How Unisys Federal will change SAIC

Executives with both Science Applications International Corp. and Unisys Federal have touted several factors to make their case for why SAIC planned $1.2 billion acquisition of Unisys Federal makes sense, like intellectual property and people with highly sought after certifications.

But those factors are really just enablers for what could be Unisys’ crown jewel -- a commercial model for delivering IT to the federal government. This basically means everything as a service from cloud computing, cybersecurity, systems integration and application delivery.

Bob Genter, executive vice president and general manager for SAIC’s civilian markets group, told a Washington Technology Power Breakfast crowd that the commercial model will become the preferred go-to-market strategy for the company.

SAIC is already doing some of this type of work. But with Unisys Federal on board, it sounds like SAIC will be all-in with that model.

“We’ve done some of it inside of SAIC for individual customers and then we try to adjust it for the next customer, but having the repeatable model is one of the hallmarks of what we are getting from Unisys Federal,” Genter said during my Q&A with him at our latest M&A Outlook event Friday.

The shift means that customers want to focus on managing outcomes and not inputs. For SAIC, it means transitioning to more of a “push” sale of explaining and demonstrating the value of the commercial model, he said.

SAIC also has to resist reverting to traditional “solutioning” if a customer balks at the commercial model. “We don’t want it to be just one of several options,” Genter said

Unisys has been experiencing a lot of growth in the federal market with that approach and now by joining SAIC, it’ll be able to bring that model to more customers and have greater scale, said PV Puvvada, president of Unisys Federal.

“SAIC has a fantastic enterprise IT business across the spectrum of government; really cool stuff,” he told me Tuesday.

The growth opportunity will marry SAIC’s enterprise IT skills with Unisys Federal’s commercial model, Puvvada said.

“We think this is a really unique value proposition,” he said.

Part of that proposition also is the intellectual property that Unisys Federal brings with the deal. Some of that will be solely-owned by SAIC after the deal, whil some will be exclusively licensed from Unisys to SAIC. Some of that IP includes products such as CloudForte, a cloud management and automation tool; Leangov, a tool for security IT development and operations; and Trust Resilience, a cybersecurity platform.

Unisys also will bring “frameworks, methods, tools and know-how” to SAIC, Puvvada said.

The plan for integration is something that will be worked on over the next few months as the deal moves its close around May 1.

Between now and then, there will be transition planning, establishing the roles for Unisys Federal executives and a lot of change management work.

Genter and Puvvada were quick to point out that there are no assumptions of cost synergies. The companies aren’t looking to save money and reduce headcount as a way of making the math work for the acquisition.

“That was a key factor on the deal,” Puvvada said.