Good morning. Welcome to this Atos Analyst Day focused on Tech Foundations. We thank you very much for being here today, we have got some exciting updates to share with you. I'm Thomas Guillois, I'm the Head of IR for Atos, and I'm going to walk you through our agenda for today. Nourdine and his management team are going to present on where we stand in our plan to refocus, recover, and rebound, then the go-to-market strategy, then the business lines within Tech Foundations, the comprehensive transformation plan that's being executed, and lastly, our revised financial plan for 2026. We'll have one Q&A session after the presentations, and we'll finish with a cocktail lunch that will be served downstairs at around 1:00 P.M. We hope you enjoy this event, and I will now leave the floor to our Group CEO and Co-CEO in charge of Tech Foundations, Mr. Nourdine Bihmane.
Hello. Ladies, gentlemen, dear friends in the room, good morning and welcome. Welcome to this day dedicated to Tech Foundations. Tech Foundations customers, Tech Foundations employees, Tech Foundations as well, business and strategy, how do we see the future moving forward? One thing for sure I could share with you, the future is bright for Tech Foundations. I'm really delighted as well to bring here to the scene and show you how the entire 50,000 employees have been committed and have been empowering the entire organization to deliver those early results that I have been sharing with you. Maybe before going there, I need to give you a little bit of group update, because all of that is in the context of the group, yeah? Number one, the separation is well on track.
We'll be announcing pretty soon that the operational split will be done, the result that you see on both entities, Eviden and Tech Foundation, are confirming that we are addressing different market, we are addressing different buyers, and we need to have specific management system for each of them. Furthermore, we launched the Eviden commercial brand beginning of April, which is getting a lot of momentum. Second, as we mentioned in Q1, but as well as we sit now regarding Q2, we are really confident, sorry. We are really confident in our full year guidance for 2023, top line and bottom line. Maybe last but not least, in the last two weeks, the U.S. Court of Appeal have vacated the $570 million of the TriZetto judgment against us, which has reduced significantly the exposure for our shareholder.
Now let's take a step back and talk about Tech Foundations. There are four messages, key messages that I want you to take, and then the conclusion out of it. Number one compared to last year, we are redefining our addressable market by expanding our services in two main areas: the hybrid cloud and multi-cloud infrastructure, which last year we presented to you like private only, private cloud only, and expanding new services also in our technological services business line, where we are going to add naturally the advisory and customer services. With that, we're able to expand the target addressable market, and now we are repositioning Tech Foundations in a growing market between 3%- 5% moving forward. Second, last year in the Refocus, Recover, Rebound plan, the first part of the refocus was to exit the non-strategic revenue.
Revenue, which was creating margin issue, decline, and cash issue. Here we are continuing operating that shift by reducing the non-core activity, the pass-through or hardware, software resells, the BPO business, but as well the red account, and in the transformation plan, I will go deeper into it. When you do that, we see that the core business, which is linked to our core activity, in fact, last year has been growing 1.2%. In the projection from now till the end of 2024, we are projecting that core business to stabilize between 0% and 2%. That was the good news that everybody underestimated at that time, that the core business of Tech Foundations has been stabilizing and is going to get back to grow, slowly but surely. Number three, our main issue was the margin and then the cash.
We had to put in place an unprecedented plan in the Atos history to improve by EUR 1.2 billion our gross operating margin run rate. We started it, we did it with all the frontline leader. It was a bottom-up plan, we are well ahead in the execution of it. You will see later. Third, you have seen that quarter after quarter, now 3 quarters in a row, we have been beating the objective that had been put in place in the Capital Market Day last year. With all of that, me, with the leadership team, we believe we could upgrade our guidance, the guidance we shared with you last year for Tech Foundations. Last year, we told you it would be 5%, today we are coming in front of you to readjust it to 6%-8% by 2026.
Last year, we said that the cash flow will be positive in 2026. With more confidence, we are saying it will be one year earlier, and by 2026 it will be $250 million+. In the overall cumulative cash flow, we believe today that we are above $300 million, better, higher than what we presented in the plan last year. Just to share with you, I'm super excited. The team is fully committed, and we believe we could deliver that plan like we have been delivering the previous one. Now I will deep dive in each category to give you a little bit more flavor on what are behind those key messages. First, I say that we are expanding our addressable market.
Last year in the CMD, we presented an addressable market of EUR 490 billion, which was declined in -1%. When we get together with the team, it was clear that we needed to rotate our portfolio and go and grab more organic growth. In our business, and especially managed services, if you are not stabilizing the top line or growing it at least a little bit, all your cost improvement action are diluted. That was the urgency with the team. When we get the team together back in February 2022, that was the first focus. To put in place the sales engine is taking us between 12- 18 months, yeah, and we'll go a little bit more on that.
We had one lever which helped us delivering what we deliver, which was the upselling and fertilization of our large contract. We mobilized all our account team, all our delivery folks, to be able to go and sell to the customer all those change requests that you do normally, naturally, on top of those large contract. Now we needed to shift to more. This is where we decided to launch new offering. I will come to it, what content was new offering. We name it Digital Business Platform. Alexa is in the room, and she will be able, during the breakout session, to give you more insight. We also extended the core business, which was our infrastructure business, representing 40% of our revenue, now to be able to address the cloud continuum of our customer.
We have more than 20 years of expertise and know-how in managing data centers, managing private cloud, but we had to extend it now to the new world, to the hybrid world, and not resistant like we have been doing over the years. Extend it to the hyperscaler worlds and extend it as well to the edge, and in between, there is the sovereignty market share to grasp. What we are saying here, shifting now to an addressable market, improving, even if a shy growth, but going to a growth between 3%-5%, which is 40% higher than last year capital market day.
Here, the main root cause of that portfolio shift was we were running so much for organic growth that we were grasping any kind of revenue, including what I call the bad revenue, which was not coming with the right profitability nor the cash. We had to look deeply with the team into that entire revenue segment and define what is strategic, what is not strategic, and what is the action moving forward, or what is the revenue moving forward that we will not go after? It took us some time, but we came to that list, and we decided now to exit that business. That's why in the last publication, I was talking about a managed decrease. We are not suffering that decrease, we are deciding it. We stopped some BPO contract that had no synergy with the rest of the core business.
We stopped all the pass-through or hardware resell, hardware-software resell, which was not bringing a lot of value in our books, nor for the customer. We are keeping the one where we deliver migration services and integration services, but not the rest. Then we have been starting addressing, as you will see, red account, where the T's and C's of a commercial agreement were not the right one. Based on that, what are we projecting is that non-strategic revenue will be managed to decrease to 6% by 2026, and the core revenue, and this is where the underlying message is important, the core revenue, which will be the sum of the business line that we're going to present later on, is on a path to grow.
It's a shy growth, it's the right growth, it's the growth we want, we need to make sure the EUR 1.2 billion plan contribute fully into our margin expansion. That plan. Again, 2021, we were loss-making, we knew the root cause. Most of it was in continental Europe. We never address during the decline of Atos over the last year, we never address the highly cost structure we had in some of the European country, to be specific, in Germany. We had to do something to make sure that we don't carry on with that profitability issue. We decided to put in place an unprecedented plan, as well, maybe the first time in the history of Atos, such a headcount reduction.
We announced 7,500 headcount reduction by 2026 for Tech Foundations. I will give you an update on where we stand in it. It was not only about headcount reduction, it needs to be a comprehensive plan addressing the entire scope of our business, including addressing the profitability of the contract, putting more discipline, more commercial rigor to make sure that the T's and C's and the margin generated by those contracts contribute truly to the cash flow of the company. Third-party spend, SG&A. We'll go in more detail, but it's more than 300 initiatives, and it's not just managed by the top. We have involved more than 200 leaders, frontline leaders in our business, in our geography, to drive those action on behalf of the entire team, and they are well ahead of their plan. Here, the result in 2022.
When we started, because some of you have been raising the question, how you have been able to stabilize so far? It's true that in 2021, we suffered almost -10% decline, and we had to address it, as I mentioned before. It's true that in front of us, we had also the potential announcement of a separation, and we didn't know how our customer will react. We have been conservative in the top line initially, because the level of uncertainty in front of us was so large that we didn't know that we would be able to recover so fast from the -10. However, with the mobilization of the team, with their commitment, but also with the customer, I've been speaking with a lot of CIOs and CEO, which were telling us, "Nourdine, we need Atos. We need Atos Tech Foundations.
You are operating our infrastructure for many years. You have the know-how, you have institutional knowledge. You are the one who could help us addressing the next wave in front of us about that cloud continuum. I have been overwhelmed by some of those testimony of customer, and the reality is, during the year where we announced that separation, we increased our revenue retention. We increased our revenue retention, thanks to our team and thanks to our customer. We have been able to stabilize the core business and even get it into that range between 0%-2%. Operating margin, here, we had to accelerate a little bit the plan. It's true for continental Europe with Paul and Diane and the team, we had to go through our employee representative to get their opinion before we started executing the headcount reduction plan.
However, in countries like U.S. and U.K., we started already in H2. We accelerated the execution of a plan in H2, which help us on top of starting terminating some underperforming contract, which help us getting back to positive three years earlier than the initial plan. That was important for us, that was important for the pride as well of the employee. It helped us a lot in the engagement on the ground level with all the 52,000 employee to show them that now we are back to positive and this is only the first step. Now, if I take a step back, with all of that, we decided to come in front of you today and to tell you that based on the fact that we're almost two year ahead in the stabilizing the core business, we think we could.
We could generate between 100 million- 300 million hi, basis points higher of operating margin. That's why we adjusted our range. We think as well, that we have been reducing the envelope of restructuring. You will see later on that we reduce it by almost 10%, because based on the current trend, we do believe that we could use less cash to transform and even raise our guidance. Yeah? Where we want to be in 2026, obviously back to growth, because we have been neutralizing the impact of the non-strategic revenue. The range of 6%- 8%, but the team is pretty ambitious, and I know they will deliver on their words.
In term of cash, position us, obviously, cash positive, but having a nice cash, at least in the beginning of 2026, of $250 million plus. That's what really we wanted to share with you. We are excited about it, and by the way, when there is interest, there is value, or when there is value, there is interest. Yes, it's true, we have received mark of interest, and the chairman and the board are looking at them, and I'm glad that we finally generated the interest different from last year. Now, I want to come back on that plan, refocus, recover, rebound, and share with you a little bit, how do we see the evolution of our portfolio?
Maybe just before, a quick introduction on who we are, because I know a lot of you were confusing us, thinking, "Oh, Tech Foundations is only data center," and it's totally wrong. We are a EUR 5.4 billion revenue unit with 52,000 employee across 69 countries. Maybe the thing which I'm the most proud of it, after spending almost half of my life in Atos, is the relationship we have with our customer. We have more than 1,200 customer, and half of them, we have been in a continuous commercial relationship for more than 10 years. That means we have been relevant for them during all their digital transformation over the last 10 years, yeah.
I will go deeper on the portfolio, but you could look already visually that the Hybrid Cloud & Infrastructure is less than half of the business. I think that's somehow the perception missed last year, but more than half of the business is positioned on growth segment and is growing, and I will get into detail. Staying on the ID split, revenue by region, we're not going to hide it. We have a strong European foothold, more than 66%. By the way, that footprint help us in our hybrid cloud strategy. Why? Because we have seen that the migration to public cloud are behaving differently in the U.S. versus Europe. Second, we have seen that the raise of sovereignty is much more, I will say, visible and transformed into contract in Europe versus the rest of the world.
Which will give us a definitely, with the footprint of data center we have, a fantastic competitive advantage into those new market opportunity. When you look on the right side, in terms of industry or vertical, we are pretty balanced. You will see here, more importantly, we are well positioned on those highly data-sensitive industries, which also generate that need of sovereignty. On portfolio strategy. Here, when we look at our market and we look what are the mega trends that are disrupting us, four. The first one is a pretty. This one, you know it. This is the hybrid way of working, and this one has been accelerating post-COVID. People, more than 75% of the employees want to stay at home, we keep that hybridization of the work between home office, offices.
What we see is the level of services those home office needs has transformed and has reduced, but has moved to a higher value chain that Leon and the team will describe to you. Here, it's a fantastic link to the Digital Workplace practice that we are pushing and investing on. Second, which is this one, is pretty visible, is the disruption of hybrid and multi-cloud, which is almost, I think, more than half of the companies have between two and three hyperscalers, multi-cloud.
More than 75% of the data is now produced at the edge. Something that is a new opportunity for us, we have started that revenue, it is still shy, but it is ramping up, is today we are managing data centers, we are managing workload on the public cloud for our customer. We are getting more and more ask and RFP to manage the edge services for our customer. Think about smart retail shop, think about smart hospital, all that distributed compute and that integration, that level of complexity for our customer, they are asking us as their IT partner, as their managed services provider, to be able to embrace and take out the complexity of that management for them. I mentioned already sovereignty with cybersecurity. More than 70% of the companies last year have received or have been victim of one of the malware attacks.
Here, the rise of cybersecurity will continue being important, and here, our strategic alliance and partnership with Eviden will be key on how we are going to deliver those services to our customer. Maybe last but not least, we have an unprecedented disruptive wave in front of us with GenAI, which is becoming a top priority for our CIOs and our CXOs, that we are fully integrating and embracing into our portfolio strategy moving forward. Now, the four business line of Tech Foundations. I'm starting from the bottom. Hybrid Cloud & Infrastructure, EUR 2.1 billion, 40% of that revenue. Here you have all the managed services for everything inside the data center.
Sometimes it goes silent, but the network services that are becoming more and more critical to integrate all those workload across the cloud continuum, are hosted into that HCI business line. The mainframe services are also into that HCI business line. Laurent will give you more flavor about it later on. Digital Workplace, $1.2 billion, 21% of our revenue. Here we have been the leader for more than seven years now in some of the Magic Quadrant, to not name them. We have been keeping and staying ahead of the market, outgrowing the market. Here we are going to continue accelerating, investing into Digital Workplace. By the way, I'm pleased today to announce that we just got, I think I saw Mark Nouris, our Head of BTN.
We just got a fantastic renewal and extension of the Digital Workplace contract with the European Union for more than $100 million. Congratulations, Mark. Digital Business Platform. Digital Business Platform, this is the new incubator that we are managing with Alexa and the team, where here, what we decided to do is take those few solutions that have been platformized, the use cases we have in the sport industry or the use cases we have in the digital ID, those use cases, we have been putting them here, and we are ramping up new use cases as we progress. Not only, as sustainability is also close to my heart, and especially how digital could enable decarbonization, we are also relaunching our practice around decarbonization services inside the Digital Business Platform.
Last but not least, on top of our two main offering, we have that extended capacity for our customer that we call technological services, but now we are extending with advisory services as well, yeah? This is really a fast-growing business line. It's also a highly profitable business line, which is helping us in the mix of Tech Foundations. Now if we move to the right side, all of that needs to work together, especially when you look at the complexity of what our customer are facing in term of security, data protection, but as well, just management and just visibility, management of cost. Here we are developing with our CTO, Adil, who is in the room. We are developing that technology, TF orchestration and management platform, to be able to bring together those services for our customer.
All of that is repositioning us into a new addressable market. I mentioned it just before. We are moving now to that segment, which is growing between 3%- 5%, and you will see here why. Digital Business Platform, compared to last year, this is new. Last year, we were not going after that market. The technological services, we have extended that now with the advisory services, and Stéphane will tell you how he's putting in place that consulting part associated to it. On the HCI block, we added now finally, the Hybrid and Multi-Cloud Infrastructure, and some announcement that we made, including with AWS, are accelerating the adoption of that framework for all of us. Really excited now that we are back into a growing market or growing addressable market that the entire team could go after.
