Business driven IT through Infrastructure modernisation Introduction to Tieto Cloud strategy, portfolio and vision
Agenda Intro to Tieto Managed services overview Tieto Cloud strategy Questions and discussion 2
Operating countries Tieto is the largest company in the Nordics that provides full lifecycle services in IT, as well as product development, for private and public organisations. Building on our Nordic heritage and values, we have global capabilities and a strong presence where our customers need it in the Nordics or via local delivery centres across the globe. 3
Leadership team Antti Vasara Per Johanson Håkan Dahlström Ari Järvelä Kolbjørn Haarr Product Development Services Financial Services Public, Healthcare and Welfare Manufacturing, Retail and Logistics Telecom, Media and Energy Industry Products Satu Kiiskinen Consulting and System Integration Ari Karppinen Managed Services Support functions and group management Kimmo Alkio President and CEO CFO Lasse Heinonen HR Katariina Kravi 4
Tieto s strategy, implementation 2012 Build the foundation 2013 Execute the structure and efficiency 2014 Reorienting for growth 2015 Accelerate growth portfolio Modernizing customers infra and apps Expand customer base in the Nordics Launch new cloud services Improve customer experience and quality Continue simplification and efficiency 2016+ Expand geographies Expand proven growth bets beyond the Nordics New growth bets e.g. IPR Scale growth businesses CEM, Industrial internet, MS cloud, IPR Accelerate modernization AM and Infra 5
We are investing in growth areas Big and high growth market in the Nordics by 2020 CAGR ~20%, EUR >5B CAGR ~50%, EUR >5B CAGR >4%, EUR ~1B Customer Experience Management Creating competitive advantage by excelling in our interaction with clients Industrial Internet Supporting customers business by extending from pure equipment sales to services Lifecare Leading Nordic industry solution for the healthcare and welfare sector Selected industry products: financial services, supply chain management, oil & gas Cloud services, e.g. Tieto Cloud Server and Tieto Productivity Cloud Modernization of services in application and infrastructure management 6
Modernizing IT Infrastructure Tieto Managed Services
Managed Services Overview Customer sales in 2013*: EUR 492 million EBIT margin excl. one-off items**: 4.3% Market position: #1 in Finland #2 in Sweden First deals concluded in Norway Sales by Industry Group Financial Services Public, Healthcare & Welfare Manufacturing, Retail & Logistics Telecom, Media & Energy Customer sales, EUR million 150 10 8.4 8 100 6.9 6 4.6 5.1 4 50 2 120 125 117 130 127 0 0.3 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Net of divestments and acquisitions Customer sales, adjusted EBIT, % excluding one-off items** Sales by country Finland Sweden Other *) restated according to IFRS 11 **) excluding capital gains, impairments and restructuring costs 8
Managed Services customers (Examples) Manufacturing, Retail & Logistics Public, Healthcare & Welfare Metsä Group ÅF Ahlstrom VR Stockmann Tuko Onninen ABB Wartsila Valmet Ovako Moventas Paroc SAAB AMEX HSB Volvo Cars Dekra Industrial Kesko Region Skåne City of Stockholm Finnish Transport Safety Agency Landstinget Västernorrland Construction Establishment of Finnish Defence Administration (Fi) Finnish Tax Administration E-Hälsomyndigheten Haninge Kommun Sollentuna Kommun Jämtlands Läns Landsting Svensk Bilprovning Nacka Kommun Aditro Södertälje Kommun Medi-IT Sitra Financial Services Telecom, Media & Energy OP-Pohjola If P&C Insurance Folksam LähiTapiola Ilmarinen Automatia Länsförsäkringar Swedbank Entercard Varma Mandatum Life Fora Elo Etera SBAB Euroclear Aktia SEB Veritas Nordea Finance Danske Bank Cerdo TeliaSonera Telenor Sanoma MTG Stampen Fonecta YLEISRADIO Alma Media Fortum Otava MTV Talentum Helsingin Energia Teboil 9
Managed Services Organisation Ari Karppinen Financial Services Mika Tuohimetsä Public Healthcare Welfare Inger Ekman Manufacturing Retail Logistics Pyry Virrantaus Telecom Media Energy Kaj Alm (as of Oct 13) Customer focus Customization Add on services Quality Consulting, Project management and Sales support Mikael Jupiter Shared Infra Services Martin Kallenbach (acting) Management and Support Infra consulting, IT transformations, Program management Efficiency Standardization Innovation Offerings Co-ordination Guidance 10
People, competencies and global delivery People and Competencies ~3100 people within Managed Services organisation Program & project managers 4% Business & IT Consultants 4% Tieto Data Centre locations Helsinki Stockholm Moscow ERP & DB Specialists 7% Architects 15% Customer Support and SD specialists 15% Technical Specialists 55% Tieto Delivery Centres for infra services Ostrava, Czech Republic Pune, India Tallinn, Estonia All Tieto MS sites are ISO 27001 certified 11
Intro to Tieto Cloud
Cloud drives customer demand - Tieto Cloud services growing faster than market IT services market Appr. 2 5% Over 20% Emerging services 2012-2013 2012 - Tieto introduces first cloud services 2013 Cloud revenues close to 20 m 2014-2015 Infrastructure modernizations and new innovation are driving demand Tieto expects to grow its cloud services faster than the market 2012 2015 2020 Over -5% Traditional offerings By 2020 ~80% of Managed Services customers will be transformed to private and public cloud services 13
