TBR                                      T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .                      ...
TBRsake of playing in markets” as it had prior, which led the company into financial turmoil for quite some time. Wealso b...
TBRUnisys views the market as having four distinct segments and addresses each one differently to best meetcustomer needs:...
TBRprogram. Key features of its end-user support model for its mobility solutions include 10 minute or less resolutiontime...
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Tbr ep unisys_day_2012


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Tbr ep unisys_day_2012

  1. 1. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . TBR EVENT PERSPECTIVE Unisys is back in the game and positioning for profitable growth over the long term Unisys Day for Advisors & Analysts Dallas, June 20 - 21, 2012 Authors: Ramunas Svarcas, Senior Analyst, Professional Services Practice (ramunas.svarcas@tbri.com) Cassandra Mooshian, Analyst, Professional Services Practice (cassandra.mooshian@tbri.com)TBR PerspectiveUnisys is positioning for growth after five consecutive years of quarterly revenue declines from 2006 to 2011. Thecompany has realized three consecutive calendar years of operating profitability and free cash flow generationwhile reducing its debt by 75%, or $911 million. The company made a strategic turnaround, shifting away from amindset of bringing in revenue dollars by entering key growth markets without the resources to back itself up.Unisys is now focusing on its core competencies (data center transformation, outsourcing, applicationmodernization and security) to bring in profitable revenue dollars over the long term. To spread the message thatUnisys is back in the game, TBR believes work is needed on Unisys’ marketing and branding activities on a globallevel. Although Unisys is taking strides to once again become a viable IT services vendor, customers, stakeholdersand businesses around the world are largely unaware of such efforts. Even as analysts, prior to Unisys day we wereuninformed of the company’s newest strategies and initiatives.Event OverviewTBR analysts attended Unisys’ 2012 Analyst and Advisor Day on June 20-21, 2012 in Dallas, hosted by RonFrankenfeld, SVP and president of Unisys’ Global Managed Services division. This was the first event of its kind forUnisys under Chairman and CEO Ed Coleman, who took office in October 2008, indicating to TBR that Unisys’performance has turned around and that the outlook is more positive for the company.Day One: NetworkingUpon arrival, TBR analysts had a one-on-one meeting with Unisys CFO Janet Haugen, during which sheunderscored the importance the company has placed on not just bringing in revenue dollars, but bringing inprofitable revenue dollars. As such, though growth has not been consistent, she is pleased with the performance ofthe company, as it has been able to retain margins and invest in the areas of Unisys’ core competencies (i.e. datacenter transformation, outsourcing, application modernization and security), rather than “play in markets for the www.tbri.com
  2. 2. TBRsake of playing in markets” as it had prior, which led the company into financial turmoil for quite some time. Wealso believe Unisys’ partner programs are vital to its success, given the company’s strategic approach of leveraginginternal resources in its areas of strength and looking elsewhere to leverage capabilities in areas of technology itisn’t as well versed in, such as software IP. Haugen also iterated to TBR analysts that Unisys seeks a top spot in thesecond tier of IT services vendors, recognizing it does not have the breadth of resources or size of its tier onepeers, namely HP Services, IBM Global Services and Accenture.A reception on the first day allowed analysts, advisors, customers and Unisys executives to network. During thistime, TBR analysts, along with many others, met CEO Ed Coleman and President of Global Transportation at UnisysOlivier Houri, and had insightful conversations as to the company’s performance in one of its largest verticals,transportation. We spoke with Unisys’ newly appointed Chief Marketing Officer Quincy Allen and he agreed thatfor Unisys to become more top of mind for customers and prospects around the globe, it must ramp up itsmarketing and branding. We believe enterprise and public sector companies want to know the entirety of productand service announcements coming from the company and that the company is paving the way for long-term,sustainable and profitable growth. The reception was a great opportunity for our analysts to obtain perspectivefrom many stakeholders of Unisys, namely the customers and executives.Day Two: Offerings, customer panels and executive presentationsDay two kicked off with welcoming remarks from Frankenfeld, followed by a strategic overview from Coleman anda corporate update from Haugen. The bulk of the morning was spent on the company’s People Computingportfolio and strategy. The purpose of Unisys’ People Computing portfolio is to “take a look at how a ‘peopleperspective’ can help increase