I'm using that cloud continuum. We thought we needed to put a visual to understand it. Atos, for many, many years, have been managing inside the data centers and have been developing expertise, know-how on how we manage the entire infrastructure on behalf of our customer. One thing we did not do well is when the hyperscaler comes, we have been resisting to them because we were seeing revenue leakage, margin leakage. We tried some partnership before, but without really adopting it fully. Here, what I wanted and what we wanted with the team is we identified a volume of workloads that we are managing, which was going to the public cloud or several public cloud. We decided with Laura and the team, instead of playing defense, to play offense.
We went in front of our customer, and we told them, in front of our hyperscaler, sorry, and we told them this, that book of business, that is going to move to a public cloud. You could do it with us, and then you could secure the level of revenue transformation for you, or you could do it without us, and then we'll see. Some of the hyperscaler have been reacting. We have been working with them, and thanks to that, we signed that Cloud Catalyst contract, which help us now being the preferred outsourcer for AWS and then becoming our preferred public cloud partner. Thanuja will come on that point just after.
The point of the cloud continuum was really now to extend our managed services and to be able to embrace the entire diversity of the IT footprint of our customer, and that's what Laura will explain just after. Maybe, Thanuja. That story started, in fact, almost one year ago, when we started working with Laura on how we could materialize a stronger partnership with the hyperscaler and not just being victim of the move to the cloud. Here, the work has been immense with the team, because in nine months we came to a contract, and I feel it was a much more balanced contract. My issue, when workload go to the cloud, I'm getting data center sub-utilized, and I'm getting people not really skilled for the next wave.
What we tackled heads-on with AWS was: "Look, we help you migrate in some of the workload to your platform. In exchange, you leverage our infrastructure to make sure that we don't stay with the underutilized assets. And on top of that, you commit to train with us more than 20,000 employee certification for Atos." That has started pretty well. We name it now Cloud Catalyst, and I think Thanuja will be best to say some few word about it.
I'm Thanuja Randery. I'm VP and Managing Director of AWS across Europe, Middle East, and Africa. I'm really excited about the future of this 10-year Atos AWS alliance and the opportunity we have ahead with Atos CloudCatalyst. Together, and I was very lucky to be involved in this process, we signed an industry-first five-year strategic transformation agreement between Atos and AWS in November 2022, and that was announced at re:Invent, and we had Nourdine on stage along with Ruba Borno on our side, announcing that partnership. This saw us committing to migrating more than 800 existing managed infrastructure services customer workloads to AWS, and at the same time, address the issue of digital skills by upskilling 6,000 of the Atos workforce onto AWS. Together, Atos and AWS, we are really turning the ITO, information technology outsourcing model, on its head with this strategic partnership.
Through the market-leading technology that Atos has to offer, and we have to offer, and our deep understanding of legacy infrastructure, working backwards from our customer needs, we have the experience needed to really de-risk cloud migration and modernization, and may I say, accelerate migrations as customers really seek to move from on-premise to cloud environments. Both to take advantage of the cost efficiency that drives, but also to really leverage the power of the cloud in terms of innovation and driving growth, and of course, addressing key sustainability challenges. Atos is already proactively consulting with its managed infrastructure services customers, spanning the globe and offering hybrid cloud service portfolios.
Alongside us, we can really accelerate leveraging CloudCatalyst by providing technical and commercial advisory services, which our customers require, because they don't always have the expertise, bringing digital engineering expertise, and of course, our deep cloud expertise and AI and ML expertise to these customers to help them understand the migration journey, the benefits from moving from on-premise data center services to cloud models. Of course, our partnership goes further.
Together, we are building value propositions beyond the migration of IT outsourcing contracts under the umbrella of the Atos CloudCatalyst brand, including, and importantly, mainframe modernization, control cloud and compliance as a service, and of course, generative AI. Through this collaboration, Atos customers will be able to realize the benefits of moving to the cloud, including reducing our operating costs, carbon emissions, as well as really adding agility and scalability and accelerated innovation. Really looking forward to this next chapter of the alliance with Atos and accelerating customer value together. Thank you so much for having me here today.
Now, taking a step back, and looking at that Digital Business Platform, that new market segment that we are going after. Two main area, the key vertical solution. To the opposite of the previous program that some of you heard about Spring, we are not trying to be everything for everybody. Here we are targeting concrete use cases, concrete platform that we already have, already developed, and we are able to replicate. Maybe the most important one is the one we have been developing for many years and improving, is the one for the Olympics and Paralympics, where we have been delivering services of broadcasting accreditation to the entire Olympics game.
Thanks to that platform, we have been able to bring it in front of UEFA, the Soccer League, the European Soccer League, and you will get more news about it later on with Clay. We have been able to replicate that business case with other customers. Here we are going to continue investing on those use cases which are already specialized and are generating the right level of profitability and value created for our customer. Not only, we are also pretty strong with the digital ID, with citizen ID, in fact. We have been developing in U.K., in France, those citizen ID solution, and now we are exporting them to country like Morocco, the Kingdom of Morocco, with Bérénice, where here we are digitalizing all the Moroccan citizenship. I think we are in the rollout.
We are almost at 10 million, the rest is coming. We are doing that also, we announced it a few weeks ago, we won it in Togo, and we are going to do it for the entire Republic of Togo. Again, we are going here just to focus on some use cases, which are platforms that we're able to replicate day in, day out with our customer. Then the other part is sustainability. Sustainability why? Because digital is a cost in term of CO2 emissions, so we have to contain our emission in our services. Here, Atos has been really advancing in the pack.
We have been the first one launching in the industry, what we call the DLA, Decarbonization Level Agreement, which next to our SLA in our large contract, we are committing in reducing our carbon emission from the beginning to the end. Not only, we are also improving our footprint and now bringing that expertise over the last years that we developed in managing carbon emission, especially Scope one, Scope two, now bringing it to our customer and bringing it through different level. There is a platform topic, MyCO2Compass, Laura will mention about it, but not only. We are not only helping the customer to monitor their carbon emission, but also to optimize it, thanks to digital solution.
Those two main legs of the Digital Business Platform will be the one helping us and giving us the right to go and win into that new market for us. Now, the commercial momentum, I will say today, has stabilized. You have seen quarter after quarter, we have been improving versus previous years, and we continue improving even in Q2 this year. However, we are not yet there yet, and I will not stop, and the team knows that. I think I saw Julien. I will not stop until we get to the 100%. Clay has been appointed as the new Chief Growth Officer, and under Clay, we decided now to accelerate our transformation and streamline our processes. He will deep dive what we are launching from a sales perspective to accelerate that recovery of the book-to-bill.
Again, I don't want to give you a book-to-bill to give you a book-to-bill. In the past, we signed bad deal, so we will still stay vigilant and have a high selectivity on what we want to book or what we cannot book. It's really important because at the end of the day, I could give you 100% book-to-bill, but if the level of project margin is not the right one, we are back to square zero, and here Clay will explain you how we are putting in place the right discipline, the right control, to avoid falling into that trap again. It's improving, but more to do. Now, we talk about that disruptive megatrend, GenAI, which is coming. It's already there. In fact, it's already there. We see two world where GenAI is impacting us.
Obviously, internally, in our processes, how could we optimize what is happening? What we see there is process like proposal writing. The team today is spending, for an average deal of, let's say, 50 million TCV, is spending around 400 man days, all kind of man days in the group to create that. We saw by feeding the GenAI platform with the last five-year proposal, tuning them, we have been able to reduce that average time to 60- 70 man days. That's an impact directly in the way we are processing our proposal to our customer. Another area will be procurement. Procurement will need much more intelligence on our spend, but also the RFP generation, the PO generation. Here the team are launching the pilot as well there.
Support function, if I think about the marketing, the marketing intelligence, GenAI will be a fantastic enabler to our marketing team to accelerate the output and the time to information. That's on the internal side, but on the external side, we see GenAI is impacting our portfolio. Leon, Laurent will come back on that, how they are integrating GenAI in the portfolio of the BL. You will see, for example, in Digital Workplace, think about our agent or our technician having a Copilot, which is connected, which is much more context aware of the environment. Is it an infrastructure environment or is it an end-user environment? Having a Copilot connected to the right data source, internally and externally, could accelerate the time and the time for resolution and the time and the satisfactions. GenAI is already in place.
We call that internally the mushrooms, the way we are dealing with it. All those mushrooms that we are monitoring and developing are being controlled under the right guidelines. Adil, our CTO, have launched the right GenAI guideline across the group to make sure that all of that is done with the right level of safety and consciousness. In the key, why GenAI will, in fact, help us, even in that segment, even in that trajectory, which I did not fully translate the impact yet into it. We see those mega trend in GenAI, a vertical integration, more and more domain-specific solution, GenAI-based, which are increasing the level of resources in public cloud. Also we see the proprietary data set as a differentiator.
More and more GenAI will be more relevant with the right data set behind it, which will generate still more demand for storage, infrastructure, and managed services. All of that is contributing, that GenAI wave is contributing to what we are doing at the core of Atos and what we are doing at the core of Tech Foundations. We see even one step further, looking at our portfolio. Today, we are talking about GenAI prompt to human, but everybody is working on the GenAI project, and we will need to start federating those machine-to-machine interaction, those GenAI to GenAI interaction. We believe here is a business model to be found and to position Tech Foundations into it. More to come.
Enhancing the delivery, I mentioned it, but the reality is we will see a pyramid shift happening, and I'm saying that to the team. I think the first wave of GenAI, we almost totally swapped all the junior analysts in our pyramid, whatever functions. Here we need to integrate it, understand it, and put it in our plan, and that's what the team are doing. I gave them the target by the end of the year to come back, each of them, with the assessment of the true impact of GenAI internally and in their portfolio. I'm finishing with maybe talent. Just wanted to say this is not just a one-man show obviously, this is a team behind it. You have some of them in the room. It's a diverse team.
It's an international team, which is around me, and we have been working in that industry for many, many years. You will see new blood coming in as well, because we will continue progressing, evolving as a team. Just would like to take that moment to thank them, thank them for their commitment, thank them for their belief in the story of the recovery of Tech Foundations, and we will do even more moving forward. On the talent strategy, you remember last year, we were talking mostly about offshore juniorization. Atos is behind in offshore. Tech Foundations is behind in offshore. Whatever waves are coming in front of us, we will have to tackle offshore. We are doubling. We are targeting to double our footprint in offshore in the next three years, yeah, and we are on track of doing it.
That will happen, and that's the, I would say, the traditional level. As we mentioned before, GenAI will impact that talent strategy. If we think about the pyramid and the impact into our pyramid, we'll have to adjust our resourcing plan, our workforce management, and bring more people with GenAI skill but as well, developing those new skill. We will streamline the support functions. I mentioned it. The rough estimate here we are thinking about is almost 6,000 role will be impacted by 2026 by GenAI into Tech Foundations, okay. Because the talent world is still there, we are opening more and more new platform to aggregate more talent around Tech Foundations, and you will see in the people strategy how we are addressing that.
Last but not least, we have been leading the market and the industry in our commitment to ESG. Moving forward, Tech Foundations will continue with a really strong commitment in reducing our CO2 emission. I cannot give you a target here today. We are not formally split, but I could give you the commitment, the personal commitment, that we are going to continue leading the pack here, and we have been doing it.
You will see more commitment to non-global profit, including inclusion, accessibility, and diversity. We have still a lot of work as well to do on that path, and obviously, the governance moving forward as we split. Based on that, I just wanted to share with you a high-level view of the path, the output, and I think we will go with Clay explaining and presenting you how we are restructuring our entire go-to market, and then after that, the business line. Clay?
Hello, everyone. Good morning. I'm Clay Van Doren, and I've got the best job in the company. My job is focused on, with the team, thriving as creating a sustainable, self-generating commercial platform that's gonna drive the engine around Rebound. Having spent the last six years running regional PNLs, I have the background that what we need to do and where we need to take it. In each case, so whether it was in Northern Europe or the U.K. or in Central Europe, we had a revenue problem, right? We also had a profit challenge, so we had to make sure we went and delivered profitable revenue. We came up with a plan, and what I'm going to talk you through is how we've now extended that plan to make it a global plan for all of Tech Foundations.
I'm clear that there's three core elements to the job, right? We have to delight our customers such that they re-sign with us and they buy more business with us, and we'll talk through that. We also need to win more large deals. We've already made some progress on that, and we'll go through that, but we still need to step it up another level to drive the commercial activity we need. We need to create the sales vehicles to support the new offerings. Many of those will be sold differently than what we do today, and so we have to be ready for that. Why am I excited? First of all, we've got a tailored, more focused portfolio. Gone are the years of trying to sell 20, 30 things through one sales channel, right?
We've got three, four, five key offerings that we can go and drive the business on. Second of all, we've simplified our sales process and put it all in one domain, aligned against the business outcomes we're trying to achieve. I'll walk you through that. We're also investing in it, right? We're refreshing the team, we're refreshing the process, all to go make it happen. Finally, we have a great customer base and reference ability to build on. Our customers like us. They want to buy business from us. As we've gone around and we've talked about separation, there's only two customers that have really asked for something in return for the separation. That's just a really positive sign about the relationships that Atos and Eviden have with their customers.
Okay, last year, and as part of Rebound, we identified we're going to do five things, right? The first thing is, we're going to drive revenue retention, and we've made significant progress. Our retention rate has increased from 81%- 91% in the last 12 months. We've said we're going to have to add on revenues, and we've delivered more than $600 million of add-on revenues over those last 12-month period. We said we're going to have to win more large deals. We're going to have to originate more large deals, but win them, and we're up 2x the number that we were the prior period, and you'll see we've got an enriched pipeline, so we should do even better going forward. We have to scale our alliances.
We are behind the competition in terms of the use of alliances and partners to go drive additional profitable business. We talked a little bit about AWS, but we got more than $750 million of what I call attached pipeline with partners, with customers. Finally, we need to go and drive new offerings. We've already closed more than 11 new customers in the new offerings, including UEFA. But interestingly, if you look across those customers, they're all buying something slightly different, but all tied to the new offerings, and we have more than $500 million of pipeline associated with those new offerings. We see those five tenets as still remaining relevant. Those are the five tenets we have going forward, and we've made progress on them in this year. How does that translate it into our numbers?
You've seen some of this with Nourdine earlier. We are seeing an improvement on book to bill. It's not the only measure, but we are seeing an improvement on book to bill, quarter-on-quarter, right? Adjusted for the seasonality that we face. We have stabilized the revenue earlier, but probably most importantly, the pipeline. In 2021, we had a pipeline that really wasn't appropriate for the business, and we did a pretty big clean out. Since then, we've gone and we've drived and looked at new opportunities that are available to us, and we've increased our new logo, large deal pipeline, by almost 2.5x. If I were to look forward, our number one thing that we really got to track is this pipeline.
This pipeline allows us to pick the better deals, right, that are more suited to us with the higher profits that leverage our industrialized offerings, so we deliver for the customer right first time. This pipeline is really central to what we need to do going forward. There's six things that we need to deliver to deliver those five things. I'm not going to talk through them in great detail here 'cause I'm gonna go through them one by one, but just to highlight them. We've created a sales organization, as Nordine highlighted, but what you'll see is each element of the sales organization is responsible for one core element of the, of those tenants. No longer are we in a position where the allocation of the responsibility is across 30 people.
