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Capgemini
Company Profile

by Brady Hicks

Copyright 2021, Faulkner Information
Services. All Rights Reserved.

Docid: 00016630

Publication Date: 2106

Report Type: VENDOR

Preview

Capgemini – which is headquartered in Paris, France – is a top provider of
consulting and outsourcing services, worldwide. The firm’s professional services are
designed to maximize an organization’s business process and IT
environments,
with an emphasis on AI, Applied Innovation, Business Operations, Cloud Services,
Cybersecurity Services, Intelligent Industry, Technology Solutions, and
Transformation & Innovation. Although it has a presence in nearly 50 countries, the company’s
primary client base is in Europe. Capgemini does, however, also serve
business and government clients in North America, Africa, and the Asia Pacific
regions. This report profiles Capgemini and its recent activities.

Report Contents:

• Fast Facts
• Related Reports
• Profile
• Strategy
• Product Lines
• Activity

Fast Facts

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Name: Capgemini
Headquarters
11 rue de Tilsitt
75017 Paris France
Phone: +33 (0)1 47 54 50 00
Primary US Phone: (917) 934-8000
Fax: +33 (0)1 47 54 50 25
Web: http://www.capgemini.com/
Type of Vendor: IT Services
Founded: 1967
Service Areas: Global
Stock Symbol: CAP (Euronext, Paris); ISIN code FR0000125338

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Profile

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Capgemini, which is headquartered in Paris, France, is a global consulting, technology, outsourcing, and local
professional services firm, and is one of the largest IT consulting and services providers in
Europe. Capgemini was founded in 1967 ago to meet a regional need
for services for computer users. Today, the company employs more than 270,000 (2021)
in almost 50 countries. Of note, the firm serves
Europe, North America, Africa, and the Asia Pacific region.

Capgemini supports clients across all technology domains and
market sectors, with a particular focus on core areas such as:

• AI (artificial intelligence)
• Applied Innovation
• Business Operations
• Cloud Services
• Cybersecurity Services
• Digital Services
• Intelligent Industry
• Technology Solutions
• Transformation & Innovation

Overall Operations

Capgemini’s business focuses on:

• Strategy & Transformation consulting services grouped under
  Capgemini Invent.
• Applications & Technology core business.
• Operations & Engineering Services, including Cloud Infrastructure
  services.

Brands

Capgemini’s brands are listed in Table 1.

History & Milestone Events

Serge Kampf, a former Groupe Bull employee, founded the software
house Sogeti in 1967 in
Grenoble, France. Kampf believed that the future of the computer
industry would be in services rather
than hardware. He focused on providing computer services to companies
outside Paris. Since
then, a
slew of mergers have helped to create the modern day Capgemini.
The present incarnation of Capgemini was originally created by the consolidation of Cap Gemini and Ernst
& Young Consulting
in 2000. In 2004, the company dropped the Ernst & Young suffix from
the name and became
officially known as "Capgemini."

A brief timeline
of company history and milestone events follows.