productivity, simplify computing and optimize your infrastructure.” Unisys’ PeopleComputing portfolio addresses the concerns of end users, business leaders and IT leaders by doing away with thetypical, more fragmented approach of people from process and technology and “put[ing] people first” as“processes and technology are here to assist people, not the other way around.” Unisys anticipates that whencustomers adopt its People Computing solutions, they will experience a 15% increase in customer satisfaction, 35%increase in productivity gains and a 50% decline in the volume of tech support instances. An example of acustomer success story for Unisys’ People Computing solution set is Starbucks. Unisys and Starbucks partnered toenable the coffee giant to leverage a single platform for growth across the globe by leveraging IT for a “store-in-a-box” that provides a pre-packaged IT platform that can easily be installed into any of the Starbucks locations.Unisys’ customers, the “most important people in the room,” according to Frankenfeld, were highlighted at theevent. Customers had the opportunity to speak, whether in a roundtable (AARP, ISA, Texas WorkforceCommission) or in a client case study for datacenter and cloud (FlowServe, California State University and Imation).The FlowServe representative highlighted the faster-than-anticipated shift of its 12,500 people to Microsoft Office2010 by Unisys within one month’s time. For more than 12 years, CSU has leveraged Unisys to host its datacenters,which support its 23 schools and 400,000 students, and claims better service from Unisys “than where we camefrom.” Imation has observed cost savings as a result of choosing Unisys. Though customers in the roundtable hadpositive things to say about Unisys, they were open to discussing issues they have had in the past with thecompany. The representative from ISA, based in Colombia, indicated there were culture issues in the beginningstages of the two companies working together; Unisys, however, now supports 21 different languages. At AARP,there were issues when switching to a new platform, which led to a significant increase in volume of service deskcalls. Though at first TWC was unhappy when Unisys moved its call center from Texas to New York, the customerregained confidence in the company as the head of the Texas call center was also moved to New York to maintainexisting customer relationships and help smooth the transition to the new location.Go-to-market strategy: “Focus on what we are good at; [we] don’t want to chase something wehave no chance with”Unisys’ go-to-market strategy was underscored throughout each executive presentation, but no one spoke moreabout it than Jim Doyle, VP Global Sales, Global Managed Services. In an applications outsourcing breakout session,Doyle communicated Unisys’ strategy to stick to its areas of core competency, making it clear that Unisys wasbetter off partnering to leverage best-of-breed software IP and integrate it into Unisys solutions. www.tbri.com
  3. 3. TBRUnisys views the market as having four distinct segments and addresses each one differently to best meetcustomer needs:  Large global organizations: multisourcing or selective sourcing environments  Midcap multinationals: enterprise computing, application support, end-user services, application outsourcing, mobile device support  Tier 1 Nationals/Public sector: enterprise computing, application support, end-user services  OEMs: global end-user servicesResource managementUnisys continues to build its low-cost employee base in emerging markets, as evidenced by 2011 recruiting inIndia, where more than 40% of new hires were freshers. Unisys will continue to expand its low-cost headcount inBrazil, China and Hungary to support its strategy of leveraging offshore, local employees to address demand inlocal and global markets. The company is holding its services headcount steady at 21,500 employees while shiftingthe mix to 30% at offshore locations, up significantly from 16% in 2008. Further offshore development will bringthis percentage closer to the peer group average of 35% to 40%, but TBR believes Unisys’ heavy exposure to thepublic sector limits the firm’s ability to leverage low-cost labor.A significant refresh has taken place at Unisys and is still being carried out, and that is a 27% sales force refresh.The company is shifting toward a more consultative selling atmosphere, and as such, Unisys acquired more flexibleresources that are able to sell the breadth and depth of Unisys’ portfolio, rather than concentrating on one keyoffering or solution at a time. Customers are looking for integrated solutions that can address their IT needs at arelatively low price point, and a way to meet that demand is to sell a set instead of parts, indicating the sales forceneeds to be educated on Unisys’ portfolio to offer solutions that meet the mission-critical, individual needs of eachcustomer. Along with education, TBR believes the new sales force must think outside of the box and bring new andinnovative ideas and resolutions to the table each time they interact with a potential or existing customer. As