Atos may sell national security activities to French government

Among the services Atos provides for the French government are supercomputing facilities for the maintenance of France’s nuclear deterrent, and the development and maintenance of mobile IT systems to its defense forces.

Atos welcomed the offer, which it said will “protect the sovereign strategic imperatives of the French State.”

The government offer could also restore customer confidence in Atos after a year of turmoil during which, in addition to its struggle to secure funding, the company has seen a succession of CEOs come and go.

That confidence was clearly lacking in Q1 of 2024, with revenue down 2.6% compared to a year earlier, as customers delayed contract decisions or reduced the scope of work they handed to Atos. Worryingly, the decline was sharper (-3.9%) in the supposedly higher-growth Eviden half of the company’s business, which focuses on more modern IT services such as big data and digital transformation.

The legacy managed infrastructure services half of the company, Tech Foundations, also saw revenue decline, but only 1.5%. However, its book-to-bill ratio dropped to 47% from 68% a year earlier, suggesting that customers are reluctant to make long-term commitments even for the maintenance of business-critical legacy infrastructure.

After failing to sell both Tech Foundations and its big data division, Atos CEO Paul Saleh has had to create a new go-to-market plan for the combined businesses.