Major cloud contracts: 2013 2014 City of Stockholm Infra modernization and cloud Cargotec Tieto Cloud Server Metso and Valmet IT capacity services / scalable cloud services Nacka municipality Outsourcing extension Wärtsilä Dynamic SAP landscape Metsä Group Mill-in-a-box server virtualization OP-Pohjola and Ilmarinen Operating services IF Tieto Cloud Server Borregaard IT environment / private cloud solutions ÅF Group Global IT platform Almi IT support / Tieto Cloud Server Finnish government Government cloud Kesko Full lifecycle IT services Outokumpu ICT infrastructure / cloud capacity 14
Selected customer cases Ability to adjust capacity in response to fluctuations in demand Reduce time to market Driving business change with IT transformation Improve cost efficiency of IT services Centralized IT delivery and operations Scalable ERP platform according to usage and needs Moving legacy IT to private cloud - Tieto Cloud Server will replace both virtual and physical server capacity Renewal of entire IT environment, with hundreds of applications & over 1000 servers. Harmonizing IT to adapt to changing business needs - Up to 30% cut on IT operating costs anticipated. 15
Industrialized operating model benefit our customers: Superior User Experience - Cost Advantage - High Quality services Vertical Industry cloud offering development Service portfolio management, strategy and governance Investment in innovation and new services Supplier management Public cloud operations Private cloud operations Customer service support New real-time service channel experience Traditional IT operations Automation of traditional IT services Service bus MS Management system Common services integration gateway for unified access to new services and innovation 16
Managed Services goal is to provide an excellent customer experience combined with fully automated delivery. We will be the leading enterprise cloud provider in Nordics. 17
Tieto Cloud strategy and vision
Our 2020 offering vision: We are living in a world of ecosystems 2020 Digital market places are creating new economy Fast moving organizations will gain competitive edge by aggregating services and information by efficient use of ecosystems Everything is connected via cloud Ecosystems are global networks of services, apps and information centered around consumers and organizations Successful enterprises belong to an ecosystem Enterprises are producers and consumers of digital services interlinked in ecosystems
Our 2020 offering vision: Tieto is a strong regional ecosystem partner 2020 Digital market places are creating new economy Tieto is a trusted transformation partner in digital business Everything is connected via cloud Tieto provides easy access to platforms, business engines and life cycle solutions for cloud To survive enterprises must belong to an ecosystem Tieto is the largest cloud broker in the Nordics, and provides aggregated digital services to its customers
Positioning Managed Services cloud offerings Cloud Service Providers Largest customer base in the Nordic markets for managed services Cloud Consultants & Strategists Cloud Service Brokers Managed Services Hybrid Private Public Capability to integrate legacy and new cloud and execute the transformation Cloud Transformation consulting Most advanced Infrastructure as a Service offerings 21
Government Cloud Financial Cloud* Manufacturing Cloud* Media Cloud Healthcare Cloud Managed Services Offering Portfolio Elements Digital Engagement Cloud Mobility Big Data Social business Internet of Things New disrupting business models Ecosystems Transformation Automation End User Experience Takes care of our customers end users Application Infrastructure Innovation platform for our customers Real-time Capacity Cloud processing and storage capacity *) Industry Clouds under development
Our cloud offering vision and roadmap 2017-2016 Cloud exchange 2014 Introducing Industry specific clouds 2015 Enterprise Cloud orchestration Cloud open ecosystems and brokerage Launching Ecosystem thinking Enabling ecosystem capabilities Tieto is leading cloud broker in the Nordics
Real Time Capacity Tieto Services Ecosystem Services Application Infrastructure Service Enablement End User Experience Enabling ecosystem capabilities is critical! Application Application Application Application Industry Solutions Horizontal Solutions Intelligent Access and User Rights Bridge Marketplace and Service Channel Service Provisioning and Integration Service Optimization and Performance Management Application Lifecycle Management Platform Infra Provider Service Provider Data Broker Application Platform Integration Platform Database Platform Analytics Platform Security Platform CX Platform PaaS Apps Sold Devices Network Capacity Storage Capacity Computing Capacity IaaS Support Procured 24
Tieto Cloud Offerings
New innovation creating value for our customers Co-innovation with customer Tieto Enterprise Cloud Orchestrator Enterprise ready PaaS enabling digitalization Speed up service innovation and provisioning Enable customers to achieve faster time to market for new products Delivered through secure private cloud Tieto Industry Clouds Tieto s own innovation Cloud services based on specific industry requirements (security, compliance, jurisdiction...) Lower entry barriers to cloud for a specific industry Examples Government Cloud Financial Cloud Manufacturing Cloud Innovation together with partners SAP HANA on Cloud Enables Real-time Business Analytics to accelerate business performance Forerunner in the Nordics for providing SAP HANA on the cloud Tieto Productivity Cloud with Microsoft One of the world s biggest hybrid clouds on Microsoft technology Recognized, supported and appraised by Microsoft 26