ofJune 2012, Unisys has won an average of one new logo per month for the past four consecutive years whileremaining committed to its existing clientele.Key Announcements, Impact and OpportunitiesAlongside corporate and strategic announcements at the event, Unisys discussed its portfolios around disruptivetechnologies, such as cloud, applications and mobility. The most recent portfolio upgrade is around the company’smobility and end-user services, announced just days before the conference (more details around theannouncements can be found at www.unisys.com). TBR believes these portfolio upgrades increase Unisys’competitiveness in the marketplace, and given the company’s approach of admitting its areas of lesser strength,we believe the company’s strategic plan is one that is realistic and attainable.People ComputingUnisys’ People Computing portfolio is comprised of MyWork Services, Integrated Service Management andInfrastructure Services, and touts both predictive and proactive analytics. Within each of these building blocks ofthe portfolio are the following:  MyWork Services: Mobility, analytics and support for end-user computing  IT Service Management: Application management, monitoring, analytics and service desk management  Infrastructure Services: Datacenter, storage, network, cloud and securityMobility and End UserUnisys’ mobility solutions feature assessment services, mobile device management and end-user experiencemonitoring, user authentication and mobility application services. The company has three Global Mobility Centersof Excellence (CoE) worldwide, in St. Louis, Madrid and India. Unisys remains committed to its mobility portfolioand end users, so much so that the company is in the middle of a three-year internal mobile device management www.tbri.com
  4. 4. TBRprogram. Key features of its end-user support model for its mobility solutions include 10 minute or less resolutiontimes, end-to-end support and the recognition that one size does not fit all in IT.Cloud Computing and Industry SaaSIn the cloud computing arena, Unisys skipped the step of offering end-to-end cloud-related services, such asadvisory, planning, design, implementation, operations and management for only private clouds, and rather offersa comprehensive list of solutions for “Hybrid Enterprises,” encompassing both private and public clouds. TheUnisys Cloud Services framework emphasizes an open environment, embraces a multivendor-agnostic approachand is client-centric, which TBR believes is an extension of people computing in the cloud space, with Unisysmodifying its cloud services platforms and solutions to address specific client needs.Unisys’ SaaS portfolio is not extensively developed. During the conference, the company’s cloud experts explainedin detail its Logistics SaaS offerings, which are the gems in Unisys’ portfolio. The Logistics Management System(LMS), Cargo Portal Service (CPS) and In-transit Service Manager (ISM) are sophisticated management systemsavailable to ground handlers and low-cost carriers and are utilized by some of the largest air cargo carriers in theworld. They are browser-based and delivered through a SaaS delivery model. In the future, Unisys will roll outadditional services in the SaaS market, developed by leveraging business innovation through collaboration with thegoal of everything on a pay-per-use basis.Applications OutsourcingWith more than 4,200 applications professionals across the globe, Unisys continues to develop and expand itsapplications outsourcing portfolio. A key driver of the company’s success in the arena is strategic partnering.Unisys teams with key software players that offer best-of-breed solutions to integrate into Unisys offerings andpush to market. Such software players include SAP, Oracle and PeopleSoft. Rather than compete in the SI spacewith strong players like Accenture, Unisys is looking to its customers to move them up the stack instead ofcompeting for new logos. The company is leveraging repeatable models to win deals within industries, as seen withrecent wins in the U.S. and Colombia with Fannie Mae and Bancolombia, respectively.Technology Business Research, Inc. is a leading independent technology market research and consulting firmspecializing in the business and financial analyses of hardware, software, networking equipment, wireless, portaland professional services vendors. Serving a global clientele, TBR provides timely and accurate market research andbusiness intelligence in a format that is uniquely tailored to clients’ needs. TBR analysts are available to furtheraddress client-specific issues or information needs on an inquiry or proprietary consulting basis.TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com.©2012 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other publicsources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable orresponsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is notand should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value,purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact TechnologyBusiness Research, Inc. for permission to reproduce. www.tbri.com