Second thing is we've invested in business development, and we'll talk about that, also engaging with advisors, and we've invested also in our large deals team. We've taken a holistic approach against our top 100 accounts. We've gone against all those accounts, and we'll show you what we've done against them specifically to be able to drive greater satisfaction with the customers while we drive additional profitable margin and revenue. We've taken a proactive stance on our customers. We've looked at the top 100, and we've identified 10 in particular, where there's something disruptive that's happening in the marketplace, and we've taken a very proactive plan against those 10, and we'll walk through an example of that.
We've already heard about scaling the alliances with the hyperscalers, but also with more of our traditional providers, like Dell, but also some of our next gen providers, like Nexthink, in terms of generating some more pipeline that adds real value for us. It doesn't one size doesn't fit all. Our geographies are different. We have different customer bases and different reference ability inside each of those customer bases and different opportunities. We've had to tailor our strategy against them. Starting with the office and the setup, and I'll spend a bit more time on this because it's probably one of the most important things. We've created a geo sales organization that focuses on deals less than $30 million.
This organization runs the process with the regional lead, so with the likes of Bérénice and Rul and others that are in the room. We designed things to have local proximity, but specifically inside that, the sales agents and account executives, they're no longer responsible for large deal generation. They're no longer responsible for creating their own propositions. What they're responsible for is satisfying the customer, and each of them delivering $10 million more of profitable revenue every year. Really focused on that and the cash and margin that goes with it.
To support them in that, we've taken a little bit of our large deal focus, and we've created deal pods in each region with an engagement director, and a bid manager, and they roll deal to deal to deal so that they are familiar with each other as well as with the market. This is how we're gonna drive our cross-sell, upsell, and this is also how we're going to drive some of the retention activities. We've taken our large deals, and we've separated it. There's two core elements to it. There's origination, and then there's the execution. What's different here is we turned around and made some investments, so we've added 40 people on the large deals team, and we've added 50 large deal solution architects.
Specifically, these individuals are no longer paid on, primarily on, basically a seven-year deal, which was our average year. What we're now focusing them on is they're paid on what happens on the deal in the first two-three years, looking at cash and margin to make sure that they're focused on what's driving right business for Atos as well as right business for the customers. That's a pretty fundamental shift on how they're focused and what they're paid on. We've looked at it and said, the alliances and partnerships are a bit different, right? It's a key source of origination and customer satisfaction. We put this under one of our most experienced sales individuals, Patrick Adiba.
We've got 30 individuals that are just focused on the alliances and partnerships, how do we create business with them? We'll go through more how that happens, but you can already see that we've generated more than $750 million in the pipeline from a ground still, right, over the last 12 months. Also, core to this is our relationship with Eviden. Eviden is an absolutely strategic partner for us all the way through our deliveries, and we also run this through the same channel to make sure that we get the best out of Eviden as we go to market with our customers.
Finally, we've looked at new offerings, and we realized some of the things, including partnerships with Eviden, like, full stack development, like, ESG, but also in terms of cyber, that our sales process as we had it, wasn't gonna work. We've created pods and teams that specifically focus on that, and we rotate them from opportunity to opportunity, but the teams are a composition, so they're a composition of third-party providers, they're a composition of Eviden, and they're a composition of Atos experts. We roll them in when the opportunity presents itself so that we can get that additional sell and generate the pipeline. Now, going through each one in step. If we look at large business developments, you can see we have made progress on origination.
Again, origination is so central to us because it allows us to be more selective in the deals that we pursue. Right? We made an investment, and we did a bunch of work around territory planning with all of our leads in the geographies, and that's generated a nice pipeline. However, we're missing a trick. We need to do better with the advisors, and so we've already turned around with the likes of ISG, Gartner, and so forth. We double our pipeline that they're leading, right? In terms of a selection process. We've also made an investment in business developers, and I think as far as I know, it's the first global infra business development team. We've added 30 people in there, and their job is to find qualified deals as well.
Their job is not to execute those large deals. We hand that to another part of Julien's team, Julien in the room, who do the execution. In terms of execution, now that we have that pipeline, we got to go deliver on the pipeline. We've made a big investment in refresh in terms of our large deal teams, but we've also tried to standardize the teams. We have the teams now that are encapsulated with a large deal executive, with a solution architect, and with a bid manager, that same three individuals roll deal to deal to deal to deal, 'cause they now are familiar with each other. Why would we reassemble them each time like we used to?
We've also made a big investment in the business line solution architects, because we need them at the very early stages to qualify the deal. If I were to look back and look back 12 months, probably one of the challenges we had with our win rate, but also with the quality that we were pulling through, was because we were involving the business lines too late in the process, therefore, we weren't designing the deal in the most optimal way for our delivery vehicle, which in turn, would be the most optimal way for our customer. I talked about the incentives. Because we're driving win rate here, we're really paying out on the first three years of each deal to make sure we're delivering the right cash and margin and revenue, but also the right results for the customer.
In terms of our cross-sell, up-sell, this is our add-on revenues. The opportunity is rich, right? If you look at it, more than 75% of our top 100 customers only buy 25% of their IT spend through us, and 19% of them only buy one solution. We have all sorts of cross-sell, up-sell opportunities for us inside those customers. Okay, it's great. We have an opportunity, what are we gonna do with that opportunity? We've taken a very systematic approach. For me, sales is delivery, right? We're setting ourselves up to deliver this. We've gone through those top 100 customers and said, "What are their business challenges?" One by one, right? Systemically, across the estate, focusing on their customer's customer, and that generated a list of opportunities.
Independent of that, we've taken all of our offerings, and then we then mapped it on top of that. You'll find, you know, some nice hotspots of opportunities where we have something that very much well represents what they're interested in. There's other areas where you get a dark blue, where there's an opportunity for us to either bring someone in or we just decide, guess what? This opportunity isn't suitable for us. On the back of that, we've brought in some third-party databases and integrated that using AI to also overlay another set of opportunities.
That has created a heat map by customer for the top 100 customers. We're now pursuing that with the sales organization, the geo sales, one by one, to go and pursue those opportunities. That will generate some additional pipeline and some additional wins, particularly in the add-on business. As I said before, the incentives have changed. Now, these individuals are really focused on revenue and margin in the first two years versus focusing on the out-year revenue margin. One approach, just to bring this to life, and it really embodies Atos in my mind, is a global utility company where we provide Digital Workplace services. Inside that global utility, we were very well thought of to begin with. However, some of the services that were around us weren't working optimally.
Even though our CSAT was good and even though we were hitting all our SLAs, we went back to the customer and said: What else can we do? We think here's some things we can do to help you on the edges. They embodied that. Our CSAT went up to 95%. We started talking to them about their business challenges, no longer IT challenges, so things like remote substation activity, unmanned lines, proactive interference and problems on their cabling. We went through that one by one.
We brought in some of our industry experts, also brought some in from the outside, and on the back of that generated a whole set of opportunities, mostly in the advisory and the professional services, but did include things around AI, you know, such as being able to do remote monitoring, be able to do hydrogen simulation for geographies. They thought of us in a completely different light, right? No longer were we this, we're now this, right? As a result, you can see what's happened to our revenue stream, and the customer would tell you the value creation is even more has grown even stronger than the revenue stream.
One example of the new business offerings we talked about, building on the work that we've done with LOCOG and other entertainment environments, is the new deal that we recently did with UEFA, which I think also sets the precedent for all other entertainment environments. It's something where there is a bit of a closed ecosystem. There are special things that you do around certification. There are special things you do about broadcasting. We've done this in smaller scale with a number of broadcasters. We now see this as a major opportunity that we can take forward with the likes of UEFA, but also there are other customers that are in the entertainment industry that is equally applicable. We thought, rather than, for me to talk through this opportunity and what's actually happened, it'd be great to hear from the customer.
UEFA has been looking for a strong technological partner able to sponsor UEFA's flagship national team competitions, while bringing a solid expertise in the technology field. We recently signed an eight-year partnership that will help our organization overcome some of our technological challenges. Our organization is, as you know, one of the main actors of the sport and event organization world, with thousands of matches per year and hundreds of events around Europe. To support this delivery, our ICT department is structured to operate and deliver technological solutions to our main client, this one being the football family, our fans, and the organization itself. Objective of this change is to reduce operational costs, improve efficiency, but also to increase access to specialized IT skills and expertise, grow innovation, but also accelerate our transformation.
We are at the premise of this incredible adventure, where we started to build a joint team together with Atos, in order that they can perform a discovery of each of the services that are in their scope. Some key events are coming up. UEFA EURO 2024, not to mention it, where Atos is starting the delivery of important milestones. This goes from accreditation solutions to guest management platforms and some data-driven initiatives, where the expertise of our Atos colleagues will definitely help us bring high-end products to our clients. Thank you, have a nice day.
You can hear in that particular circumstance, even the connection with what's going on in Morocco and Togo, right? The digital identity rolling, right, as a new proposition from location to location. Shifting again a bit. Looking at retention. I talked about how we took the top 100 accounts, and we looked for disruption. Not necessarily disruption for Atos, but actually disruption for the customer. We went through and said, against those top 100 accounts, are there 10 or so customers where we could do something different? What we found in those customers was there was a disruption or there was an issue. Most often it wasn't directly associated with Atos, but we tried to step in. This example with the logistics customer, I think, kind of brings it to life.
This was a long-standing customer, similar to the utility at one level or another. Our CSAT was high. We had two years left on the deal. Why would you mess with it? The real truth is that the customer was having challenges. They're having challenges in the app space that was sitting on our infrastructure, and we thought there's something we could do. There was a trepidation about transformation and change because many of the apps had been in place a long time, so what is it that we could do to help them? We talked about there's three things that we can do, we think that'll stabilize it, right? The first and most of them were: How do we get the apps out, right?
The current apps that are having the challenges, how do we do it in a structured and helpful way? First, we actually, with Eviden, we brought in some apps refactoring. How can we refactor a set of apps and move a set of the apps to the public cloud and do it in a controlled fashion? The second thing is, there's a set of SaaS services now in the logistics space we need to get them there, we got to get the data there. We showed them how we could migrate the data out of their current app structure into a set of SaaS services.
That left a set of apps that weren't going to migrate and weren't applicable to SaaS, and so we showed them how we could give them a next-generation private cloud platform that would allow them to go and provide that service, but now they would have the elasticity, the benefits, the real-time provisioning that they would have effectively on a cloud platform, on a private cloud platform. We showed them an orchestration tool, but it's really a service management tool, right, called Bridge, which Laurent will talk about later, that could provide them the provisioning and the managements and the integration across all those forms. If we look at AWS, right, and shifting to our partners, one example, right, is what we've done in AWS, and you can see the pace that we've already generated.
In less than 12 months, $500 million of pipeline, three customers that are out there, and another one that's in pilot. Where we see we're going to be in another 12 months with the support of Tunisia and so forth, is we'll be at $1 billion of pipeline, and we'll have 17 customers that will be in some form of migration. If you look at our past, this is all additive revenue and profit, right? This wouldn't be part of our historical stream at all. Now, I won't go through each one of these geographies, but each geography is a bit different, and it is important because working with the regional sales directors, right, the likes of Mark and Eric and Nick, but also with the regional heads, so the Bérénices, the Christians, and the Rauls.
We've got a tailored approach by each geography based on our presence in that geography and what we're seeing from a demand perspective. If I just grab a couple of them, if we look at France, you'll hear more from Stéphane later about our active TS business and now TS and advisory business in France. We'll continue to grow that. We've actually seen quite a bit of opportunities come to the market around Digital Workplace and operational backbone, so the HCL business, including a surprising number of first-time outsourcings. We're going to go pursue those large deals, and we've already announced, we've already won two in that space, and there's more to come. By contrast, if we look at Germany, it's a bit of a different strategy.
Germany, we have a number of large customers, and we will cross-sell, upsell those services. If you remember the top 100 approach we have with the heat map, we'll go and execute that. Beyond that, we see a real mark, a real opportunity in the mid-market. Germany has quite a few of mid-sized public sector entities, right. I don't want to say businesses, but they're not businesses. Also quite a few manufacturing companies, mid-sized manufacturers. We've got an end-to-end process from sales to delivery that's a much lower overhead to go and serve that customer set, and we're winning with them because of that and because of the service that we provide. We will continue to press and double down on that in Germany.
That's a little bit of a difference that we're gonna roll out by geography. Finally, as part of creating the self-regenerating, sustained commercial activity, which, for which I'm responsible, right. There's three commitments that are inside that are part of the rebound and part of the new outlook. Our book-to-bill will improve, right. We'll be up to 100%-110%. The most important thing is the quality of it inside there, though. The number is less important than the quality of the revenue that brings the quality of the margin and the cash. We talked about our revenue, right. Before we were at stabilized. Now, as we head into 2026, we're talking about 2% growth or more.
Also, if we look at what's gonna drive some of the additional value and value creation, it is from the new offerings. We're less than 5% today in terms of our revenue stream, and we're looking at being greater than 8% during the, you know, between now and 2026. I'm really excited about this opportunity. I'm really clear what we need to do, and we're on path, but we have a whole lot more work to do. Thank you.
Good morning. I am Laurent Barbet. I am the COO of Tech Foundations. I am also the head of the Hybrid Cloud and Infrastructure business line. 20 years ago, I was a customer. I decided to join this company to manage data center services in France. Since then, I've been taking over many positions, always related to infrastructure, business unit management, and performance improvement. I'm really excited today to manage the hybrid cloud and infrastructure business of Tech Foundations. As a starting point, I would like to go to a few key messages I would like you to take away from this session. Number one, HCNI is not focusing only on core infrastructure. We are addressing the entire infrastructure continuum that is including hybrid multi-cloud.
This hybrid multi-cloud segment is growing 10%-12%, and that's why the market we are addressing overall is 40% bigger than the one that was presented to you 1 year ago. We are going to stabilize our revenue from 2024 onwards because of the growth of this new segment. We are credible, we have the right to win on this segment because of our long track record on infrastructure management, and because we have built a team of experts of hybrid and multi-cloud, a team of experts that are recognized on the cloud market. Brooks Borcherding and Eric Terrell, formerly CEO and COO of Cloudreach, are now part of the team of Tech Foundations at CNI.
The partnership with AWS is creating a huge momentum in our hybrid cloud portfolio, and we see the pipeline growing week over week, not only on existing customers that we propose to migrate, but also on new deals. Last key point, we are working on our margin improvement, addressing the cost optimization of the different spend categories, but also benefiting from the higher margin on the cloud services, and also benefiting from a more asset-like business coming from the cloud. I strongly believe we are on the right track to stabilize and turn around the HCNI business.
Going a little bit more into the market, you see, and it may have been a surprise for you, that as the addressable market is going to grow annually by 3%-5%, mainly coming from the growth of hybrid multi-cloud, but not all of our customers, basically 80% of them, are not going to move to the public cloud fully and very fast. The consequence is that hybrid will be the norm. The core infrastructure segment will be quite resilient, and we see a slight growth on private cloud. The core services are not going to decrease that much. Number two, 47% of our customers will have two or three cloud providers, which are coming on top of the other segments. The IT landscape of the customer is going to be complex and also highly demanding in term of compliance and security.
Our customers will need a partner to manage this complexity end to end. We believe we are in a very well position to do it. If we deep dive a little bit more into the infrastructure continuum, basically coming back to what Nordin presented earlier, you see that to deliver those services, you need to master more than 10 key building blocks. Traditional infrastructure, we have 20 years of very solid track record here. Private cloud, 10 years of private cloud, fifth generation of Atos products that we are delivering on a private cloud. Hybrid cloud, Clay mentioned it before, we have already seen many successes in combination with Eviden to migrate some of our key customers to the hybrid cloud. We are investing in sovereign cloud, trying to find the right balance between sovereignty and cost to glue all those services together.
