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Posted by Dan Bieler on June 11, 2013
Dan Bieler, Chris Mines, John McCarthy
Ten days ago, three of us traveled to Japan for a Fujitsu analyst day held in conjunction with the firm’s huge customer event – the Fujitsu Forum. The analyst day was a follow-on from the firm’s European event last fall. At the two events, the management team, led by Masami Yamamoto, president and representative director, and Rod Vawdrey, the president of Fujitsu’s International Business, talked about the organization’s vision and key imperatives:
Fujitsu Needs To Go External and Address Fundamental Industry Shifts
While the company deserves credit for its vision and internal changes, there are four key external changes that it will also need to address over the next 24 months if the firm is going to be a competitive global technology supplier:
Fujitsu clearly brings a broad array of assets and skills to the table. However, despite the progress that we saw at the Forum, like deploying cloud store across Europe and introducing backup-as-a-service, we feel that the company has not yet developed a true sense of urgency that will be required to defend and expand its position in a rapidly changing market environment. Fujitsu is aiming to cover a too-wide portfolio of geographies and product/service segments. Given its annual revenue base of nearly $44 billion, Fujitsu remains a surprisingly small global ICT player. Management was clear in recognizing the need for investment in small-but-growing markets like Latin America, but given limited resources, we did not hear enough about priorities and tradeoffs. Given flat revenue performance in recent years, and an EBIT margin hovering around the 2% mark, thin cash flow from operations severely limits its investment capabilities. We expect further sharpening of the product portfolio and geographic priorities over the next 18 months.
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