T-Systems SWOT and PESTLE Analysis

Strength

1. Strong Integrated Offerings: With a strong hold on digital services in Europe, T systems offers a robust integrated spectrum of offering with one-stop shopping: from the secure operation of legacy systems and classical ICT services, the transition to cloud-based services (including international networks, tailored infrastructure, platforms and software) as well as new business models and innovation projects in the Internet of Things. The company is highly focused in Delivery integration which deals with integrating delivery functions within the portfolio units, creating end to end cost transparency and clear ownership. The company through cross delivery functions plans to drive standardization, automation and tooling which ultimately leads to cost savings. The company believes that the path of digital transformation is not driven by separate systems but integrated solutions. Be it Big data, cloud solutions or other data base solutions, system integration is a crucial factor which can lead an organization onto its digital journey.

2. High Competitive position in Unified communications and collaboration: From a wide range of UCC functions like voice, video conferencing, e-mail, fax, messaging, chat and social collaboration, T systems is well positioned in Dynamic Services for Unified Communications and Dynamic Services for Collaboration. As per a market research company, Global Data has T-Systems UCC services rated as “very strong” in the global market. The UCC services provided by the company is designed both for global as well as small to mid-sized companies. As per a senior analyst from Global Data, “T-Systems is able to scale the UCC services for multinational companies with the same platforms and solutions from the private cloud”.

3. Strategic partnerships: T-Systems has extensively followed an expansion strategy through Strategic alliances and partnerships. The company has already partnered with Major IT industry players including Cisco, Microsoft, Avaya, Swyx and NFON. The company has recently partnered with British Telecom which would help it to expand its geographical presence. Recently the company also entered into an alliance with SAP to include Internet of Things (IoT) solutions for real-time logistics. T-Systems further intensified their partnership with Microsoft for SAP applications, managed services based on Microsoft Azure and Microsoft 365, digital solutions with artificial intelligence and mixed reality, solutions for the Internet of Things and extensions of Microsoft Azure to dedicated hardware.

4. Strong ranking in Digital Transformation Services & Solutions: According to analysts in ISG, T-Systems has a strong hold to face digital challenges, based on their comprehensive cloud services. With regards to the Company holding top ranking for “Intelligent Operations – Large Accounts,” the analyst form said that T-Systems offers a comprehensive cloud portfolio to meet changing customer requirements. Comprehensive services including the Internet of Things, data analytics, and cyber security the extensive partner network and attractiveness of the portfolio were some of the parameters which were considered for ranking of T-systems. T-Systems were ranked a leader in the “Large Accounts” business segment. Similarly ISG has also placed the public cloud services provided by T Systems amongst top four cloud providers amongst Microsoft, Amazon Web Services, and Sales force. They ranked Telekom and T-Systems as top providers in the area of Intelligent Business Solutions/Platform-as-a-Service.

Weakness

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Opportunity

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Threat

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Political

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Economic

1. Good Economic growth in emerging markets: As per IMF In January 2018 forecast, it is estimated that in 2017 gross domestic product (GDP) increased by 4.7 per cent in the emerging and developing countries and by 2.3 per cent in the industrialized countries. In the core markets a positive trend was observed in economic growth rates in 2017. Germany observed a growth in exports and private consumption; thus there was an increase in GDP by 2.2 per cent year-on-year. Averaging 5.7 per cent, the unemployment rate in 2017 was at its lowest level since German reunification. GDP growth rates continued to develop very positively in 2017 in virtually all countries in our Europe operating segment.

2. Not so good conditions in Labour market: Even though the national labour markets in Europe operating segment witnessed an improvement in most countries the deep recession of the last few years means that Greece continues to suffer from high structural unemployment. Due to high structural unemployment rates, there was a reduction in purchasing power among those affected and this has impacted their willingness to spend. Some customers have adapted their demand behaviour which has affected the demand in telecom as well as the ICT sector. Apart from this the low willingness to invest also had a detrimental effect on demand for telecommunications and ICT services.

3. Increasing demand for Services in telecom and ICT: As a result of continuing digitalization there is also growing demand by the industry for even more connectivity in networking machines and production sites thus tapping efficiencies in value chains. There is a demand for extensive IT and cloud solutions, as well as intelligent approaches to M2M communication (machine-to-machine). It is observed that the M2M sector alone grew by around 30 per cent in the reporting year, and this growth is unlikely to slow in the coming years. In the IT sector, it is expected that market growth will be around 5 per cent, driven primarily by the substantial increase in cloud services of around 17 per cent. The advance of digitalization and the shift towards cloud solutions led to transformation of demand in the systems integration business. There was a decline by 0.9 per cent in Traditional project business – application development and the associated integration. By contrast, there was an increase in the market for consultation and integration services for cloud solutions by 28 per cent.

Social

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Technological

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Legal

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Environmental

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