Swisscom's IT Business: Key Focus Areas

From a pure telco to an IT provider

Yesterday, Swisscom released its results for FY 2023. According to the report, IT services revenue grew by CHF 32 million (+2.8%), with just over one-third attributable to the acquisition of Axept Business Software. Swisscom Business Customers operates in a complex environment with very diverse markets and challenges. In the telecommunications market, the company has to defend its market share against price-aggressive competitors. In the market for IT services and digital transformation, it competes against local and international services providers.

As is the case for many other telco companies, Swisscom has been undergoing a strategic transformation from a telecommunications services provider to an ICT solutions provider that addresses the local market with well-defined key focus areas.

What are Swisscom’s digital trend topics?

Hybrid Cloud and Cyber Security

Swisscom observes a growing willingness among companies to rely on external services to manage the considerable complexity of hybrid cloud environments. The company’s portfolio includes services from Swisscom Private Cloud, Amazon Web Services (AWS), and Microsoft Azure. Moreover, the increasing complexity of hybrid cloud environments requires new security standards. Swisscom addresses this issue with its own Security Operations Center (SOC) and other managed security services. The company kept expanding offerings such as Extended Detection and Response (XDR) in 2023.

ERP

The SAP business is undoubtedly one of the key revenue drivers in the business applications sector. Swisscom’s capabilities range from SAP hosting to application management and consulting. Moreover, in November 2023, Swisscom announced that it had joined a consortium working on the successor solution to SAP’s healthcare industry solution, which will not be supported by SAP beyond 2030. According to Swisscom, the first productive pilot version for Swiss hospitals will be available by the end of 2024. Swisscom will be involved in the development and subsequent maintenance and support of the solution. In addition to the on-premises model, the new solution will be provided in SaaS mode. Regarding other business applications, the acquisition of Axept Business Software in June 2023 has strengthened Swisscom’s ERP offering for SMEs. Axept Business Software, with 180 employees spread across four Swiss offices, acts as an integration and operations partner for the Swiss SME ERP software Abacus.

Artificial Intelligence (new)

Following the launch of ChatGPT, Swisscom has seen significant demand for AI consulting and services. The company holds AI strategy workshops, implements chatbots and speech recognition solutions, and trains custom AI models. Swisscom has been using AI internally in its customer services for three years, employing an AI-enhanced Interactive Voice Response system that supports natural language understanding and sophisticated routing engines. Moreover, Swisscom aims to become a national leader in building, hosting, and deploying sovereign AI solutions. In partnership with NVIDIA, Swisscom has announced the development of trusted GenAI solutions for Swiss customers (Trusted AI Factory) and plans to invest up to CHF 100 million into AI solutions in the coming years.

What are Swisscom’s strengths?

PAC considers Swisscom well-positioned in the market. We would point out the following four differentiators:

Nr. 1 – Strong local presence and high recognition as a full-service provider in the Swiss market. It is highly appreciated and trusted as a local company with a strong network of offices and field services, customer intimacy, and a network of relevant contacts.

Nr. 2 – Access to an attractive, locally-oriented target group of small and midsize companies, which are often neglected by large international IT competitors.

Nr. 3 – Strong hybrid cloud capabilities, with data centers located in Switzerland. This is particularly relevant to customers with data security concerns.

Nr. 4 – Increasing ability to cover telco-related and net-centric topics (e.g., collaboration, big data, cloud services, IoT, AI) and deal with the increasing convergence of IT and TC.

Overall, Swisscom’s FY 2023 results underscore its robust growth trajectory. With a strong local presence, innovative offerings, and a commitment to addressing evolving market needs, Swisscom continues to position itself as a leader in the IT sector. As Swisscom invests in advanced solutions and expands its capabilities, it remains dedicated to meeting the evolving needs of its customers while maintaining its status as a trusted partner in the Swiss market.

Find more on SITSI

Would you like to find out more about the positioning, performance, and strategy of Swisscom Business Customers? Check out PAC’s Swisscom Business Customers – Vendor Profile – Worldwide on our SITSI research platform.