• 1967 – Serge Kampf founds software house Sogeti in Grenoble, France.
• 1970 – Kampf opens the first branch office of Sogeti in Paris.
• 1972 – Cap Gemini Sogeti is created by merging Sogeti with two French software
  companies: CAP and Gemini.
• 1973 – Kampf changes the direction of the company, moving away from more specialized
  activities such as data entry and data processing toward that of general consulting, software,
  and technical assistance.
• 1978 – Cap Gemini Sogeti sets up a consulting team in the US and begins a series of acquisitions that leads to the formation of Cap Gemini America.
• 1981 – Cap Gemini America emerges.
• 1982 – Cap Gemini acquires a 42% stake in French competitor Sesa.
• 1988 – Cap Gemini buys the remaining stake in Sesa as part of
  its strategy to become a global
  operator.
• 1990 – Cap Gemini purchases the Hoskyns Group, the
  UK’s largest computer services company. Over the next five years, Cap Gemini
  buys 22 European and American companies for a
  total of $1.1 billion.
• 1991 – Kampf sells 34% of the company to German carmaker
  Daimler-Benz.
• 1993 – Suffers its first loss and
  decides to launch Genesis, a restructuring program that sets up seven business areas with dual
  regional and segment roles and modified product lines.
• 1995 – Enters into a deal with French chemical conglomerate
  Rhone-Poulenc, now
  Aventis.
• 1996 – Introduces its year 2000 date fixing software
  … Forges a deal with British Steel (now Corus Group).
• 1997 – Sees Daimler-Benz sell its 24% stake in the company to Compagnie
  Generale
  d’Industrie et de Participations (CGIP), now controlled by Wendel Investissement.
• 1998 – Purchases the UK finance and commerce arm of AT&T.
• 1999 – Sells its UK training division to focus its UK-based operations
  on IT services … Acquires telecommunications specialist Beechwood to further
  expand
  in the US.
• 2000 – Acquires Ernst & Young Consulting from the accounting firm
  Ernst & Young in exchange for roughly 42.7 million shares and 375 million EUR (US$11 billion)
  … Appoints names Geoff Unwin as CEO.
• 2001 – Slashes 5,400 jobs … Sees Unwin retire as
  CEO. He is succeeded by COO Paul Hermelin.
• 2002 – Sheds an additional 5,500 jobs, or 10%
  of its
  workforce. The majority of cuts stem from its telecom and financial
  services divisions … Names Alexandre Haeffner
  as COO, leading to managerial upheaval.
• 2003 – Announces the acquisition of French services firm Transiciel in an all-share
  deal.
• 2004 – Changes its name from Cap Gemini Ernst & Young to Capgemini
  … Finalizes
  its Transiciel acquisition for $435 million, resulting in the launch of its Sogeti
  Transiciel subsidiary … Reaches a 10-year, $3.5 billion business and computer consulting
  services agreement with power company TXU.
• 2005 – Divests its healthcare operations in North America to Accenture
  for $175 million. Unveils its Booster Transformation Plan, a restructuring effort aimed at
  boosting its operations in North America.
• 2006 – Divests its hardware maintenance business unit in France to Unisys.
• 2007 – Acquires Kanbay International for $1.25 billion
  … Also purchases IT consultancy Software Architects and consulting and integration services provider
  Network Consulting Group.
• 2008 – Buys Netherlands-based Getronics PinkRoccade Business
  Application Services BV (BAS BV) from KPN-owned Getronics Nederland.
• 2009 – Launches an outsourcing center in Romania …
  Starts its "Business as Unusual" program rolls out five global
  service lines.
• 2012 – Sees founder Serge Kampf retire and succeeded by
  Paul Hermelin as CEO and Chairman. Kampf remains on the Board of Directors.
• 2014 – Fills the position of CEO, Capgemini
  Government Solutions. Doug Lane, a former senior executive with AT
  Kearney and Booz Allen Hamilton, is named to succeed Douglas
  Charles, who leaves after one year.
• 2015 – Acquires New Jersey-based IGATE, thus officially
  establishing the US as Capgemini’s largest operation … Buys Euroware to bolster
  its energy strategy.
• 2016 – Teams with global automotive supplier Valeo to roll out
  “Mov’InBlue,” a mobility solution for corporate fleets and vehicle rental
  companies.
• 2017 – Acquires property and casualty insurance software and services
  provider TCube Solutions … Reaches an agreement to acquire Ciber, a
  provider of technology and IT specialist services.
• 2018 – Acquires LiquidHub to bolster its Digital and Cloud segment
  … Appoints Carole Ferrand as CFO, Patrick Nicolet as CTO, and Anirban Bose
  as Leader for its Financial Services Global Strategic business unit …
  Joins the Cybersecurity Tech Accord … Opens Security Operations Centers in
  Columbia, South Carolina and Spain … Rolls out the Smart Mobility Connect
  offering fro the automotive industry … Purchases full-service digital
  agency Doing, digital marketing firm June 21, and digital design studio
  Adaptive Lab … Acquires a 20 percent stake in Azgore, an Indosuez
  subsidiary that provides technology outsourcing services and banking
  transactions … Establishes a Group strategic initiative to expand its
  cloud-based capabilities with Amazon Web Services (AWS) … Creates the
  Capgemini Invent global business line.
• 2019 – Closes the acquisition of Leidos Cyber … Is awarded a
  three-year EC contract to set up a European Support Center for Data Sharing, in
  addition to providing related research and consulting services … Teams with
  Ecole Polytechnique and the Ecole Polytechnique Foundation to launch a new Chair
  position to focus on the implications of blockchain technology … Partners with
  IDEMIA to launch a secure IoT device-management platform … Launches its
  Perform AI portfolio … Teams with TIM Brasil to develop AI (artificial
  intelligence) and RPA (robotic process automation) projects … Notes that
  Christine Hodgson is its newest Chairperson … Expands partnership with
  Microsoft to accelerate cloud-based technology adoption and AI capabilities.
• 2020 – Teams with Audi to launch XL2 joint venture … Teams with EC3
  to conduct joint exercises for capacity building and preventative campaigns to
  enhance cybersecurity in Europe … Votes COO, Aiman Ezzat as CEO … Acquires a 98 percent stake in Altran, WhiteSky Labs, and
  Purpose, and reaches an agreement to buy Advectas  … Partners with
  Ericsson to support private network technology … Joins the Open Manufacturing
  Platform.
• 2021 – Establishes the Bleu joint venture, alongside Microsoft and
  Orange … Reinforces its existing partnership with Adobe … Unveils its
  Capgemini Engineering global business line … Acquires RXP Services … Names
  Jim Bailey as CEO, Americas Strategic Business Unit, and Olivier Sevillia as
  Group COO.