We have already reshaped our network portfolio, and because we are used to manage, I would say, on-site services and somewhere fragmented landscape, we are ready to expand to the management of Edge. On top, we master the processes to deliver the service, the service management processes. We have the skills in service orchestration, and we have the tooling platform to aggregate all that. Nourdine positioned HCNI as a managed services provider across the cloud continuum. HCNI has the right portfolio and expertise to make it happen. We have the right portfolio, but we have also a set of differentiating capabilities, starting by being a global leader with roots in Europe. We have a very solid data center footprint, you know, in Europe, but not only, also in the U.S. and in APAC. We have rationalized this data center footprint significantly in the past years.
In the past 10 years, we have closed more than 100 data centers. We have very solid expertise to rationalize data centers. Those data centers are an asset, you know, to develop and to be able to get sovereign services in place. We are used to manage shared platform. We have managing mainframe for long. You know, the mainframe business is organized around hubs. We have a hub where we run many customers in Europe, we have one in the U.S., we have one in APAC. That's the model that we are going to replicate in the future with the platformization of the entire business. That's really something that we can leverage on.
We have a significant set, I would say, of low-cost delivery centers, India, Central Europe, with Poland and Romania, Mexico and Africa, that we are now developing, starting with Egypt. Our deep expertise on this market is well recognized. Number one, we are in the magic quadrant of Gartner for 10 years in Europe, for five years in North America. We have deployed our 5th generation of private cloud, and we are used to manage critical operation in highly regulated businesses, and in particular in the public sector in Europe. We have an ecosystem of partners that we are working with, more traditional partners like Dell, where we are Black Titanium certified, but mainly and also the hyperscaler, AWS, Nourdine talked about it. I will come back to it later, but also IBM on mainframe. We are delivering low carbon services.
We have a strong expertise in improving the PUE, so the poor utilization effectiveness of the data center, basically reducing the waste of energy because of cooling. We have developed expertise in optimization of the IT consumption of the IT workload itself. Last but not least, we are managing for long tooling platform and this multi-service control center that will somewhere manage the entire infrastructure continuum, and I will come back a little bit more in details later, is also something we are used to manage for long. The combination of those five points are making us unique against our competitors. What's the plan of HCII? Starting point was a rapidly declining revenue. If you look at the 2021, the revenue was declining more than 5%. Key reasons was, number one, scope attrition and customer attrition.
In the contract, we were managing, you know, certain part of the volume was moving to the cloud, and we were not able to retain it. We were losing customers. The sales engines was weak and the pipeline was low, and we were lacking a very strong cloud offering as the market was moving to cloud. Since we started the transformation in H2 2022, we have been able to significantly reduce to below 5% the decline of the revenue. Number one, streamlining the portfolio, eliminating the offerings that were not meaningful anymore, and starting to reshape the rest. Rebooting the sales engine, so that's what Clay presented before, but also focusing on delivery-led fertilization, selling more project to the existing customers because it was initiated by the delivery.
Building teams, specialized teams, squads of experts, to support our high priority offering, like for sure, cloud, but also mainframe. What's the way forward? We plan to stabilize the revenue from 2024 onwards with two category of key action. Number one, the go-to market, and I'm not going to repeat what Clay explained before, which is a key contribution to HCNI, but also working on our portfolio and teams. On the portfolio side, I think the, one of the most important topic is a partnership with AWS, because we did need to completely change the approach, moving from a defensive approach on the cloud migration to an offensive one, and to join forces with AWS to propose plans, action, migration, transformation to the customers.
Number two, we are going to also reshape our delivery organization, not only to optimize the cost, for sure, it's one of the component, but also to bring the right skills to deliver the new portfolio. New people are joining the organization, but there is a significant training and reskilling program, which is the second leg of our partnership with AWS. We are training and reskilling and educating significant part of the HCI team to the AWS portfolio, to the migration to cloud, to the management of the new infrastructure continuum. Also on core infrastructure, we have many academies, like the Mainframe Academy, where we are training young people to manage those legacy traditional technology that are going to last for long and to continue to generate revenue to us.
Last point, we are developing new things, reshaping the cloud, the network, portfolio to develop services, software-defined LAN, that is already quite successful on the market with our customers, but also, sovereign cloud and edge. We believe we are in a compelling position to take full advantage of the momentum and to be one of the leaders shaping the market. To go a little bit deeper in what we change in our portfolio. Number one, on hybrid cloud, we are moving from a kind of one flavor, private cloud solution, which was the only one VMware that we had, to a true hybrid cloud solution, where we are proposing the same technology on-premise and in the cloud to make sure we have a full fluidity of the workload between both. We are proposing three flavors: VMware, AWS, Azure.
Number two, we are consolidating all the teams that were doing cloud migration into the cloud migration factory. We are industrializing the approach, leveraging your existing building blocks we have already. On mainframe, we are repositioning our mainframe in the cloud ecosystem. As Clay mentioned before, more and more customers want to migrate their workload to the cloud. It's complex to migrate the mainframe application to the cloud, and you have usually latency problems. You need to build new mainframe hubs close to the hyperscaler and give to the customers the opportunity to migrate to the cloud at pace, while you are delivering to them a kind of variable workload on the mainframe to somewhere help them reducing, you know, their consumption as the workload is going down. That's how we are changing and reshaping our mainframe offering.
On the more traditional infrastructure, we are also transforming them to move to hyperconverge and to provide to the customer an experience which is as close as possible to the cloud, automation, service catalog, and so on. It's not the cloud, it's not as much standardized as the cloud, but it is somewhere similar to the cloud in term of experience. As mentioned already, we have completely reshaped the network portfolio to be fully software-defined. Last but not least, we are enhancing our Bridge offering, which is our service integration, orchestration offering, which is growing somewhere. All the pieces together, we are extending it to the cloud. Just to come back on this Bridge offering and this service integration and orchestration, I would like to explain how we are creating value to the customers on top of the hyperscalers.
Number one, we need to provide to the customer visibility on the entire IT landscape, wherever it comes from, core infrastructure, private cloud, public cloud, XYZ. This observability function to show them what is working, what is the performance of their infrastructure, how the application are behaving up to the business processes across the different technology stack, is something that you cannot get from the hyperscalers at all, even if you are fully in the public cloud. This observability layer, that is including also security and compliance to security policy, is a key value that we are proposing on top. Number two, we need to manage the operation in the cloud, especially if you do lift and shift.
You are just moving the workload to the cloud, and on top of the operating system, all the work to manage the component and the application has to be done. We are doing it, and we are doing it in an automated way, leveraging automation, AI, and soon, Generative AI. Last but not least, we need to manage the cost of the infrastructure, and we know that optimizing the cost in the cloud is a point of attention. FinOps and making sure that we have the right policies in place, the right workload on the right technology stack, is extremely key and is really value that integrators like Atos can provide to our customers.
This platform that we are using to manage, to aggregate the data and to manage, you know, the end-to-end scope, is made of building blocks that we already have, by the way, is made of tools that are provided by our partners, including the hyperscalers, but also made of Atos IP, components that we have developed internally. I would like probably to mention three of them only. The first one is Itrion, where we check the compliance to the security policies, and we automatically remediate the vulnerability. That's something that's not existing as such on the market. The second one is MyCO2Compass, where we track, you know, the energy consumption of the entire infrastructure to be able to provide to the customer visibility on their CO2 footprint.
Again, that is a, Atos product that we have developed, and that is Tech Foundations. Last point, very important one, is Generative AI. I would say is we have already a lot of AI, which is much more categorizing the events and correlating things and so on. We'll move to the next step, which is to use Generative AI, and trying to do two things, mainly. The first one is to significantly improve the incident resolution. On top of the 30%-35% of incidents, we are fully automatically remediating today. We are going to get access to the entire knowledge base, I would say, of the market, to help our engineers resolving faster the incident.
We know that in this kind of business, finding a case, you know, that a similar case that happened before, or the right knowledge item in the documentation of provider XYZ, to address the case you are trying to fix, is extremely important. We expect a huge breakthrough that is going to happen here. Number two, we are, as infrastructure managers, more and more coding, because infrastructure is code, and to get all the automation, operation, and so on, we are going to code.
We will have to educate many of our engineers to coding. Helping them through generative AI, autopilot, and so on, is going to make our life much more easier, and that's one of the major topics we are going to address in the overall generative AI plan in HCNI. As a conclusion, I would say that infrastructure is key to the digital world, and we are the ones that make it work. Thank you.
It's always very hard following Laurent, 'cause, A, I haven't got a French accent, and, B, I never feel as intelligent as Laurent, ever. Firstly, I introduce myself. I'm Leon Gilbert. I'm the head of the Global Digital Workplace business. I've been in this industry for 20+ years. I wasn't any taller when I actually joined the industry, but it's a whole different story. I started as a service desk agent way, way back when, which is ultimately the bottom of the pile of Digital Workplace, and I worked my way up through my career in multiple organizations, in multiple countries, and ultimately, I've ended up in the U.S., and I lead this wonderful team. It's 14,000 individuals globally.
Been at Atos since 2014, actually took a couple-year break, came back at the start of this year because I was so energized by what was happening within Tech Foundations and where we were taking this business with Nourdine's leadership. My kids often ask me: "What do you do for a living, Dad? What is Digital Workplace?" They use iPads all day. They have absolutely no idea what a service desk or a helpdesk is. They're like: "Why do you need to call someone to fix it? You know, you fix it yourself." It's kind of hard to explain to a 13-year-old kid what a helpdesk is. Ultimately, if we think about what Digital Workplace is in this industry, to me, it's the face of IT. It's the emergency service.
It's what most people think IT is in a business. Their experience of IT is often how they communicate with the person who comes to your desk, the person who you speak to on the phone, the person you chat with, the person who brings you a new PC and who makes you really happy. Really, that's what Digital Workplace is in a very, very simplified nutshell. Let me go on to a little bit about the industry. It's a pretty big market, $70 billion, I would say that's conservative in estimate. It's growing. It's growing to about $80 billion by 2026. We're pretty good at it, and we have been for a long time. It's growing in three core areas.
Primarily, I would say the largest area is in managed workplace services, and you see that on the right of the screen. Specifically around employee experience, there has been that shift, and Nadine and the team have spoken a little bit about the employee experience, the hybrid, so I won't go into too many of the trends because it'll be a little bit repetitive. One thing I see when I'm talking to clients is I don't just see the CTO, the CIO, turn up anymore. I actually see the business, and the business are there because they actually want the consumer-like experience. They want to see what they get in the consumer world, in the IT world. If I go back to what my kids expect when they start working, they expect it to just work. They expect you to be proactive.
They expect not to have to call somebody, not to have to wait for two days for something to be fixed. That is the big difference, that businesses are looking for Atos to actually come in there and bring that employee experience. You know, if we move from there to client device support, again, this is a growth area, not as fast as the one I just spoke about. Really, this covers around virtual desktop, your tech bars, et cetera. Growing, but not as exponentially. Lastly is the traditional end-user services, what we've always known workplace to be, that helpdesk that you would call or the helpless desk, or whose words. Ultimately, that's more stabilizing than growing.
While we have some clients in that space, we're looking to transform them to that next evolution of employee experience. Okay, I said we were pretty good at this, and you don't just have to believe me. For those in the room from some of these wonderful companies, you know, you can see it on the screen. Each five of these companies recognize us as a global leader in this space. You know, we're very proud of that. I see it a bit like a roll of honors. It's a bit like a sports team. You have all your awards up there. You got to the final, the semifinal. You know, I see this as a real beneficial for us, but actually it drives revenue. Why does it drive revenue opportunities?
Two things: Some clients choose to run their own RFIs, RFPs themselves. If you're a leader in the space, you get selected to go to those RFIs, RFPs. Secondly, the advisory side of these companies often will select the leaders in their quadrants, hence, the more we are seen as leaders in this space, the better. Really, I think lastly, these awards, you know, signify our commitment to delivery, our commitment to innovation, and our delivery execution. Okay, what differentiates us from other players in this market? I've told you we're a leader, you know, we are a global leader in this space, what differentiates us? I think there's six big things here, I'll start at one o'clock. We were the first to market with employee experience.
2015, 2016, I remember thinking about, you know, we've got to really change the game and become consumer-like in approach. We worked with Nexthink and various other companies to come up with this, how could we be proactive? Really, we became that market leaders, and people started to follow us, you know, which is great. You're doing something right, people follow you. Everyone knows in this room and globally, we are a European leader in this space, but actually in Digital Workplace, 50% of my revenue and my business actually comes from the U.S. market, and you'll see on the next slide some of those U.S. logos. Clearly, having a strong partnership network is key. Not trying to build everything yourself, choosing the right partner, but actually choosing a partner rather than a supplier.
For the last five months since I've returned, I've really focused the team and my team on, let's go and find the right partners to work with, not ones that we just pay money for, something where we get something in return. Choosing the right partnership network, crucial. Spoken a little bit about our brand. ESG, Noreen mentioned decarbonization, and the E side is often very well spoken about in Atos, but I just want to talk a little about the S side. For many of those who maybe not, don't know, we're a leader in Digital Workplace accessibility, and that's the S side, the social side of the ESG offering.
Lastly, I think we've talked about Gen AI a lot today anyhow, but everything we have done and we've always done for the last seven or eight years, has had a fundamental concept of AI and automation built into it. Okay, let's talk a little bit around some of our great logos that we have as clients. I would really say, you know, these are long-standing clients. There's eight logos on the screen, and each of them, I would say, cover multiple industries, multiple geographies. Mostly, you know, these are happy clients, and they're multiple renewable clients. Many of them have been with us for, you know, 10+ years, and I would.
I think I saw a stat the other day that 60% of all of my clients have a tenure, plus tenure in Digital Workplace, which shows the partnership that they actually see with Atos and how we continue to evolve them as a client for us. I'll select one just as an example. Johnson & Johnson, a global pharma med device company, recently did a split where they split off the consumer division. I'm sure many of you in the room are aware. Kenvue actually selected Atos as their partner of choice as well. Now we would have Kenvue as a logo as well as J&J, but some great logos and some great client relationships that we have there. I'm gonna now get to the other meat of my presentation, which is the what and the how.
How... What are we gonna get do in the sense of numbers, and then how are we gonna get there? The what is, we want to exceed the market. You'll see, I think you may recall in my second slide, the market I said was 1%-3%. What we're suggesting here is that we will grow at 2%-4%, and I think that is absolutely achievable given our brand in this space. But there are some headwinds, right? We had to factor some of those headwinds into this. Think about year-over-year price reductions, renewals, and market macroeconomic conditions. There's a lot of things that we had to factor into those numbers, but I do think they're highly achievable from the what.
If I swing to the how, Clay covered a lot of the how in the portfolio and partnerships and the customers and the order entry. I'm gonna cover the two other ends of the loaf. Firstly, I'll talk a bit little about the team. The team that I reinherited earlier this year. Really good team, needed a little bit more of a global-centric approach. What I've done over the last five months is bring some more sort of global approach to that. Now we have a base in, you know, one of our largest geographies in the U.S. as well as in Europe. We've got now got a perfect mix, and we'll continue to evolve that team over the coming months and years. It's incredibly important we address all markets.
I think secondly, now Digital Workplace has a true focus in Atos. It was thinking about what some of those functions that we have outsourced in the past, how do we look to reinsource those to get one step closer to our clients? There's a set of activities that I'm working on with my team right now about, okay, let's look at these things and say: What do we bring in? What do we say is outsourced? This is really to get that bond with our clients. If I flick to the other part of the slide, the geographic focus.
