Unisys CEO Peter Altabef On Cloud, AI And Quantum Computing

‘When we look at what’s in our pipeline, it is increasingly filled with newer technologies. That tells us that those newer offerings, whether they're around cloud, around AI, around quantum, around digital workplace, are really getting the buyers’ attention,’ says Unisys’ Chairman and CEO Peter Altabef.

While global IT solution provider Unisys can trace its roots back to the 1873 development of the first commercially viable typewriter using the QWERTY keyboard, it is very much focused on the future.

Peter Altabef, chairman and CEO of the Blue Bell, Pa.-based company, told CRN in a recent conversation that, while Unisys has to manage a wide range of its customers’ traditional IT needs, it is investing in the future with new technologies including AI, quantum computing, and digital transformation.

“When we look at what’s in our pipeline, it is increasingly filled with newer technologies,” Altabef. “That tells us that those newer offerings, whether they're around cloud, around AI, around quantum, around digital workplace, are really getting the buyers’ attention.”

The primary focus for Unisys, which is ranked No. 36 on CRN’s 2024 Solution Provider 500, for the rest of 2024 is making expanding its artificial intelligence expertise and helping enhance customers’ cloud mobility its top priorities, Altabef said.

“Many companies have now put work on the public cloud, and they've got some work on the private cloud,” he said. “But really fine-tuning those applications and making sure that they can move data and applications to different clouds as they get better pricing and better availability from different providers, that mobility is still elusive for a lot of clients. And so over the course of this year, we want to make sure that all of our clients are fully taking advantage of that.”

Here is more from CRN’s interview with Altabef, lightly edited for clarity.

Looking over Unisys’ last fiscal year, what are some of the big highlights in terms of things that showed what Unisys can do for customers?

We have historically looked at the company through a couple of lenses. And one of the lenses is our newer offerings and whether those newer offerings are relevant in the marketplace. That doesn't mean that traditional offerings are not relevant. There's a real base of demand for and interest in those traditional offerings. And they did very well this year. But one test for any company is, are your newer offerings being successful in the marketplace, and ours are. One of the measurements that we provide is company-wide growth, but excluding what we call license and support. That tends to be lumpy because it’s mainly upfront licenses for specific software. And in some quarters or some years, that is higher or lower based on renewal cycle. These tend to be multi-year contracts. So if we exclude that kind of business, the rest of the company grew 4.9 percent year-on-year. And that is good growth given all the machinations of the technology world in 2023. And the profitability of our business is increasing, as is our cash flow. And when we look at what’s in our pipeline, it is increasingly filled with newer technologies. That tells us that those newer offerings, whether they're around cloud, around AI, around quantum, around digital workplace, are really getting the buyers’ attention.

You mentioned four newer offerings. Unisys has been working with the cloud for years. How far along is the company in terms of the other three of these newer offerings? How mature are they?

With artificial intelligence, there are a couple of different ways to consider it. One would be machine learning, or deep data learning. That has been around for a while. But the advances in machine learning and deep data have been remarkable in really the last 24 months. And then of course, you have generative AI, which many people are now familiar with. As we look across the company, one of our imperatives is not only to build generative AI, but to build all of AI into all of our offerings. Especially when you think about enterprise users, generative AI is very interesting and very helpful. But it's not the only kind of AI that is interesting and helpful. Our goal is not to have one AI product. Our goal is to make sure that AI is infused throughout our product offerings. We currently have 115 different production environments or proofs of concept concerning AI across the company. We're working really hard to make sure that it's just ordinary for us. Now, that doesn't mean that we won't have specific offerings that highlight that, and Unisys Logistics Optimization is one of those that highlights both AI and quantum. But I think the way the market is moving, you really have to say, ‘Look, AI just has to be embedded in everything you do because it adds value in everything you do.’ And that's what we're doing.

What about the digital transformation part?

Digital workplace is one of the areas where Unisys really has what I would call an outsized reputation. It represents for us anywhere given the year about 30 percent of our revenues, which is a pretty big percentage. We are now regularly being recognized throughout the industry in terms of third parties and advisors as among the absolute best in that area. What’s significant about digital workplace, which really talks about how a company’s employees benefit from the compute environment they receive—the software, hardware, the integration of data, the use of AI—how do we put this into the hands of our clients’ employees. For the absolute best platform for them to be most effective, whether they're salespeople, finance people, operators, or production, we’re very, very good. And interestingly, when you think about artificial intelligence, it's really made for that environment. Because whether it comes to using more sophisticated chatbots or the predictive nature of knowing when something is going to fail before it fails and having the replacement in place for something that fails, whether you're talking about how we react to our clients or the clients of our clients, artificial intelligence is just made for it.

And how far now has Unisys gone in terms of developing a practice around quantum computing?

There are two kinds of quantum that I think about. One is general purpose quantum, which is you just have quantum computers that can do what normal computers do, only faster. That is still, I would estimate, four years away. But for some very specific uses, there are uses. We use quantum annealing, where you can really train a quantum platform to get very specific data sets and very specific answers in a more limited fashion. It’s not asking to do quantum for everything, It's really asking to do quantum in a very specific task. That is available today, although frankly not in widespread use. There’s very, very little engineering talent that can take advantage of that. We have that engineering talent.

We have started that effort with what we call Unisys Logistics Optimization, which deals in the logistics world with moving packages around. And we have every expectation of expanding that into areas such as financial services and insurance and other areas as well. So we're very excited about our use of quantum, which obviously includes AI as well. We have finished a pilot with a client on our first application of that technology in the air cargo space. That pilot project has gone very well, and we’re moving into production with the client. The interest we have seen in that industry has been very significant, so now we're moving towards working more broadly with the industry as we have now completed the pilot.

What are your strategic priorities for 2024?

We pride ourselves on being nimble. One of the things that will be a focus of ours is artificial intelligence, especially in those areas of our portfolio that don't yet have that to the fullest extent. That includes generative AI, machine learning, deep learning, all aspects of AI. The AI trend that people really started to talk about in January of last year is not going to abate. It's very much continuing. For us, the focus will be on specific use cases that will move our clients forward. Things like the logistics solutions, advanced digital workplace.

In cloud, the industry has talked for a while about mobility in terms of moving data from one public cloud to another, or moving data and applications from a private cloud into a public cloud. Some companies have done that relatively well. But many companies have now put work on the public cloud, and they've got some work on the private cloud. But really fine-tuning those applications and making sure that they can move data and applications to different clouds as they get better pricing and better availability from different providers, that mobility is still elusive for a lot of clients. And so over the course of this year, we want to make sure that all of our clients are fully taking advantage of that.

Can you talk about maybe one or two things you think investors don't understand about Unisys?

I'll never say investors don't understand, and I don't think investors are monolithic. I will say Unisys is celebrating its 151st year later this year. And with that comes great advantages. We have an amazing patent portfolio. We've got real depth and riches in our engineering because of that. But we also have a complicated pension program. And so during the course of last year and in the fourth quarter, we reduced our pension liabilities by using money, which is what we've done historically for years, in the pension trust. So we didn't use corporate funds. And we effectively transferred some of the pension obligations to a third-party company, an insurance company. That for us is a good transaction for the company. It’s not the first time we've done it. We've been doing it for years. And it does not affect the cash on hand of the company. But it does have a GAAP accounting effect. And so how an investor wants to look at that is up to the individual investor. But I can tell you, we thought that that was a transaction that was in our best interest. We had done [things] similar to that before. [If] somebody looked at that and said, ‘Oh, well why are they doing that,’ I think we need to do a better job perhaps of explaining it. But I have no doubt that it was in our interest to do it.