Strategy

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Recently, Capgemini unveiled its new corporate purpose, which is to work
toward "Unleashing human energy through technology for an inclusive and
sustainable future." Capgemini’s strategy is to provide "top-down" leadership and strategic
vision; as well as to ensure that it creates the proper environment for its
employees to "individually apply their creativity, experience, and expertise"
toward "developing innovative and effective solutions for their areas of
influence." The firm believes that it is important to ensure that its audiences
and activities are properly aligned; considered; and helping ensure that its
activity is anchored in a proper framework and program for implementation.

The company’s strategy focuses on six "Strategic Pillars" that both underpin
all aspects of its business and include their own strategic goals and plans.

Table 2 lists Capgemini’s six Strategic Pillars

Strengths

Capgemini is a top vendor for consulting, technology services, and digital
transformation. The company is positioned at the "forefront of innovation" in addressing
cloud, digital, and platform evolution. Capgemini’s 50-year heritage and
"deep" industry experience allows it to offer services
covering strategy and operations. In addition, Capgemini is a strong competitor
in the outsourcing marketplace, with competitive advantages that include:

• "Unprecedented" resilience and agility, reflected through economic
  performance.
• Opportunity to spur innovation through its Applied Innovation Exchange,
  a network of 21 centers located throughout the world.
• Global ecosystem of partners that includes high-profile players and
  specialized startups. Notable partners include: IBM, Microsoft, Intel, HP
  Inc, HPE, Google Cloud, Amazon Web Services, Dell EMC, GE Digital, Adobe
  Systems, CA Technologies, Oracle, Salesforce.com, SAP, SAS, and Teradata,
  among others.
• Industry-recognized studies on digital trends, notably through its
  Digital Transformation Institute, a network of dedicated research centers in
  the US, UK, and India.
• Shared business insights, with industries peers, through Expert Connect,
  its online community with more than 1,200 members.
• Ability to adjust strategy to meet fluctuating needs in a changing marketplace, as seen by
  the increased focus on financial services, risk management, and
  sustainability services.

Weaknesses

Capgemini finds itself constantly monitoring its prevention and protection
measures in light of the progression of worldwide pandemic in 2020; its top
priority is employee safety and service continuity. In addition to this
uncertainty, Capgemini faces other limitations to its effectiveness, among them:

• Operating in a crowded marketplace with many large rivals.
• The need – with 62 percent of its revenue coming from Applications &
  Technology – to
  diversify its service offerings.
• Vulnerability to market fluctuations.
• Inability to capitalize on its brand-name recognition.