Most comprehensive cloud portfolio in the Nordics Sharepoint PaaS Tieto Dynamic SAP Landscape Big Data as a Service Tieto Cloud Server Workspace Services Tieto Productivity Cloud (Share point, exchange, Lync etc) 27
Tieto Managed Services Offering Portfolio Datacenter, Cloud and Capacity Services Enterprise Cloud and Security Platform Services ERP and Database Services Microsoft and Productivity Platform Services Workspace Services Google Enterprise Services Customer Service Desk Fast, flexible and certifiably secure capacity, providing business continuity, agility and high operational efiiciency. Enabling shortened time-to-market of applications with superior quality and security. Scalable, flexible cloud platforms to run high critical enterprise applications. Ready-made services and solutions based on the latest Microsoft productivity technology. A comprehensive set of tools to improve the way you work, wherever you choose to do it. A complete set of enterprise tools for communication and collaboration, designed for individual use and fitted for business. Professional, highquality customer service desk for efficient support and best service experience. Examples Tieto Cloud Server (TCS) Tieto Cloud Server On-Site IBM AIX cloud capacity (ITAP) Enterprise Application Platforms aas Big Data and Analytic Platforms as services Security as a Service (SeCaaS) SAP Dynamic Landscape Database Platform as a Service Tieto Productivity Cloud (TPC) Sharepoint Lync Exchange/mail Virtualized Workspace Services Tieto Mobile Storage Device Management Services Google Enterprise Apps Google Enterprise Search 24/7 native language support 28
Tieto Cloud Server An innovative service combining the best features of public and private cloud Speed Simplicity Security Integration Care Tieto Corporation
Tieto Cloud Server is 1 A private cloud with continuity, speed and reduced costs 2 A solution that anyone can order, not just the IT department 3 A pay as you use service 4 5 Signed in 15 seconds, first time boarding in 15 days, running in 15 minutes Operated from local secure and energy efficient datacenters Tieto Corporation
Tieto Cloud Server in numbers 2000 Server up and running 5000 Server in pipeline x2 30 Product revenue is doubled every 8 th month Over 30 customers Superb media response since launch In November 2013 Tieto Corporation
Tieto Cloud Server Common to all cases Built on experience and customer needs A growing product in a growing market Attractive price and easy to calculate ROI Multivendor strategies, easy to board & easy to leave Tieto Corporation
Tieto Productivity Cloud - The tools you know, delivered the way you need Productivity, CRM, Big data, BI, Office all the enterprise Microsoft solutions you know and are familiar with, delivered from the most advanced, flexible and secure cloud solution available. Delivered the way you need it private, hybrid and/or Microsoft cloud. 2013 Tieto Corporation
How to get the best from the cloud? Full Hybrid Cloud Solution Data in legacy systems and privately hosted cloud. Secure connection A private cloud hosted in Tieto Data Centre Secure connection Microsoft Public Cloud with consumer grade experience. Tieto Productivity Cloud Tieto offers the most advanced private cloud platform, fully integrated with your legacy systems and Microsoft's cloud. 2013 Tieto Corporation
Best fit for your business Example scenario SharePoint Farm Business application Active Directory (AD) TWS Active Directory (AD) Exchange SharePoint Farm Dynamics CRM Lync BizTalk Active Directory (AD) Exchange On PREM Customer dedicated Private Cloud Azure O365 Tieto Productivity Cloud Put the services you need in the right place for you all accessible via Single Sign On 2013 Tieto Corporation
Tieto Managed Services in numbers running on Energized Workspace, delivered on all continents largest private cloud worldwide, based on Microsoft technology = Tieto Productivity Cloud already using cloud solutions Estimated annual growth in cloud infrastructure business for coming years Cloud Server delivered in close to 30 countries of IT experience in different industries Tieto s commitment to automation, competence and innovation during 2014 5 000 Servers moved to cloud Data centres, safe and green in the Nordics Tieto will double its cloud revenue every year Largest IT services company in the Nordics 36
Differentiation through new innovative services Leading cloud portfolio and services Established vision and roadmap in combination with private/hybrid cloud services Transformation services and change expertise Innovation together with partners and customers Over 90 cloud customers, cannibalizing our own legacy, business beneficial for both us and our customers Global delivery capabilities with local presence Cost efficient global and local delivery capabilities and models Data stored locally in Finland and Sweden in Tieto data centers (applies to private cloud services) Security levels and services meeting Industry and Governmental requirements Strong Customer relationship and loyalty Long-lasting relationship and industry knowledge Customer loyalty and customer satisfaction up in 3 consecutive years - 2014 overall results up 5% - Sweden up 12%, 12% increase in Tieto's proactivity *) 37
Our promise We help our customers to bridge their legacy IT with private and public cloud in a hybrid model Enterprise ready and secure in a simple way. 38
Changing perspectives