FTS Visit 09 Highlights
- The strategy is based on moving to offering busines and infrastructure service and Cloud Computing
- FTS has taken over from FCS but has not merged with Fujitsu Services
- FTS has engaged in major restructuring – especially in hiring services staff
- The Augsburg plant will shift in status away from manufacturing towards data centre hosting
- The newly announce global alliance with NetApp is the first Tight Alliance, but is pre-dated by close relationships with other vendors
- As yet there is no ‘One Fujitsu’ for European Enterprise customers
A few weeks ago I had the opportunity to attend Visit 09 – primarily a user event for customers of Fujitsu Technology Solutions/FST (Fujitsu Siemens/FSC as was). As an annex to the main event the company held an analyst briefing. It was an opportunity to listen to Kai Flore (CEO) and his senior management team address their strategy and priorities for the future. I’ve covered Fujitsu a number of times in the past year, talking about the sale of the hard disk business to Toshiba and SDK, its latest financial results and its outsourcing deal with Pfandbriefbank.
Is This Really ‘One Fujitsu’?
A couple of times executives would talk about there being ‘one Fujitsu’. Indeed the decision to buy Siemens out of its half of Fujitsu Siemens (completed on April 1st 2009 for €450m) indicated a strong move in this direction. I was surprised that there have not yet been moves to integrate FTS and Fujitsu Services together. In fact I also had a great meeting with Fujitsu Software, which reports directly to Japan. I also discovered that the cross-licensing agreement with Sun (soon to be Oracle) is now for Japan only, leaving other country operations to set up partnership agreements, which FTS has done. So – from my perspective – simplifying Fujitsu as a single brand is ‘work in process’. Clearly it will integrate the German-based FTS and UK-based Fujitsu Services together at some time in the future. If done successfully it could play a much stronger role in EMEA.
FTS Embraces Dynamic Infrastructures, Application And Business Services
In his keynote presentation Kai Flore talked about the development of FTS’s portfolio over time from a products and services company. In the current phase it has added Infrastructure. Its new offerings include ‘Infrastructure as a Service’, where a customer buys equipment which is run within in a Fujitsu data centre. TDS is a hosting company owned by Fujitsu, which offers these services. It also includes ‘Managed Infrastructure’, where it is one of the first vendors to offer a ‘Managed Workplace for Windows 7′. The aim is to arrive at a phase – described as ‘Dynamic Infrastructures’ in which the company offers Application Services and Business Services. Again he sees these as additional (as opposed to replacement) businesses.
In many ways FTS shares a vision with its large American competitors. IBM, HP and CISCO and others have also chosen to develop and describe Enterprise IT architectures within their major corporate strategies. In my view the difference in FTS’s case is that it has a more literal interpretation of the components. A number of years ago it launched Flexframe, which was an integrated solution combining hardware with SAP software. Similarly when it talks about working with SAP in Business Intelligence and with Siemens (despite the recent divorce) in Health and Automotive sectors, I’m sure its solutions will also be closely defined at the component level. It retains an engineering approach to the industry eclipsed by marketing in many large suppliers.
FTS Reduces Emphasise On Germany, Consumers And PCs
I remember visiting the Augsburg plant a few years ago to see Fujitsu-Siemens manufacturing PCs and other hardware products. It had chosen a role as a European supplier making PCs in Europe and expanded optimistically into the consumer market. It admits it has been losing market share in the single PC marketplace in the last year. Flore also that it is increasingly difficult to ‘play the PC game’ when 50% of the company’s 75k employees are in the services area. It still needs clients in its offerings, but will no longer be a box-shifting company. It is about to launch a totally virtual client tagged the ‘Zero Client’. In doing so it will shift its emphasis away from Germany, consumers and PCs – well at least physical ones.
The Augsburg Plant Will Become Europe’s Largest Data Centre To House Cloud Computing
Keen readers of my posts will have read my analysis of NGD’s new Cloud Computing data centre hosting facility in Wales. In his presentation Flore indicated that one new role for the Augsburg plant will be as Europe’s largest data centre, although it will also continue to manufacture computers. If successful in selling its Dynamic Infrastructures services FST looks likely to centre its Cloud Computing hosting services here. He was very keen to dispel rumours that the plant might be closed saying it ‘will be alive in the next few years’ and it is ‘quite clear we need this factory’. For me it seems likely that FTS will employ less people in Augsburg than before. In Wales, even if fully occupied, NGD’s facilities will employ hundreds, rather than the thousands that were expected when the building was being built for microprocessor manufacturing.
FTS Believes In ‘Tight Alliances’ Rather Than Building Everything Itself
FTS has not engaged in a massive acquisition strategy in the manner of large American suppliers (HP alone has spent around $8b buying companies for its software portfolio). Flore admits the company ‘cannot do it alone’. Instead it has based its approach on what it describes as ‘Tight Alliances’. In fact this strong partnerships are nothing new – both SAP and EMC had a special relationships with FSC a long time ago. NetApp is the first current example, although the partnership goes back 10 years. The two companies have now signed a global agreement, which will see NetApp’s storage and storage management products used as key components for FTS Infrastructure developments.
Some Conclusions- Expect More Changes In The Next Year
I believe it will be difficult for FTS to move from its status as a product and services company merely through partnerships. I also think that it is unlikely that Fujitsu will continue to operate with two different organisations addressing Enterprise customers in Europe for much longer. We saw earlier how the addition of revenue from acquiring Siemens’s stake had bolstered Fujitsu’s revenues in EMEA, but unfortunately FTS does not publish its own financial results – so it isn’t easy to calculate for FTS stacks up against other suppliers.
However it is refreshing to see an organisation based on a more practical approach to the market – where architectures give way to specific solutions and global agreements are made to build specific solutions.