HFS Highlight: Atos bolsters crucial cybersecurity division with trio of acquisitions

It’s been almost a year since we were forced to leave our workplaces—we’re now veteran home-workers. For many businesses, this was a logistical challenge bigger than anything they’d ever faced: ensuring employees had sufficient IT equipment and transitioning the Monday morning breakfast meeting onto Zoom is no easy task. Unfortunately, that wasn’t the end of the problems; moving to a work-from-home model exposes businesses to a new array of cybersecurity threats—and many are looking towards external service providers to help protect them. Exhibit 1 shows enterprise leaders predicting the largest spending increase in cybersecurity, Atos recognized this trend, and its recent M&A activity could help it become a leading cybersecurity partner.

Exhibit 1: Cybersecurity is a leading area for investment from enterprise leaders.
Q: How do you expect Covid-19 to impact your spending on the following?

Source: HFS Research, 2020

Atos’ Big Data & Cybersecurity division reached the €1 billion revenue mark in 2019 – it’s on an impressive growth trajectory. 

If you’ve glanced at Atos’ earning announcements in recent years you might have already noticed the impressive growth it reports in its Big Data & Cybersecurity division – 17.3% YoY growth in FY2019. You would be forgiven for expecting the outbreak of COVID-19 to significantly slow down its cybersecurity business, but we already know from Exhibit 1 that enterprise leaders planned to invest in cybersecurity, and this is reflected in Atos’ continued double-digit growth in the division throughout 2020. It’s clearly a strategic growth target for Atos, and it’s also an area its experienced some success; in our 2019 Managed Security Services Top 10 we called out Atos’ strengths including its consulting abilities, industry coverage and strong customer engagement. Clearly, Atos is already performing well in the cybersecurity market, which means it’s latest spending spree will build on an already solid platform of offerings.

Atos has recently announced a trio of cybersecurity acquisitions to deepen its capabilities.

Atos is no stranger to M&A activity; we all know about the Syntel acquisition in 2018 and the DXC takeover that almost was – something HFS analysts have already discussed. Atos is building on a constant stream of acquisitions, and its latest spending spree proves that it is applying the same methodology to growing its cybersecurity business.

• SEC Consult: In October 2020, Atos announced that it reached an agreement to acquire SEC Consult Group, a cybersecurity consulting firm which boasts 200 employees. Through this acquisition, Atos will expand its footprint in Europe as well as leverage SEC Consult’s core capabilities which include penetration testing, red teaming and technical assessment services – all of which are critical components of an effective cybersecurity strategy.
• Motiv: In December 2020, Atos announced its agreement to acquire Motiv ICT Security. Motiv claims to be the largest independent managed security services provider in the Netherlands, and it offers Atos approximately 180 employees as well as the ‘Motiv Academy’ – a great investment in future cybersecurity talent. Beyond headcount, Atos will also acquire Motiv’s security operations center, which it can add to its growing network, and over a hundred of Motiv’s existing clients.
• Fidem: Opening its M&A account early in 2021, January saw Atos announce its agreement to acquire Fidem, a Canadian cybersecurity consulting firm. This acquisition will strengthen Atos’ presence in North America, where it currently earns just shy of a quarter of total company revenue, through the onboarding of 100 Fidem employees. Atos will also benefit from Fidem’s expertise in areas like cloud security, digital identity, and digital forensics, further deepening its cybersecurity capabilities.

The Bottom Line: If integrated well, Atos’ recent flurry of cybersecurity M&A activity could cement its position as a trusted cybersecurity partner.  

COVID-19 has shone the spotlight on cybersecurity, making it more important than ever for enterprises to find a trusted partner to address any vulnerabilities. Atos already had an impressive cybersecurity business, and the provider has been quietly bolstering it’s cybersecurity capabilities through this trio of acquisitions, making it an increasingly appealing partner. However, integrating any acquisition can be challenging, and even a company with Atos’ M&A track record could struggle to onboard new staff and practices from three different acquisitions without a negative impact on both efficiency and culture. But it is possible, and if done successfully this trio of solid acquisitions could seriously strengthen Atos’ cybersecurity capabilities, bringing genuine value to its clients in their time of need.