You know, two main areas for me where I think we've been a little bit weak over the last few years, I think France, to begin with. We're in this beautiful country. For me, it's a bit like you're playing in your home football stadium. We haven't really been able to compete in France for many years in Digital Workplace. Things are changing. You'll see that in the next slide. I want to rebuild our French operation. That doesn't mean going hiring lots of people without the revenue. It means we will build it in a strategic, structured way. We have some clients that we've already landed that will allow us to start building that. I think the other side to this is the U.S. growth.
It's partnering with Clay Van Doren and his organization as he is rebuilding his go-to-market teams in the U.S. market. We have an offering that matches what people want in the U.S., and I think it's that combination of having the business line and the go-to-market sales organization tied together at the hip and to regather our focus around the U.S. market. All in, all in all, this will get us to that $200 million of bookings by 2026 and exceeding the market growth. Let's just talk about a little client. I mentioned France earlier, European Aerospace Company, we won in Q1 of this year, a great logo. The existing incumbent was doing a really good job, so why change? Why Atos? Why change?
The simple answer was the client recognized they really wanted an experience-led approach, a consumer approach. They recognized their workforce was changing, they recognized they needed something that was different, and it wasn't just the same kind of end user services approach, so they selected Atos. You know, a fantastic five-year contract that we've just signed. It will go live in H2 of this year, and it will be a significant logo for us moving forward. There's lots more to come of these. Nourdine mentioned earlier about the EU, we have several others in France and around the world that we're looking forward to announce very, very soon.
A great proposition and a great client for us, and a real, I would say, springboard for the new Atos Tech Foundations and also for, you know, Digital Workplace, which, you know, I'm obviously really, really happy about. Before I go on to the client testimonial, Rob Mustard is the CIO of Scottish Water. I'm sure we all know what Scottish Water do. That's the stuff you drink, so it's an essential service. Scottish Water have been a client of Atos since 2018, so five-year relationship right now. They've just renewed for another three years on top, so that'll make it an eight-year relationship, which is great, so we're getting towards that 10-year scenario.
What you'll hear in Rob's speech is, you know, how Atos and Scottish Water are partnering together, and how we've helped them evolve from a very traditional service to a very modern, new-age service. You know, rather than just hearing from me, let's hear from Rob, and I'll let you guys take it away. Rob?
I'm Rob Mustard. I'm the CIO at Scottish Water. In terms of a Digital Workplace, what does that mean at Scottish Water? Well, we've got over 4,000 people, directly, that, you know, work for us across all parts of Scotland. We've got office-based, and we've got field-based teams. I guess during COVID, one of the challenges we had to do was immediately enable lots of people to work from home, Atos played a crucial part of that. I think, you know, acceleration of that was unbelievable compared to, you know, how long that might have taken us beforehand. That's one thing. During the course of that, we worked with Atos to deploy Windows 10, again, in a completely remote environment, and that was exceptionally well.
It went really well, that's now enabled us to work in that hybrid manner. On top of that, there's also our field force, where, again, Atos are working with us and a couple of other partners to ensure that wherever you are in Scotland, whether you're in an operational site or whether you're in an office, you have the ability to connect and connect with our Scottish Water systems, that I do every day, irrespective of where you are around Scotland. The work that we're doing on network connectivity and the PSTN replacement program are hugely important to our people and hugely important to giving us visibility of our assets going forward.
I think that's a great pitch from Rob. It was super exciting to hear, you know, that, A, they've renewed with us, and B, that they see that evolution with Atos. Before I hand over to Stéphane , I just want to summarize very, very quickly. We've got a strategy, we've got a vision in Digital Workplace. We actually have a client base that really likes us, and that's a big thing, right? Helps you with your revenue and your opportunities. We're a leader in this industry. Lastly, I would say my team, the team, is totally re-energized and really, you know, really excited about executing it, and that's back to the whole, the power of we. With that, I'm gonna hand over to Stéphane, who will take it away. Stéphane ?
Good morning, everybody. I'm Stéphane Richard. I'm leading the business line technology services. Leon, your accent is brilliant. Yesterday, this was a B-Day, more important for me, this was my B-Day. I celebrated yesterday my 50 birthday. Means common point with Nordine. I spent nearly half of my life in this beautiful company. I grow as a man, I grow as a IT expert, I grow as a manager. I start in Atos 22 years ago as a sales engineer, after sales director or account executive, I switched to a more delivery stuff, I really enjoyed to manage some big application management contract with Renault or with Sanofi. TS was born 2.5 years ago by merging some former organization, mainly in France.
Immediately, we took the decision to define a clear DNA for TS, which is a little bit different in addition to the other business line. First of all, we are in fact signing framework agreement with our customer, three years, nearly three years, based on price grid, per profile, per country. After our business is to deliver time and material activity, skills, expertise, customized services, time and material, staff augmentation, different name of what we are doing, to our customer everywhere they are. We are mainly delivering services customer on site, everywhere, using their process, their tool. What we are doing in Nuremberg, what we are doing in São Paulo, what we are doing in Madrid, in Lyon or in Nantes, is totally different. This is exactly one of the key points of the DNA of technology services. Second point, per nature, our business is cash profitable.
Our external revenue is made of the number each month we are validating with our customer, multiplied by the average daily rate we negotiate in the framework agreement, and we invoice each month. This is a very predictable business because very linked to our capability and to our people. Last point, maybe the most important one. In order to tackle this kind of request, my organization is made of constellation of local business unit. A local business unit, this is a small company in the company with one boss, one business manager, between 100, 200 people, city-oriented, and with two or three sales specialists, as explained by Clay, very decentralized, very agile, very flexible.
For instance, in Germany, we are following the line organization in Germany with some squad, pre-sales and sales team, because what we are doing in one line, again, is totally different compared to the other one. I would say TS is triggering the other side of Atos to our customer. We are delivering, as I told you, end-to-end services across customer life cycle. I already talk about customized services. We are doing integration services with our customer, and this is where we are making the link with our technological partner or with our hyperscaler, and this is where we are managing the certification plan in order to increase the skills of our people.
Last year, we managed 700 certification with our tech partner, Dell and ETAP, with our hyperscaler, WBF, as I already explained, we managed some new offering with this partner as a cyber recovery Dell offering. A new one, as explained by Nourdine. This is technology consulting. Why? Very simple. We are very well known by our customer as a doer. We are leader, as explained by Leon or Laurent. The complexity of the edge and continuum plan... is becoming so difficult to manage for our customer, they require from us some advice. We are moving to be doer, to be advisor, which is in addition, a very profitable business. TS, in addition, is a door opener for the other business line.
When you want to win a big outsourcing contract, if this customer doesn't know you at all, if you do not have still some local services with this customer, this is much more difficult. When we know this customer by customized services, we are much more efficient to deliver the change, the transformation which is needed by our customer. The, in this other side, when we are winning some big outsourcing contract as Airbus service desk, one layer of customer satisfaction is, please deliver what you commit in the contract, obviously. The second one is, "Okay, please help us, support us to staff around this contract. You are managing with Leon team, industrialization, offshoreization, but in the same way, I need you to support locally my team." This is in addition, and we can talk about the reverse cross-fertilization, in fact.
In that way, TS is a cornerstone of the Tech Foundations transformation. What is the market we are addressing? As you can see, robust growth, 5%-7%. As I explained, our customer are requesting more and more end-to-end solution delivery. Edge and cloud continuum became so complex with all the technology, with all the partner you can face, that they need a partner which is able to support them in the entire IT life cycle. They are requesting more and more insourcing and specialist service center. This is due to the geopolitical situation and to the sovereignty, obviously. An InnoLab, in fact, this is a small squad team, 5-10 people, no more. Talent guys thinking out of the box, which are locally managing the ecosystem, as I told you, partner, school, local.
For instance, we announce a new offering, the Atos Cognitive Data Platform, and we are making for Aéroports de Paris, for instance, on the green data. This has been started three years ago with some small workshop, co-innovation workshop with Bordeaux Métropole. Co-innovation workshop, we are declining after some proof of concept with our customer. Again, this is amazing. That means we are creating a business with our customer. No competition. Very profitable business again. We are deploying this model nearly everywhere now, and this is a key and unique differentiator on the market. Nobody else is able to manage this network of regional Innolab. This Innolab is feeding by the bottom up, the future of the portfolio of Tech Foundations. This is another very important point. What is our plan? I told you, local business unit, very flexible. We can open, we can close.
We are following our customer. Second point, we are managing short-term contract, as I told you. That means each three months, nearly, we are renegotiating the price with our customer, tackling the inflation in that case. In Europe, we forgot the inflation, but my team in Brazil, for instance, they are very used to renegotiate the price each three months. This is usual for them. In Europe, we forget this. Now my job is to be back on this kind of periodic renegotiation. Secondly, as I told you, we are selling skills, expertise, learning, certification is key for me, and this is a way to increase my price. Obviously, when one of my employees is successful to be a cloud architect, for sure, I'm selling this expertise to this customer. Second point, geographic expansion. We opened Africa one year ago with Bérénice.
We are expecting a double-digit growth in Africa. I won't talk again about the Togo references ID card. Follow the next news, we are duplicating this model in other country in Africa. Three weeks ago, with Julian, we were in the U.S., and we officially opened a TS organization in U.S. The U.S. market, where we are not, still not are, sorry, for TS, is huge. Our pipeline is already here. We opened one month ago. We already sign off a contract with a customer I can't disclose. We already sign off a contract. Third point, portfolio expansion. As I told you, technology consulting, in order to be seen by our customer, be advised by doers. Again, I would repeat one key point. Why my plan and why I trust I will beat the market trend?
We did it since two years, despite the uncertainty of the market, thanks to the diversity of the service, thanks to the diversity of the geography, thanks to the new geography we are opening, and thanks to the portfolio expansion. Our growth for TS is extensive, and as TS, we still continue to deliver and to trigger the other side of Atos for our customer and thanks to our employee. We are perfectly on track, maybe a little bit in advance and ordering compared to the plan, going to your introduction. My pleasure to announce this is time for the coffee break, but only for 50 minutes, please. Thanks a lot for your listening.
Okay, thank you. Welcome back! I hope the coffee break was good. Just wanted to wrap up the first part, where you get a sense of the diversity of the business in Tech Foundations. I think it was important, at least to help evolving the perception of the various business model that we have going on in that EUR 5.4 billion business. Now we're going to shift to the transformation plan, that EUR 1.2 billion program, and giving you a little bit more insight about what are we doing, how we are doing, and giving you an update on maybe two main topics.
We had a lot of dialogue with some of you about how are we tackling the red account, and by when it will be done, and so on, and maybe how we are tackling that strong trench of headcount reduction as well. If I go there. First of all, it's a comprehensive approach, okay? A holistic approach. We are not just tackling one dimension. As you have seen, we are tackling several. Re-architecting our go-to-market model. Clay spent time in explaining you how we are streamlining the process, aligning the accountability and the incentive, and reinvesting in those pocket new offering, but as well as large deal, to make sure that we get to the right book to build with the team. Yeah? The portfolio redesign.
Each of the business leader have been telling you the story, each of them with their style, on how are they making evolving their portfolio. Before going that, maybe just one point on the talent strategy and the culture. What we are trying to achieve with the team is shifting the culture of Atos, that have some way drift away the years before. Trying to bring it back to a more cash-sensitive culture, understanding the priorities, trying to bring back discipline, commercial discipline and commercial skills, bringing more expertise, and accelerating the client centricity, which was already one part of our DNA. Moving to the margin expansion, I think here I want you to take at least two message before going to the breakdown.
This is an unprecedented margin expansion program in such a window, in such deepness, to generate $1.2 billion gross benefit. It's really important. It is backed with an envelope of restructuring. Today, we are mentioning $780 million, 10% lower than what was presented last year. I just would like to maybe double down on that. When you take the upgraded guidance, when you take the reduction of restructuring, what we are saying to the market today is we will do our transformation with $300 million less than what was presented to you one year ago. $300 million plus less. I think it's really an important point. I want to make sure you get that through. That $1.2 billion is breakdown in four categories.
Each of those categories have a set of classical levers, how are we addressing them? We are adding next gen levers. As you could imagine, we need now to integrate much more artificial intelligence in the way we are operating and extracting insight to act on time with the right benefit. The delivery modernization, which will be all about that high cost restructuring, reducing it, and shifting to offshore, but as well now embarking, like Laurent mentioned, all the MLOps, GenAI Ops that are surfacing in our operation. Project margin expansion, it is about going account by account and improving our project margin. Here, two categories, and we will address them just after. Two main categories, I would say.
The red account, the underperforming account, which we are tackling heads on with the entire team, and then the pricing increase, which here we tackled it partially last year, and we still have room, and we need now to industrialize the approach, yeah? Third-party spend. As any large IT service provider, we do have a large base of third-party spend that we need to address. Here, this is a bucket which is sitting outside our project margin that we are focusing on. Last but not least, the structure, the SG&A structure, and especially in regard of the GenAI impact, will have to be integrated, and that's an upside, which is not yet in that plan. All in all, this is a plan we believe in.
Darren, in his section, as a CFO, will walk you through the bridge in how we have been sizing that envelope, how we have been mitigating some risk to get in front of you with that $1.2 billion. Now let's go and address maybe first, delivery modernization. I'm going to make it simple here. By 2026, we'll have 15% capacity free up versus today. As we mentioned, I'm reducing the number of headcount to deliver the same level or even higher revenue. Number two, offshore, we were late. We are around 54%, 55%. We need to be around 65%. In the next three years, we are moving to an offshore ratio of +10 percentage point versus what we are today. Okay?
Number three, this is an also an upside here that we are still debating inside the team, but what we see is our pyramid structure will evolve. I told you in the introduction that all the junior analyst role will be swapped out by the GenAI wave. What we believe is the first step of maturity of GenAI will push us to address that pyramid differently. Here, the teams are working, and this is an additional opportunity which is not yet fully embedded in the previous plan that you saw. That's one dimension of delivery modernization. Here, just to give you an update, this is the headcount reduction that we are driving with the team. We already achieved more than 900. Again, our view is by the end of 2024, we will have executed 75% of it. Why not faster?
I remind everybody that it is mostly addressing continental Europe, which needs a period of execution, yeah? Maybe last but not least, all that plan has been fully presented to our employee representatives body at the European level, but also at national level, and it has been completed in the right time, in the due time. If I go now to project margin expansion, which is the second topic. Last year, I told you that I had a little bit more than EUR 700 million of the revenue in Tech Foundations, which was underperforming. When we say underperforming, it was sub-- seven, not substandard, it was negative, and that was draining a lot, the PNL of Tech Foundations and the cash of Tech Foundations.
What I wanted to show here with you is, because I got that question, I think in the Q1 publication, "Hey, could you give us more flavor on how you dealt with that?" Today, I'm coming back with figures for you. First, 22% of those account, of that revenue, we have been able to tackle it by pure renegotiation. Going in front of a customer and pushing for the value, is it due to inflation or is it due to better services, or is it just maybe scope creep, getting the customer acknowledging the need of price increase. That was important. 37% of that revenue, what we did, we descoped the services where it was not a sweet spot for us. Generally, red account doesn't go with high CSAT.
The customer is always not happy about that piece. We agree to descope our services and refocus on what we know and how to deliver and how to generate value instead of the area of problems, yeah. Obviously, in those discussions, sometimes you get to termination. We terminated contract. We are terminating contract because those, some of the customer or some of the contract we had were not manageable. Eight percent of that revenue has been addressed, and we are still working on the remaining piece, which the team are committed to finish by the year end. Basically, we addressed EUR 500 million of that EUR 700 million I mentioned initially, which is represented the 66% you saw here. Just to give you a quantum, we are talking about almost EUR 60 million of margin improvement from 2021- 2022. EUR 60 million. It's not enough.