Outlook

According to CEO, Aiman Ezzat, Capgemini – which experienced a "return to
organic growth" for Q1’21 – is "strongly positioned in cloud and data, the main
drivers of technology and business transformation in the years to come." In this
context, Aiman noted that "growth for 2021 should exceed the mid-point of the
targeted range." For full-year 2021, Capgemini is seeking to raise a free
organic cash flow of more than EUR1.3 billion (US$1.6 billion), with consistent
currency growth of 7-9 percent and an operating margin of 12.2-12.4 percent.

Product Lines

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Capgemini lists more than
100 services (and growing) via its Web site. Some of its top service
areas are explored in Table 3.

Competitors

• Accenture: http://www.accenture.com/
• DXC Technology:
  http://www.dxc.technology
• HPE: http://www.hpe.com/
• IBM: http://www.ibm.com/
• McKinsey & Company: http://www.mckinsey.com/
• SAIC: http://www.saic.com/
• Unisys: http://www.unisys.com/

Activity

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Mergers, Acquisitions, and Divestitures

Capgemini
completed the acquisition of RXP Services. This deal
is expected to reinforce Capgemini’s ability to provide
end-to-end digital solutions, and reinforces its strategic
partnerships with Microsoft, ServiceNow, and Salesforce. No terms were
released.

(03/29/2021)

Capgemini has entered into a AUD96 million (US$69 million)
scheme-implementation deed to acquire RXP Services. This group
has operations across Australia, and includes 550 professionals.
The transaction is expected to strengthen Capgemini’s
capabilities for digital, data, and cloud, in addition to
supporting its operations in the Asia-Pacific region. The
purchase is subject to “customary conditions,” and is expected to
close “in early 2021.”

(11/10/2020)

Products and Services

Capgemini launched
its next-gen Cyber Defense Centers software. The offering
includes expanded intelligent security analytics that use Microsoft Azure Sentinel to
continuously augment its cybersecurity. The release is based on
Capgemini’s decision to join the Microsoft Intelligent Security
Association ecosystem of ISVs (independent software vendors) and
MSSPs (managed security service providers) that have integrated
their solutions with Microsoft Security.

(04/05/2021)

Capgemini has launched the Smart Foundry, its
end-to-end DevTest environment management solution. This release
integrates the Capgemini SmartQA platform, and delivers
multi-premise, cloud-agnostic, and domain-centric testing for
application deployment.

(09/08/2020)

Alliances and Joint Ventures

Capgemini signed a
multi-year contract extension with Equinor. This
agreement, which falls within the application management area,
will see Capgemini continue to support the vendor’s
digitalization and modernization for business systems, processes,
and “ways of working” through a cloud-based operations model.

(06/16/2021)

Microsoft teamed
with Orange and Capgemini to establish a
JV company – Bleu – for delivering Microsoft Azure and 365
cloud-based services for public sector and critical
infrastructure organizations. The French partnership will focus
on promoting digital transformation for mission-critical national
operations, fostering local business ecosystem development, and
emerging “stronger” from pandemic-related restrictions.

(05/26/2021)

Adobe Systems and Capgemini reinforced their
existing partnership. This extended, three-year agreement will
focus on helping Adobe to “significantly” grow its practice,
worldwide, launch more solutions to help clients become “more
data-centric,” and create value by better understanding customer
journeys.

(04/20/2021)

Capgemini
Invent was awarded a one-year framework contract by the
European Union’s Intellectual Property Office. Under this
agreement, a Capgemini-led consortium will support the body in
providing general consultancy, audits, studies, and project
management services.

(04/20/2021)

Capgemini was
selected to serve as the strategic IT infrastructure services
provider for the UK’s Metropolitan Police Service. Under the
five-year contract, Capgemini will provide flexible and agile
services to improve user services for its 44,000 frontline
officers and staff, in turn helping improve digital interactions
with citizens.

(03/09/2021)

Capgemini and OVHcloud established a
global alliance to integrate technology. Specifically OVHcloud’s
next-gen cloud solutions will be combined with Capgemini’s “deep”
experience in data protection, security, AI (artificial
intelligence) and data analytics, applications, cloud-managed
services, and cloud native development.

