Paris, France-based Atos SA and Dallas, Texas-based Perot Systems Corp have entered a cross-Atlantic collaboration which they hope will make them more attractive to multinational buyers of IT services.
Central to the agreement is the increased geographical reach afforded by the collaboration. Perot Systems’ strongest presence is in North America, the UK and Switzerland while Atos is most influential in France, Germany and Italy. By gaining access to each other’s services infrastructure, the two companies believe they will be able to compete more effectively for contracts with large multinational companies that are demanding global capabilities from service providers.
Bernard Bourigeaud, chairman and CEO of Atos, said he first approached Perot Systems with the proposal around a year ago. Certainly, both Perot and Atos needed to do something to increase their global competitiveness and the tie-up seems sensible given the synergies between the two companies.
First off, they are of a very similar size. Atos recorded 1998 revenues of around $1.1bn compared with Perot’s $994m. Second, they both offer similar services, including systems integration and outsourcing. Atos also stands to gain from access to Perot’s consultancy business. Both companies are hoping the arrangement will help them compete more effectively for e-commerce and internet projects although this will not be easy given the pre-eminence of IBM Global Services in this arena.
While the agreement would seem to be well timed, there must be some doubt that it goes far enough. Although it is true that multinationals want global service capabilities they are also increasingly looking to buy those services from a single source. The arrangement, in its current form, fails to achieve this.
The obvious path would be for Atos and Perot to follow the lead of Getronics and Wang Global and merge. However, Bourigeaud dismissed suggestions that the agreement marked the first move towards a future merger, arguing that mergers were hard to implement successfully. Despite this, David Cohen, managing director of Perot Systems in Europe, emphasized that the partnership amounts to more than simply a sub-contracting agreement and will include joint marketing and joint delivery of projects.