How are we going now to make that sustainable? The worry with the team is to make that a one-time task force, and then we get more struggle. That's why I'm coming back to that cultural shift that is needed in the transformation. We are putting in place those new initiative together with the team, so with Clay, but also with the business line leaders that are now approving deals, but also with the geographical leaders that are also approving the T and Cs. Here, what we are doing is, again, exiting the non-account, strengthening our contract and commercial management. That was really a weak part in the culture of Atos. We were signing things too easily or not with the right protection mechanism. The phase in our business where we have the most risk when we execute a contract are the beginning.
Normally, we do a transition. In our business, we commit to a transformation. Often, the customer wants to see the saving pretty early on in the contract. The red phase, or I'll say the trouble phase for most of us, are the first 18- 24 months that needs to be put under strict control with the right early warning metrics to be able to impact customer and account team at the right moment and not let the contract drift to red totally. Here, same thing, we put a central team in place. They are monitoring it. We have our dashboard in place to make sure that all those contracts are being ramped up with the right level of commercials, including margin. I will say also something I was frustrated with the previous setup.
We clarified it now, making the responsibility much more clearer. The end-to-end delivery is under the business line, and the geography are leader of the go-to-market, the go-to-market management of a customer locally. Now by simplifying the setup, I'm simplifying the accountability, and now there is one throat to choke, which was really important. I think Clay mentioned it not so long ago in Atos, I think 10 people were responsible and nobody was accountable, if I remember well. Anyhow, and we aligned the incentive mechanism, which was really important. Important why? Not only on operating margin, now starting leaking into cash.
That lever has not been deployed enough in the Atos context. That's something we are taking on with the entire team, leadership, to make sure that everybody gets the cash metric in their bonus scorecard, in their incentive schemes. As a priority, I'm spending time on that. It's really important because it is changing the entire paradigm of the Tech Foundations employee, where before, the organic growth was the main metric. Everybody was looking after organic growth without the same impact on cash. Here we are totally turning around the pyramid. Now, the main metric is the cash, and we are expecting the behavior to change, thanks to that. What does it mean? It means that last year, we reduced from 13% to 9%. We are not where I would like us to be.
We still need to get closer to what is the industry benchmark, even if I'm not proud of that industry benchmark, but the industry benchmark is talking about 5% of your revenue, which is in trouble, yeah? Here, the team are working hard to get us below or at 5% by the end of the plan. Second action on the project margin expansion, the pricing. Same thing, we wake up late to the inflation discussion, and last year, we had the need to launch a set of initiative, by the way, across the group, Eviden and Tech Foundations, to make sure we were catching up on those price increase.
Some of them are being done automatically or by contract, applying COLA colas. Some of them needed the account team to go and sit down with the customer and negotiate the right level of price increase, yeah? We generated $35 million last year, which is already embedded in our plan. The way we have delivered it was pretty, I will say, artisanal. It was each account team looking at their data and go doing it. What we decided with Clay and the team, is now to put a little bit more structure, integrate all our contract now in a database, which we are leveraging from the split, the operational split we are doing, and now putting AI on it to be able to systemize that approach of price increase in all of our contracts. It's evolving.
I think we are not yet there where I would like us to be, but now we are seeding the right initiative and action to make sure when it become part of our ongoing commercials activity. On that plan, that $1.2 billion that we sized last year, and we put the entire organization, Tech Foundations organization, in full motion to deliver, we have seen already the first result. On the rebound side, on the commercial side, we increased the pipeline by $1 billion, as mentioned previously. We improved slightly our book-to-bill, even if I'm not where I would like us to be.
We increased by 50% the new logo, which is a good signal, because even during that period, we have been able to embark, convince, and bring net new customer with us and believing in what Tech Foundations believe to deliver to our customer. On the operational side, we moved fast. We already achieved EUR 270 million of that EUR 1.2 billion, which is a little bit slightly ahead of our plan, knowing or taking in consideration that last year we were setting up the framework at the same time. Now that the framework is set up, it's all about execution and full motion. We reduced 900 headcount of our high-cost countries. It's important because 75% of our cost base is labor.
When you look between offshore and onshore, the onshore side is costing us a lot, and that needs to be adjusted only to the one we need, yeah? Obviously, we addressed the underperforming account, and you have seen in both sections that we have been ahead of the previous plan, which give us the confidence to update our guidance. Here you just have a breakdown of each category and how we are progressing, and I think we will use that in our semester close to give you an update on how we are progressing in our transformation plan, semester after semester. With that, I have the pleasure to introduce Darren Pilcher, our CFO, who will now take you through the numbers. Thank you.
Okay, good morning, everybody. I want to start with a little story. five years ago, in February, I joined Atos, and I was wondering, what is the Atos company about? What, what is it? What, what does it want to do? How does it work? I started to ask a number of people, "What is the company about? How do we do this?" I got some good answers, but they were very inconsistent, and some people said about the people, some people said about their own business unit, but no real consistency. I can tell you, in the last 12 months, it's very, very clear. It's all about improving the numbers. We are completely dedicated to improving the numbers. That's the first short story.
The second short story is, my name is Darren Pilcher. I have been in the IT industry for 25 years. I've worked for IBM, DXC, HP. I've seen the full breadth of the IT services industry. Worked in every dark corner you can imagine in that industry. I've seen some ups, and I've seen lots of downs. The one common theme from all of the downs is that those businesses that tackle it with a strong strategic plan to recover, plus instill that in the rest of the organization, are the ones that do recover it, okay? I've seen many plans that are not really embedded in the organization.
Nourdine and I have been very focused on this, very focused on making sure we get the full management team around this recovery plan, and that's what we've done, and we've started to see the success of this. Let me begin. First of all, I want to give you six key messages from my presentation. Number one, we over-delivered on revenue and operating margin last year. We did EUR 400 million better on revenue, and we did 3.1 points, basis points, improvement in our operating margin, an extra EUR 156 million of OM. This was really good. Secondly, as I just touched on, we have built a very granular plan for this recovery, okay? We've built the plan, and I'll take you through more of that later.
Thirdly, our core revenue, you've heard from some of the business line leaders earlier. Our core revenue is expected to grow between 0%-2% until 2024, and it should grow further thereafter. Thirdly, Sorry, fourthly, get my numbers right. Fourthly, operating margin turned positive in full year 2022, and we have set the ambition at 6%-8%, which is at industry standard level. Last year, we weren't quite able to do that. This year, we can. six, between 6%-8% is in line with industry standards. We're building this plan to get us back to industry standard level. Our cash flow performance, we project, will turn positive in full year 2025, and full year 2026, you've heard already, $250 million+.
Our cumulative cash flow over the next four years is around $300 million more than what we projected last year. Let's turn briefly, at least, to what we did last year. Here you can see on the revenue side, we improved by $400 million. Actually, the first headwind we had was our own decision to exit some of our non-core business. Really, on the BPO and the VAR business, we exited the BPO account, and we continued to reduce our value-added resale business. We had higher-than-expected revenue retention, which I think Laurent has really touched on in his presentation. We didn't see that dramatic decline from 2021 continue into 2022 on our core infrastructure.
We retained better revenue, and we started to win new deals and boost our fertilization rates as Clay Van Doren has projected, okay? We boosted our renewal rates up to 91%, and we've signed some new logos. Lastly, smallest number on the chart, but it's important, is we're tackling the pricing challenge, okay? Last year we were all hit with the macroeconomic issues of inflation rising, and we had to go and tackle some of those contracts where we didn't have cost of living adjustments. We had to go tackle them, and we've done that. We ended with a higher baseline on the revenue, EUR 5.4.
On operating margin, of course, we carry through the margin from the incremental revenues. The most important areas in our margin expansion, where we had EUR 185 million of gross run rate benefits delivered in full year 2022. Against the EUR 1.2 billion that Nourdine showed earlier, which is in our plan for gross run rate benefits, we delivered EUR 185 million last year. Okay? We had some headwinds and counter effects, and here we're really talking about where we have some backfill cost behind some of that gross benefit and also some of the cost headwinds with inflation. Nevertheless, we got to +EUR 38 million at the end. That was last year, but I know you're all really here for the future, not last year.
Let me move on. Let me spend a few minutes talking about the plan. We've talked a lot so far about we've got a granular plan, we've got a detailed plan. I need to give you some color behind it. Our, our plan started with our top 100 accounts. We went out to each of those top 100 accounts, the account leaders on there, and we asked them to build their projections on their revenue and their cost, and we gave them a number of cost levers and initiatives that we've been developing to. And to drive our productivity metrics. Nourdine has mentioned about offshoring being 10 points behind, labor pyramid, et cetera. We gave them the tools to do it, and they built the plan for their account. Okay?
We have a granular plan built by the top 100 accounts. We have that augmented by the geographic leadership and the business lines. There isn't one leadership position in this company that hasn't played a part in the building of this plan. Everybody is running this plan, and everybody is being monitored against this plan. We've built the full bottoms-up plan, and then on top of that, we layered in the investments that we need to do to tackle the cost base. The cost base is too big in the company. You can see it from the operating margin. It's an issue that's been permeating through the company for many years, and bits and pieces of it have been tackled year after year, but we've never seriously addressed the cost base problem that we have within the company.
Our plan is tackling that, which is why we have a lot of restructuring spend, investing into fixing the cost base. Once we fix that cost base, we then have a flexible cost model, which means we can adapt to future headwinds beyond 2026, okay? It's really important that that message lands because it's a, it's a lot of money, but it's important for us to fix the cost base, particularly in Western Europe, okay? We've layered in those plans. We've also layered in some other investments in R&D into that plan, and we have the full plumbed out financials laid out in our plan that we are working and tracking to. Finally, we have governance on it.
We have governance, we have the business leaders owning their part of the plan, driving their part of the plan, and we are clearly steering them to make sure they achieve it. That's the plan. How does the plan look? If I take each in turn. On the revenue side, our revenue low point is still at 2024, as we said this time last year, but the magnitude of the revenue is much better. We're EUR 900 million better than the low point given previously. The EUR 900 million is obviously benefiting from EUR 400 million better in 2022, so that's a higher number, but also in last year's plan, we expected a similar decline in 2023. That's unlikely, very unlikely to happen, okay.
We can anticipate another EUR 300 million or EUR 400 million benefit, all of that EUR 900 million coming as a difference to the plan in 2023. The low point in 2024, EUR 5 billion, it's EUR 5 billion, circa EUR 5 billion, could be higher, but that's the low point. EUR 5 billion is the low point. In 2026, we expect to go back to normal growth, as you've heard through our dynamics on the portfolio, and I'll touch more on that in the next slide. Operating margin. Our operating margin, as I've already explained, is we've turned positive in full year 2022, which is three years ahead of plan. Great. But actually, where we need to be is 6%-8%, okay? The 6%-8% is industry standard. That's what we're gunning for.
We're not happy with anything else at this point. This is to get us to full year 2026, which will put the business back on an even keel. Okay? What happens beyond then? Obviously, we have ambitions, but full year 2026 is about getting us back to the industry standard level. Finally, on cash. We do need to make these investments in restructuring, which means that we will not turn positive on cash until 2025. By then, we would have laid the foundations for further growth in the cash number. 2026 will give us $250 million plus. of cash flow, and I'll talk more about the cash in a couple of slides. Let's move on to the revenue.
On the revenue, I've given you the headline numbers, EUR 5.4 billion for 2022, EUR 5 billion the low point. We move back to growth. We've split this into three distinct parts in our portfolio. Firstly, on the dark blue box, as we've described earlier, on the new portfolio that the team are drawing, we've got a higher addressable market to go after. The momentum on those business lines, on technical advisory, Digital Workplace, and the Digital Business Platforms is there. The momentum's there. We expect those businesses to continue to grow. That's good. The medium blue shaded box, the middle box, is really around the story on Hybrid Cloud & Infrastructure.
Within this story, Laurent has described the difference between the core infrastructure and the Hybrid Cloud & Infrastructure offering, where we have a sort of counter opposing growth number. The Hybrid Cloud & Infrastructure business, it will decline to 2024, as the mix shifts, it will move back to growth. We expect the stabilization of Hybrid Cloud & Infrastructure to occur at full year 2024 before returning to growth. The final piece is our non-strategic business. The non-strategic business today represents 17% share of our business, and we have a plan to move that to 6% over time. We will manage that down. This is again the value-added resale business and the BPO portfolio.
We will manage that down in a fashion which will enable us, which will really drive the low point at EUR 5 billion in full year 2024, before we can return to growth. The message ultimately is that our core business, excluding the non-strategic, the core business will grow between 0% and 2% to full year 2024, and accelerate growth thereafter, okay? As Hybrid Cloud & Infrastructure stabilizes and the growth, the positive momentum businesses of Tech Advisory, Digital Workplace, Digital Business Platforms will grow. We have a sort of a dip and then a growth. Let me move forward. On the operating margin story, let me spend a little bit of time on this one.
In the blue area box, Nourdine covered some of the initiatives in his earlier presentation, here, what we have within our plan is from full year 2023- 2026, we have $1 billion of gross run rate benefits planned in to our transformation plan. With 185 we did in full year 2022, plus the $1 billion here, you get to the $1.2 billion that we set out as our aspiration. The $1 billion of gross run rate benefits, it's around the delivery modernization, we improve on our delivery productivity, the offshoring, the pyramid, the utilization, and that is the biggest piece of our transformation plan.
We saw the benefits generated in 2022, which is why we believe in the benefits continuing 2023-2026. We have the restructuring plan behind us to help achieve that. The project margin expansion is a combination of addressing more on the red accounts, but also on pricing benefits. Remember, these are cumulative benefits, so over time. The project margin expansion, again, we believe in that. We've been able to address that in full year 2022, and we'll continue to do so. On the third party spend, this is a better supplier management and also management of our subcontractor base, et cetera. We have a good rigorous plan around our non-people cost. The SG&A piece is really transforming and simplifying to some extent our organization.
As we move towards a separation scenario, our transformation around some of our processes today. Remember, Atos has grown up from a combination of lots of different businesses, lots of different internal processes. We'll simplify that. I personally, within my finance team, will simplify it. We will simplify our SG&A benefits, sorry, our SG&A cost, and we have a plan to do that, and we're executing on that plan. The gross benefits we can achieve, there are headwinds and offsets, of course, against that. We know we have an inflation environment. We built into our plan salary increases that will flow through, and those increases are built in the range of 3%-5%, okay, depending on the country.
We built in a reasonable amount of inflation increases in here, 'cause we're not being super aggressive here with this plan. We're trying to build a balanced, credible plan. Our backfill costs are important, obviously. Incremental R&D, we will spend more on R&D as we look to continue our investments in new technology. Other headwinds really pertains to other macroeconomic risks that we might encounter. Again, we've tried to offset some of the, let's say some of the ambition with it that was built into our plan naturally, we've tried to offset that a little bit by putting in cost contingency against potential macroeconomic headwinds. We could have more, you know, supply cost issues, changes in the IT sector. We could have inflation, you know, creeping higher than we've even anticipated.
We have built some headwinds protection into our plan. Okay. This will get us to the industry standard margins. Let me move forward. On free cash flow. I'm gonna take each piece in turn here, but our free cash flow, as I've said, we anticipate getting to EUR 250 million plus. Our OMDA will be driven, of course, by our OM benefit and through the walk I just took you through. Our capital expenditure, we are a business that uses capital. There's no way getting away from that, okay? Our Hybrid Cloud & Infrastructure business will use capital expenditure.