(02/16/2021)

Capgemini has joined the Open Manufacturing Platform. This group, which
was founded in 2019 by Microsoft and the BMW
Group, works to help manufacturing companies accelerate
innovation at-scale through cross-industry collaboration,
knowledge- and data-sharing, and access to new technology.
Capgemini is specifically expected to lend expertise in
“Intelligent Industry, including industrial and technology
company digital transformation, with a particular focus on the
IoT Connectivity working group.

(07/07/2020)

Capgemini has entered into a
strategic alliance with BlackLine, a unified,
cloud-based software provider that focuses on automating and
controlling the financial close process. As a result of this
collaboration, Capgemini plans to extend flexibility to its
clients, helping them to move away from traditional manual
accounting processes to “modern” accounting that combines
process transformation enriched with BlackLine solutions.

(06/08/2020)

Personnel and Organizational

Capgemini unveiled
its new Capgemini Engineering global business line. This group –
which will include 52,000 engineers and scientists and have a
presence in “all major engineering hubs across the world” –
consolidates capabilities in engineering, R&D, and Capgemini’s
“deep” industry expertise and cutting-edge technology for digital
and software. The group builds on Capgemini’s Altran integration,
and will specifically focus on supporting organizations “as the
digital and physical worlds converge.”

(04/08/2021)

Capgemini
appointment Jim Bailey as CEO of its Americas Strategic Business
Unit and as a Group Executive Board Member. Bailey – who will
report to COO, Olivier Sevillia – is a former 30-year executive
with Accenture. Effective
immediately, he is part of the company, and will spend the period
through April 1, 2021 in an onboarding capacity prior to taking
on the roles.

(02/22/2021)

Capgemini
confirmed a number of group leadership appointments, effective
immediately. The designations include Michael Schulte as CEO,
Northern Europe Strategic Business Unit; Olaf Pietschner as CEO
of the Asia Pacific Strategic Business Unit; William Roze as CEO
of Capgemini’s Engineering and R&D business line; and Jeroen
Versteeg as global Chief Sales Officer.

(01/13/2021)

Capgemini launched
a new Altran 5G Lab and 5G LaaS (Lab-as-a-Service) offering for
telcos in Portugal. The Fundao facility will provide “key”
support to augment its intelligent industry offerings, provide
system-integration services, and validate solutions.

(12/14/2020)

Capgemini has unveiled its new corporate purpose:
“Unleashing human energy through technology for an inclusive and
sustainable future.” This aim, which was developed in
collaboration with “stakeholders” and employees, centers on the
idea that “technology promises progress.”

(10/12/2020)

Capgemini hired
Anne Lebel as Chief HRO and Group Executive Board Member,
effective July 20, 2020. Lebel replaces Hubert Giraud, who
transitioned to a new role within Altran. The new exec also
serves as Lead Independent Director for Nexans.

(06/24/2020)

Financials

Capgemini reported a 24 percent increase in its revenues for the three-month period ended March 31, 2021. First quarter sales totaled EUR4.3 billion (US$5.2 billion).

(05/03/2021)

Capgemini recorded
12 percent year-to-year growth in both revenues and profits for
the 2020 full-year period. Sales were EUR15.8 billion (US$19.1
billion), compared to 2019 revenues of EUR14.1 billion (US$17
billion). Earnings, meanwhile, were EUR957 million (US$1.2
billion), compared to a year-ago net income of EUR856 million
(US$1.03 billion). For the fourth quarter, meanwhile, revenues
were up 21 percent Y2Y to EUR4.3 billion (US$5.2 billion).

(02/17/2021)

Capgemini logged a
20 percent year-on-year income decline for the 2020 first half
ended June 30th. Company earnings were EUR311 million (US$370
million), which is down by 20 percent from FY19 first-half
profits of EUR388 million (US$462 million). Revenues, meanwhile,
were EUR7.6 billion (US$9 billion), marking an 8 percent
improvement over fiscal 2019 1H sales of EUR7 billion (US$8.3
billion).

(09/07/2020)

About the Author

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Brady Hicks is an
editor with Faulkner Information Services. He writes about computer and
networking hardware, software, communications networks and equipment, and the
Internet.

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