitive advantage we have with cybersecurity, which is now irrigating, fueling, feeding a vast majority of our contracts. I think we have to close because we're running out of time.
There are a lot of questions, and sorry, but we will try to answer.
Anyway
... in the future.
We are.
Okay?
Yeah. We are always available for you through Gilles, of course, anytime later today or any day. Thanks, Gilles. Thank you, JP.
Thank you.
Thank you, Uwe. Thank you all for your participation, and talk to you and see you all very soon. Thank you.