We have built into the plan, a modest improvement in our capital usage. We focused on our Hybrid Cloud & Infrastructure business. Our capital plan is really linked to the performance of that business, and it will fluctuate. As that business goes up or down, our capital expenditure will go up or down. The CapEx, we can't get away from. It's going to happen. That supports our business. The change in the working capital, a moment on this. Throughout the presentation, you would have heard Nourdine and others talk religiously about cash. Cash is very, very important to us. Which we're instilling into the company, into our organization, a culture that cash is very important.
I have been pushing our organization to really focus in on the account DSO performance that we have today, to drive cash war rooms on the performance of those accounts and by geography. Also, as we come to solution new deals, we're looking very carefully at the cash dynamic in those deals. Now, historically, we've always looked to a payback mechanism, but now we're beginning to look at the DSO on the new deals as well. We're really taking a strong view in our price release, in our deal solutioning process around the cash. That's very, very important to us. Within the plan itself, we've kept working capital.
We haven't changed it too much, except in full year 2026, we put in a small improvement coming from our account DSOs, which by then we should see, and hopefully we see it much earlier, but by then we should see some improvement in our account DSO, which is why we have a small benefit in our cash plan on the change in working capital. It really happens in full year 2026. The restructuring cost, rationalization, and PRC cash outflows, these are headwinds. Of course, we know about them. The restructuring cost is the tail end of the restructuring plan that we have, so this is the cash-out implication of that. The rationalization is an ongoing spend that we have, mostly related to our data center consolidation and real estate consolidation work that we do.
This is an ongoing factor, and our PRC cash outflows is recognizing the cash outflows coming from the impairments we've taken ex- historically on some of our large accounts and vendor commitments that we booked in December 21 and some more in December 22. It's the cash outflow coming from those. Now, restructuring and PRC cash outflows in full year 2026 are quite high, and we would expect them to tail off beyond full year 2026. We're not giving any guidance beyond 2026, of course, but we would expect them to move towards more natural numbers beyond full year 2026. Our cash position, we see a credible path to $250 million plus in full year 2026, but we are trying to action structurally within the business so that we can aim to achieve more cash in future years as well.
Of course, I can't, I can't give you any guidance on that today. Okay, and finally, of course, through that plan, $300 million higher cumulative cash generated within the company over the four-year period. That's really coming from higher operating margin and upside it in the restructuring numbers, Nourdine has indicated to you, and that's where that $300 million is really landing in the cash flow view. To conclude, in full year 2026, we expect to be back to growth, and our core revenue, we expect to grow 0%-2% up to full year 2024, and will grow thereafter. On operating margin, we want to get back to industry standards, so we're guiding that we will get there by full year 2026.
On free cash flow, we expect to be at EUR 250 million plus by full year 2026. Finally, my very last point, we have a plan to execute, we have the culture, we have the leadership team, we have everyone behind it to do it. Thank you for your time. I will hand over to Nourdine for closing remarks.
Thank you. Thank you, Darren. Before wrapping up and going to the Q&A, maybe again, few messages that we wanted to learn today with you. First, Tech Foundations has a bright future. I'm not sure whoever penned a different story, but Tech Foundations has a bright future. We are mission-critical for our customers. We are delivering those infrastructure-critical services for our customer, and you have seen through the various presentation that without that, nobody is there to operate the digital backbone of our economies. We will be there for long, and we are going to transform along the way of the market. Second, we have a clear, granular, unprecedented plan to get us back to the industry benchmark in term of profitability, and then after that, in term of cash.
We are clear, and the entire organization is mobilized, especially all the frontline leaders, to make it happen, and we see it in the traction, and we see it with the entire leadership team. Third, you saw some of them on stage, you saw some of them in the room, but in fact, it's the entire 52,000 employee that are committed to our story, committed to our recovery, and believing in what we are building together moving forward. I want to make that clear, because a lot of people are asking: "How did you reacted so fast? Or how did you manage that so far?" It started only with a connection to the people, being more authentic, being more direct, putting in place the feedback loop.
It seems a little bit cheesy. I could swear you, that was not the culture that was at Atos before. By putting that in place, we have been able to embark the entire team with us, and that's, I think, the main lever. The fourth message is based on all of that. We decided to come back today in front of you to upgrade our ambition, upgrade our guidance, because we do believe that now we have a foundation, and we have also the mitigation to secure that midterm guidance that we shared with you. Where are we heading? Again, we want to be that engineering team, which is orchestrating, operating the digital backbone of our customer.
It is across that entire continuum, that entire cloud continuum, from the public cloud to the edge, including also the devices like Leon presented, including also the end user. By doing all of that, injecting into the current portfolio, the GenAI impact to provide and starting providing services, GenAI activated to our customer. That's really our vision, ambition, and that's how we are want to reposition our portfolio in the next three years. Again, coming back to the previous point, you cannot do that without the right talent strategy. Yes, we are going through a turnaround period. Yes, we are going to reduce our headcount by 75%, I think, in the overall envelope that we mentioned. At the same time, we are building up the next wave.
We are adjusting our pyramid to be ready after 2026 to rebound altogether. We will keep that leadership in sustainability, improving diversity and inclusion, which is really important and part of our value and part of what we want to drive as tech for good DNA at Atos. Again, several have been saying that the business is dying or is dead. I see only resiliency, especially in the current context, and I see only opportunity for rebound. Now we get back to the why. Why are we doing all of that? We presented a plan which bring us till 2026, but the life will not stop there. We do believe there is even more value creation for our shareholders, for all our stakeholders, beyond 2026. As you have seen, we are shifting our portfolio to move more and more to platformization.
This is what we believe that's coming next, this is what we need to get ready with. Again, all those disruptive mega trends that are impacting our portfolio and the market will help us move into it. We are the larger managed services provider in Europe. We have earned our right to win deals in Europe. We are extending that even globally. Why not, when we have the platform ready, believing in even more options? More options for us to aggregate into that platform, the future of that portfolio services in Tech Foundations. That's really what we wanted to share with you today. At the end, before going now to the Q&A, I think this is a new motto that we're launching today. We did not put too much emphasis into it, but we are going to that.
The entire team wants to focus and help our customer, society, to advance what matter. Obviously, we need first to fix and clean our own house, and this is what we are doing, and everybody is 200% committed to do it. What we are believing in is really continuing progressing the world and advancing what matter the world with our services. With that, thank you. Thank you for being here.
What I hear a lot from our people out in the regions, out in the geographies, are two things. First of all, they are really excited about the opportunities tied to the evolution of our portfolio. What I hear a lot about as well, is our new way of working. We talk about agility, we talk about simplification, we talk about co-creation and squad working. Those are new concepts for us at Atos, and what I hear is people are really excited about being able to participate and embrace this new way of working across different functions and across different geographies.
I appreciate the fact that I can bring all of my 30 plus years of IT experience, plus some much more recent skills gained in ecology and biology, and try and bring those things together to help customers understand how to really adapt their businesses. This is something which I'm finding enormously fulfilling, and I'm enjoying very much using techniques such as artificial intelligence and satellite image processing, to try and provide more support for some of those biodiverse areas around the planet that our customers are interested in.
As I grow here in Atos, I am constantly introduced to a lot of different technologies, coding using different programming languages, and learning best practices, and the endless possibilities of automation. Learning just never stops, and I think that's very exciting.
Our company is very diverse and dynamic. Every day, there's something new to learn, and our leadership provides us the proper tools to keep up to date.
Atos really drew me to it and has kept me with it, because it seems to be very human-centric in its approach, as far as making sure that there are options for everybody to figure out what's gonna work best for each employee, so that they are able to succeed at their job. Knowing that company wants to invest in me really sparks in me the desire to give back as much as I can, and to have that spark ripple throughout my colleagues, throughout my team members, and finding ways for them to be empowered as I'm empowered. Atos just provides the environment to do that in a very organic and genuine way. Your career is in your hands when it comes to working at Atos.
The people are just incredible. I never cease to be amazed by the dedication that our employees have to our customers, but also to each other.
We could create maybe some space from some question. We will try to handle that with the team. I cannot hear you. One moment.
Okay, great. I had a couple of questions. First, maybe, Nourdine, for you. You talked about sort of the 0%-2% rate and acceleration thereafter, but you said that your kind of outlook is also based on a kind of higher TAM, and I think you said the market was growing 3%-5%.
Yeah.
When we look at the business, obviously, this is obviously excluding the non-core activities, what is the reasoning behind why you would still sort of undergrow your TAM? What else is there, kind of, to fix? Is it simply execution, the go-to market or any critical categories that you're absent in? The second question is around sort of pricing. You talked about sort of AI and the benefits, but obviously, the deflationary aspect of that, but also the doubling of the headcount in offshore. I'm just curious to understand what sort of price deflation you have sort of baked into this sort of outlook.
Lastly, as you look at the kind of the portfolio and as you look at sort of the non-core, which seems to be dragging, you know, is there any scope for further sort of disposals or, you know, acceleration of the portfolio mix down the line? I know you've got a lot on your plate right now. Thank you very much.
Thank you. Thank you. Relevant, relevant question as usual. Maybe let me start with the organic growth of the core business. I think again, we are living in a lot of uncertainty and changes. What the team and I have been trying to give to you here is, we want to undercommit and overdeliver in some area. Yeah? There is a level of consciousness in what is going in front of us in the next two years. What could be the headwinds toward that? It could be that the development of the hybrid multi-cloud offering is taking longer, and the hyperscaler site or the hyperscaler partnership is not working as well as we wanted. That could be one side.
The other side could be that the revenue retention is not good enough, and we need to increase it, and we need to extend it, and that could be some accident, especially when you provide and you work in those large segment, large contract. I would say that's the downside, but the entire world of upsides, like we mentioned, is in front of us. Could we be more bolder? Yes. I don't think it needs now, because the first thing from 2023- 2026, the message I'm sending to the team is, for now, stabilizing the top line is good enough because we need to fix cash and margin. I'm not saying that it's not a culture of and, I think I remember someone saying that. It's and, and, no issue.
I think stabilizing the top line and being much more selective, and that's what we decided with Clay, being much more selective on what's coming in, and making sure that those contracts are not becoming red after six months, is more important than achieving three or four % growth in the current situation. You want to complement, Clay, on that one?
I think the other thing is that our sales maturity model and the commercial that we talked about, it's not fully there yet, right? I think the other thing is, you wouldn't expect us to perform as strongly in sales as some of our competition, given against the market. I mean, certainly by the time we end in the out years, I think we'll be there. But it's a cumulative effect of revenue, contract base. We're definitely making big progress, but we're not where we need to be. I think you just have to extend that out a couple of years, and then I think you'd probably see us in the same numbers.
Maybe now tackling your third question around that non-strategic revenue and how we want to tackle it. The pastoral thing, I don't think there is any thinking around it. The one piece which is inside it is the BPO business, which is mostly in U.K., with the British government. Here are some contracts that we may be open to. We need to look with Diane and the team, how we will proceed, but it may be an eventuality. Yeah, I'm coming, I'm coming to it. Well, here I will share it with Darren. Here are two aspects. I think what I shared with you on the screen is, I see all the junior analyst role being swapped out, especially first in some of the low-cost countries. Yeah? Here we need to anticipate how are we managing that pyramid.
Well, you know the story in that industry. A lot of graduates, and then you let the musical share effect happening as they grow. Here we need to understand, and this is the assessment what we are doing with the team, we need to understand how we need to adjust our graduate hiring, and how do we make sure that we are getting the right level of skills faster into that mid pyramid, which will be the game for us.
Personally, I believe this is only the first wave of impact of GenAI in the pyramid. I believe it will go even further. We are still anticipating and thinking with the team how we need to reshape that. As I mentioned, any upside of that is not yet in the plan. There is an upside in term of processes, but not yet fully in the plan. In fact, there is a topic about inflation, Darren.
Indeed. In respect to the price deflation issue, the best answer I can give you for that is that our plan was built bottoms up. Every account, all the top 100 accounts, they took all the initiatives, including offshoring, into their projections as they gave us their revenue and their cost numbers. It's already factored in to the numbers that we have.
Hi there, Fred Will at Bank of America. A couple of questions. Firstly, on generative AI. You talked about some of the opportunities. Maybe you can flag some of the risks on the potential Digital Workplace or BPO. Second, if you could give us an update on the free cash flow side. You said it's $100 million better than you presented at the time, but if you can share with us what you currently expected cumulative free cash flow between 2023 and 2026. You know, where we are on the restructuring costs, I think the envelope was $400 million initially. Are we still there?
Certainly, if you can give us any comment on what we're seeing in the press around Atos negotiating with some partner, potentially selling Tech Foundations. Would you be willing to considering disposing the asset for free, while leaving some liabilities and some cash balance in the unit? Any comment on that would be very welcome.
Maybe let me start with the last one. First, I would not comment too much on the rumors, yeah, because unfortunately, I have been living a Netflix story since I took my job. Rumors every week, I would be spending my time commenting all of them. To be to answer a little bit to your question, Tech Foundations is back. I think I mentioned it a few months ago. We have a plan. We are executing on that plan. We are ahead of that plan. Me and the entire leadership team, we believe the enterprise value of Tech Foundations is a positive one, and we are able to create even more value for our shareholder moving forwards, yeah?
Now all marks of interest are obviously addressed by our chairman and the board of directors, and they will be on time communicating if anything needs to be communicated. Coming back to GenAI, maybe a little bit more softer. Coming back on GenAI, I think it will disrupt. It will disrupt first, I think, initially, all our internal processes, yeah? All our internal processes, I mentioned the example of proposal writing, which we are automating, and I will give a flow to some of the business line. Each of them are, you know, piloting some GenAI adaptation to their own processes. It will be disrupting that entire pyramid, which we think we will need to include in our plan moving forward. Right now, I cannot come out. It's only a few months.
We are part of a beta test with Microsoft on the Copilot of Office 365. We are also working with Core AI. There are several nuggets of AI initiative going on that we need to aggregate, but the rendezvous I gave to all my leaders is by the exit of the summer, beginning of the fall, we need now to have a more industrialized way to go there. For now, the approach that we decided is to let popping up those initiative everywhere and making sure we regroup them. Coming back to your point about the risk, I think there's clearly some risk to GenAI, yeah? I think safetiness, security, those are linked to it.
That's why what we did with our CTO, Adil, behind you, we launched our guiding principle of operating those GenAI pilot, making sure that the data, the data set is not floating around, making sure that we are leveraging the right platform, and we are not taking any sensitive data and putting it on those platform without our approval. We have few platforms that we have validated, certified, which the team could naturally go and test their use case, so we don't slow down the innovation. Maybe a little bit more comment, Leon, on it?
Sure. From a Digital Workplace perspective, it's something I've been thinking of since it all became the rage a few months ago, but we have been using AI for several years. If I think about my organization, I think two things that come to mind in this space. One is clearly, I have the highest attrition rate in the organization because I hire the most junior staff. What GenAI allows me to do is actually hire those people and then move them into more fulfilling roles, so actually reducing my attrition in the organization. I think, secondly, if you recall on my slide, I spoke around 50% of this DWP market, addressable market, is not outsourced.
If you think about that 50%, you think about all those clients who are thinking about GenAI, actually, it may push them to an outsourcing model, which actually may play into our favor and help us from a revenue perspective and actually improving our business moving forward. I think the third thing is around margin. I actually think it would be margin appreciative for us rather than depreciative, because, you know, lots of our contracts are built in such a way where the resource unit structure is they pay for a service rather than a ticket. There are three positives in my mind with GenAI.
