Fujitsu – where the Cloud changes business models
February 8, 2012
Fujitsu made its impression of the Cloud clear at this year’s Fujitsu Forum, held in Munich in October. Fujitsu’s pragmatic German CEO Rolf Schwirz’s strategy was dished out with no ‘ifs and buts’ as he detailed the company’s move into the Cloud and how it plans to target the growing market.
In Schwirz’s view, Fujitsu is not competing in a new market, and it already has the technology the market requires. Instead, Fujitsu’s focus on the Cloud will be all about service levels and flexible offerings that promise easy deployment, easy contracts and little emphasis on the underlying technology behind the Cloud offering.
“From a technology perspective, cloud computing is actually internet computing – you use the Internet for cloud. It is not a new technology; it is simply a new delivery model. And for all delivery models, one thing will remain important: you have to offer a solution to the customer,” Schwirz said during his keynote speech…
“First of all, it is a service business, and the Cloud business is forced into what I call an elastic business model. Not only can you scale up and down, but payments for the Cloud must be elastic,” Schwirz said.
For a company that is normally associated with its enterprise technology, it is a big move. Fujitsu’s head office in Japan expects more than half its revenue to come from outside its Japanese operations by 2015, including from emerging markets. Schwirz’s office in Germany, therefore, has a big job ahead, turning fortunes around to the service business that has a strong focus on EMEA.
It makes sense to Schwirz. He says cloud computing is likely to change the very dynamics of the technology vendor industry. He believes technology will become irrelevant when it comes to selling cloud services, with customers instead focusing on the applications and service levels that come as part of cloud contracts.
“Some of the [IT enterprise] companies in the current world IT rankings will disappear, because they are about to miss a train – they are not ready to sacrifice their business model to go into cloud computing. There will also be new names appearing and they will become well known to companies willing to cannibalize their business models and go full-steam into the Cloud,” Schwirz said.
Fujitsu’s cloud
Fujitsu already has many elements to its cloud computing offering. It also has more than 100 data centers around the world, including five key data centers built for cloud services, geographically positioned around the world for redundancy.
At the Fujitsu Forum it said it will release DI Blocks (Dynamic Infrastructure Blocks) that offer a modular, step-by-step approach to moving to the Cloud, made up of its existing server, storage, network and virtualization technologies in January 2012. The blocks will start at 48 cores and scale to more than 1700 Intel Xeon 5600 series cores.
These blocks are also key to its entry into new markets where cloud may not exist. According to Gartner analyst Matthew Eastwood, Fujitsu is trying to allow local markets to tell their own story with different options for technology stacks that can be rolled out as each market requires, regardless of size. “It wants to leverage parts of Fujitsu that are most applicable to any given market,” Eastwood says.
It also recently launched a new cloud network product portfolio – Cloud Connect Communication Suite – which allows unified collaboration and communication tools to run on a Fujitsu-run Cisco HCS platform. This compliments its Business Solutions Store, a new “marketplace” for cloud business applications, for which Fujitsu is partnering with a number of external companies.
“The corporate software we know must have the capacity to operate in millions of different environments,” Schwirz said. “It has to function on top of millions of different stacks.”
The first offering released out of the Business Solutions Store ecosystem is the Fujitsu CRM Cloud Services based on open source technology, which Schwirz says offers a more affordable approach to CRM for smaller companies and a strong backbone for companies looking for a stepping stone into cloud deployment.
Fujitsu calls this “software democracy” and it is learning more from the consumer application space than the enterprise environment.
End result
Fujitsu believes it has a challenge ahead to retain its end users, and that is why it is taking an aggressive approach towards the Cloud. “We see a big hesitation of other players [similar to Fujitsu] that can do this in the market,” Schwirz said. He believes the problem is that few companies are willing to sacrifice their current business models in order to offer cloud services.
He recognizes that, at the end of the day, the Cloud will mean end users can change their mind about a service at the drop of a hat, reversing IT decisions. “With cloud it will be very difficult to take prisoners,” he said.
“I always say there is a tough and rough competition in the IT industry, and I think we don’t know yet what that competition is when we think about cloud computing because the customer can walk away and go to another vendor. Because the software will have changed in the way described, it will mean there is no training needed to use another solution for the same purpose, so there will be more competition than ever before.”
“That is why we are making a commitment today that we are moving full-steam ahead into the Cloud.”