On the free cash flow. I can't, of course, give you guidance on the 2023, 2024, whatever. The, you know, the group hasn't issued any guidance for 2023. What I can tell you, just in the way that you think about this, particularly in terms of the restructuring, as Nourdine Bihmane says, our plan, our execution plan, is to get to around 70% of the restructuring done by the end of 2024, okay? There will be a lot of the cash outlay related to that. However, there is a lag effect in the cash, okay? You know, we can book the P&L adjustment for restructuring, but there's a lag effect in the cash.
The way to think about it is there's 70% of the restructuring P&L taken, and then there's a lag effect in the cash. You know, the early part of the plan, as we, as we've been open about, is that we will have negative free cash flow, and then we will move back to positive in full year 2025 and beyond.
Okay.
Hi there, it's Laurent from Kepler Cheuvreux. I have a 3 question. The first is on the to stay on the free cash flow side, could you give us a bit more granularity on the provision that have been booked and that you will release with cash outflow? If we could have the amounts as of today and the way they will be split in the years to come. My second question is for you, Nourdine, is you have not touched a lot on competition. When you try to lift the prices, do you have competitors like DXC or others that are trying to do the same because they have profitability issues?
My last question is more global, is, when I look at the cash between the litigation, where I hope the final fine will be massively lower than EUR 570 million, the free cash flow delta of EUR 300 million, the restructuring cash, which is like EUR 100 million less, in total, this is a very significant amount. Do you still need to sell 30% of Eviden and dilute your shareholder? Thank you.
Thank you, Laurent. Let's start maybe with the last one. Today, I really wanted that event to be a Tech Foundations event. I'm sure we'll have plenty of forum to talk about the group. On that question, we'll take time. We'll need Natalie, Diane, and the team to have an answer with you on that one. I will not answer the third one. You want to take the second one, then I come back to the competition?
Yes. I can't divulge specifically how much we've taken on those account impairments in the balance sheet so far, not specifically for TF proportion, at least anyway. Within the cash flow, I think you can see within the size of the graph, right? That it's quite a significant outlay. They're spread over the coming four years, and what you see towards what you see towards full year 2026, is we still have a significant outlay. Of course, every impairment ... Depends on the contract life, depends on the commitment to the vendors, it's very variable. I'm afraid I can't be too more specific than that.
Thank you. Maybe on the competition, Clay, you want to take it?
Sure. It's an industry problem. I mean, let's start there, right? The competition are all out there looking at the same things we are, typically. But I think you need to break it down versus the labor-based TMM type of activities, particularly in TS versus managed services, and it's a bit of a different scenario. Companies that are particularly labor sensitive around TMM, honestly, typically, they have more of that protection built into their contracts in terms of being able to increase the prices like, you know, we do on terms of TNS.
However, what we've found is that going back, even in the cases where contractually we don't have an obligation, and we don't even have a right, that going back and having the conversation about what's happening with our industry, in terms of energy prices in particular, and some of the other infrastructure inflation issues that we've had, you know, we've had very good success in terms of increasing those prices. It tends not to be a competition point, to be honest, 'cause it's mostly on your install base, on your infrastructure. On new deals, it is a bit different again.
On new deals, we've all got a set of assumptions around what's happening with inflation, and all of us are pushing hard on having COLA into our new contracts, and the customers are now understanding and receptive to that. You kind of have to break it down into existing base in two portions and future business. Truthfully, I think we're probably all in a fairly similar status, but, you know, we've made real progress in the last year.
I think we had a question there. Yeah?
Hi, Laura from Morgan Stanley. I have three questions, please. The first one, I just wanted to get back to the hybrid multi-cloud, which is a new area for Atos. Could you give us more details on the momentum you're seeing there? How many clients you have, how quickly you expect to accelerate revenue there? Any more details would be great. The second question is on Digital Workplace. I think you mentioned you have to manage some headwinds in the next few years in the presentation. I don't think I got all of them. If you don't mind repeating that would be great. The last one is, you're obviously guiding to a 10% reduction in expected transformation costs. Is that expected to be spread out until 2026, or is it expected to benefit one year in particular? Thank you.
Thank you. Thank you. Well, let's start with Laurent.
Today, more or less, we are addressing a base of 800 customers. We are somewhere going through the entire list of customers and engaging with them on the conversation of move to cloud. I think, the plan is to get, you know, by end of Q1 next year, around 17-20 customers that have been migrated to the cloud already. That's the order of magnitude. It's not including the new deals, because for sure, we are in parallel, working with new potential customers, and I would say in quite each and every deal today. A new deal, you know, of hybrid cloud and infrastructure, you have a hybrid cloud component. On one end, all the new deals we will sign, you know, in the coming years, and at least short term, in the nine months to go, around 20 customers that we would migrate to the cloud.
I think for question two, there was three factors that we baked into the pricing. Firstly is the year-over-year price reductions that are in our existing contracts. The second was around the macroeconomics, which is a little more challenging to work out. Thirdly was around the known renewals, and we factored our current renewal rate. Those were the three core factors in how we looked at the growth going forward with those negative headwinds.
Okay. To answer the question on restructuring, we're keeping to the same phasing. Last year, we were still planning to do most of our restructuring, you know, around 70% in the early years. We're still keeping to that structure, so it's spread more than anything.
Yes, this is Nicolas David from Oddo BHF. I have three questions from my side as well. Thank you for sharing some information regarding the impact of generative AI, could you also share what impact did you take into your margin improvement target? Is it completely new compared to June last year, or did you already have some impact expected back then? Second topic is regarding, again, the hybrid cloud. I understand that you have hired the former CEO of Cloudreach. Does it mean that you are going to address that directly and not partner with Eviden Cloudreach? A bit of explanation would be interesting. Maybe a question regarding that is, why not putting Cloudreach inside DevCo in the first place?
My last question is, you mentioned that growing the hybrid cloud business will come with some CapEx. Could you share a target for midterm, CapEx to sales ratio, and as well, compare it to what you had in 2022 in terms of CapEx to sales? Thank you.
Good. I think I will handle quickly the first one, then I maybe distribute. As we said, I think GenAI will be a disruptive trend. We are testing it. We are seeing some use cases internally, but also with our customer. We have several projects, we could mention them. The point is-
... because of a framework, because of a regulation, because all of that, I don't want us to take yet a decision before the year end on how we are disseminating that. I think I mentioned it during the presentation, GenAI impact is not fully baked in or is not baked in into the current plan. The current plan was not to reduce job or displace or change the pyramid, thanks to GenAI. We are assessing, we are in that 12-month assessment. We are progressing pretty well, and I think once we will integrate that, we will come back in front of you and give you an update. Again, I'm picking up one example because that was the most, that was the most internal one, that was the most visible.
Think about those 400 man days that you're spending in writing a big proposal. Now, because you put in all your proposal into a proprietary data set, and you put in those LLM model on top of it, we are able to reduce the time to deliver those proposal with the customer to 60, 70 man days, which it's pretty drastic. Think about how we could revolutionize the way we are doing pre-sales in some area. Obviously, keeping at the end, the most expert, the most customized, the most creative function, which was one would not be yet integrated by GenAI. You want to maybe just mentioning some customer project, maybe for you, because I think people think about the internal application of GenAI, but let's think also about how we are delivering GenAI to our customer.
Can I take one?
Yeah, yeah.
I think, actually, that the trust factor we have with the customer is really central to this. That really strong NPS score, they're willing to dive in the deep ocean at one level with us, as long as we can provide the security, and security is really the challenge right now. A real-life example with one of the utilities that we've worked with is we took their SCADA system, so it's data that does monitoring on their power network, and we downloaded that data, and then we flushed it through generative AI, and we could simulate what was actually happening on the network without having the overlapping monitoring system on top. You could extend that. Now the challenge is the security, right? You're never gonna be able to do this now.
But you could then extend that to say, well, now we can do a whole bunch of what-if scenarios and actually turn that into an operating system as you go forward. That's just, you know, one example. The thing we're all gonna struggle with in many of those cases is the data that's used in proper operation, how do we provide the proper level of security? It's not just us providing your traditional security, but whoever the underlying generative AI partner is, them being able to provide that security. That's just a real-life example, and it was a big eye-opener for the utility, 'cause all of a sudden, they realized there's a whole new way of thinking about monitoring and issue resolution than they had previously.
Indeed. Thank you, Clay. Maybe second topic on the CapEx. I will give the floor to Darren, but just to understand the shift in our CapEx, yeah? I think it was in one of the slide, but I did not insist on it. As we are shifting the portfolio, we are shifting to also a low CapEx-intensive market. Because the other labor-intensive, I will say, business line, are taking more proportionally out of our business. As we are shifting to public cloud, now the CapEx is not sitting only on your side, it's also sitting on the hyperscaler side, yeah? While Darren is cautious in the CapEx projection, we are expecting to shift and materialize our revenue and our in our CapEx in a much more lower intense CapEx world, yeah? I'm not sure, Darren, if you want to add on it.
Indeed. As the question was, as a proportion of HCI, HCNI, our capital intensity, we're kind of moving from around 20% in full year 2022 to around 18.5% by the end of the plan. That's just against the HCNI revenue numbers, okay? That's CapEx plus lease cost for assets. Okay? It's, it's an asset number, not just a CapEx number.
Thank you. Yeah.
General?
Mm-hmm.
Four question, if I may. Sorry for that in advance. You said during the presentation that you have reduced by 100 the number of your data center, why isn't this reduction visible in the number of data center that you have? I think you, if I remember well, on my mind, you are still at 100 data center, it's a pretty stable number for years. That's my first question. The second question, you are betting a lot on your partnership with AWS. You made a lot of announcement of partnerships, sorry, with Google years ago, OneCloud years ago. What has changed on that front? My third question is about application modernization. Compared to your competitors, you've got some, let's say, competitor capable to offer both, infrastructure modernization and application modernization. Would not be the case of Atos TFCo.
No
in the setup that you have in mind. Do you think it's a structural disadvantage for you versus the one capable to do end-to-end offering on that side? My last question, it's about... Sorry, digital workplace management. One of your U.S. competitor will thought that it would be a good idea to dispose from that business because synergies with the rest are not so obvious, infrastructure management. Why don't you have you explored this optionality that could give you some leeway to finance your restructuring?
Thank you. A lot of question indeed. Maybe on the data center, but this one, if you pissed off Laurent, you will be in trouble. Laurent, please.
110 data centers in the past 10 years, in parallel, through some acquisition and some customers' contract and so on, we also got some new data centers. I think the rationalization of our data center footprint is a kind of endless game. We have now 91 data centers right now, and we plan to close another 10-15 before the end of the plan. I think what much more than the number of data centers, what is important is, you know, the capacity of the data centers. Two consideration. Number one, 70%-75% of our data centers are colocation right now, because every time we can use colocation, that's something that we do.
Number two, we are indeed reducing the total capacity of our data centers in term of floor space, but also power that we can deliver, to basically improve the utilization rate. we have a plan to significantly increase it. I would say, again, as part of the transformation, we have made, I would say, 2 major step forwards. one was one year ago, we have completely reshaped the data center footprint in France, closing three major one, Aubervilliers, Saint-Ouen, and Croissy. this year, we are finishing North America, where we are basically doing the same. We have closed three major one, which were really big flagships. overall, if you look at the capacity of our data center, it's really decreasing.
Maybe I will take the application topic. The reality, what we are seeing in the business, we have buying patterns which are different. I think everybody wants to mix it up and say, "Hey, if you do application, you do infra." What we see the reality is often application is being delivered differently, or even if it is the same RFP, you have different lot inside the RFP, which make you keep in, I will say, betting and bidding on your strength.
I think the only, the most tangible evidence of the fact that it doesn't work that way, or at least the way everybody would like to get it in mind, is look, as soon as I have been able to go in front of a customer and telling them, "This business is not dead, we're going to invest." Legacy is beautiful, and I think I mentioned that, or we heard that somewhere. The customer were happy. The customer want an infrastructure managed services. They don't want someone who is doing everything, including, you know, bringing the coffee. They want us for what we know. You know what? At the end of the day, you need to invest, and you need to invest in so much activities, so many activities. Our sweet spot for many, many years, have been to operate their infrastructure.
We are operating their infrastructure, now we need to move to engineering their infrastructure. Well, our pipeline so far has never been so high over the last three years. When the macro are deteriorating, what we are saying is the customer are looking even more for outsourcing, are looking even more for managed services. It's not application development. These are more cyclical, yeah, if you take out the tier maintenance. It's about delivering managed services across their entire environment. Coming back to your to your question. Look, Atos has never been really strong in application development. You know that from the past. We tried to compensate that with Syntel. Syntel was the first large platform, giving us a fantastic footprint in India and in the North American market, we haven't been really a strong application player.
That's why I think the rationale behind the split, or the operational split, was really to bring the right people, the right management system, the right incentive towards that buying pattern, that kind of market, and dealing with the rest with a different team, different management system, which is now the application world. Philippe will be able to give you even more than me, the application world is even shifting more drastically to the cloud, and the GenAI impact into the application world will be even more disruptive than in the managed services. I would say in a nutshell, from my personal point of view, I don't think you need to mix, you have seen my roadmap. I'm not trying to do application development later on.
I think thinking about GenAI and integrating GenAI impact into our world, like, Laurent said, infrastructure is becoming code, coding as well. I think if we could leverage those platform to automatically self-correct, self-manage, self-operate, those digital backbone, that's the future that we would like to see. Again, after 2026, from now on, until 2026, we need to get back to industry benchmark. I think your last point for you?
Could you repeat that?
Yes, it's true. I missed DWP.
Well, I think there was two elements to the question.
Mm-hmm.
One was around the disposal of DWP. Hopefully you don't have some bad news for me, given I've only come back a few months ago. No, I think if I look at DWP, there are, as I put on the slide, two elements, there's your traditional stuff, and there's the modern piece. We're obviously focusing on the modern piece because it's higher margin, higher revenue. In the future, is there some legacy things that we may look to do something with potentially? I think I'll focus on the new modern digital workplaces where we're really trying to take the business. I'll let you answer the wider question on that one.
I think, or at least it's not my plan to sell maybe the most leading practice in the world. Except if you have several billion EUR. Sorry, Leon. If you have several billion EUR, we could speak.
Thank you.
there was one on partnerships.
The partnership? The famous Dublin. Who wants to take that? Clay?
I can. So I was part of the previous activity, so you know, I've lived it well. We did see some benefit from some of those. There's no if and buts about it. I think the difference this time is we're not saying it's everybody's day job. We've got specific parts of the organization that are focused on it, and we're very clear what we want to get out of it.
In terms of additional pipeline, additional opportunities, and it's particularly strategic in terms of the hyperscalers now, because we're running to it with our, you know, our customer base, as well as the new logo base, rather than saying, "Well, we're doing it, but really we want to stay and keep all that business." It is a very fundamental shift in terms of the approach. The, you know, proof is gonna be in the pudding. You know, so far, so good, you know, with the pipeline that we have and with the customers that have committed to at least the pilot so far, and with the target base that we have for next year. You know, we'll have to update you in six months or a year's time to really show the real results.
Maybe coming back now on Brooks and Cloudreach. Cloudreach has two sides of a business. They have their managed services business, and they have the entire migration to the cloud. The entire migration to the cloud is sitting with Eviden, which was the majority of it. We believe there is an opportunity in the managed services around that hybrid cloud, and this is in that context that Brooks decided to join us. Right, guys, let's stop here and continue the discussions around lunch. Great. Well, thank you again. Thank you for coming. Thank you.