Fujitsu’s Cloud Computing Strategy – A Vision For The Networked Society

Fujitsu Cloud Computing Strategy Highlights

• Identifies four ‘modes’ of consumption for medium and large companies
• Distinguishes between Private, Public, Hybrid Clouds
• Is working on bringing standards for Federated Clouds
• Is investing in data centres from which to run its IaaS and SaaS offerings
• Sees strong convergence issues between IT and C
• Has build its approach through extensive customer interviewing
• Is running Smart Cloud extensions to help develop the ‘Networked Society’
• Will avoid the ‘same everywhere’ approach of some US suppliers
• Is concentrating more on business, service, compliance and integration than on technical developments

I travelled up to Baker Street, London last week to see Fujitsu. It’s a large modern office behind a relatively humble frontage and I almost walked past without noticing. I was with a number of other analysts keen to hear from Philip Oliver (Marketing Director Global Business Group) and Mark Silvester (CTO) about its new Cloud Computing strategy

Fujitsu is one of the oldest ITC suppliers, having been in business for 50 years. Its origins were in the telecoms and computer industry and it still generates significant revenues from both (Figure 2).

When he worked for IBM, Philip tended to think of regions as being in ‘different phases of adoption’. Fujitsu’s approach is to give its regional offices more autonomy, allowing regional managers to make decisions on a large number of issues (although not on big investments or branding). He argues that this matches differences in the market – the high level of outsourcing found in the USA and UK, for instance, will never be found in Japan and France due to big differences in employment law. He also claims that in Japan large companies are expected to make a better society as well as maximising shareholder value. We’ll see later that both these differences are reflected in its Cloud Computing strategy.

Fujitsu Defines Four Modes Of Cloud Consumption

In planning its Cloud strategy Fujitsu has decided to split the types of offering into four ‘modes’ of consumption – Infrastructure, Application, Activity and Content. Large (>1k) and Medium (100-1k employee) companies are acquiring the first two modes today, while it believes the latter two will develop overtime. I’ve borrowed Fujitsu’s diagram of how its view of Cloud Computing will develop in Figure 1.

It sees three basic types of Cloud – Private, Public and Hybrid. It is also interested in ‘Federated Clouds’ and has joined the leadership board of the Distributed Management Task Force (DMTF) of the Open Cloud Incubator Standards body to help develop common standards.

Following my experiences at the Information Age Managed Services and Hosting conference in London last week I’m particularly interested in the potential development of local country Clouds which might help Managed Services companies provide services compliant with local legislation (Payment Card Initiative in the UK for instance). If firmly adopted by government compliance agencies it might even protect local ITC companies against the onrush of large foreign software companies into the Cloud space. My view is that Fujitsu’s work would help such developments.

Fujitsu Is Developing Smart Clouds For The Networked Society

While the current consumption of Cloud Computing for existing markets takes up the left hand side of Figure 1 (Private Clouds, Infrastructure and Application consumption, mission critical and front-end systems), Fujitsu has also been working on developing the newer right hand side. It is experimenting in the modernisation of water, traffic control and agriculture systems in Japan through ‘Smart Clouds’. Its ideas on the networked Society’ tie into the company’s aim to make society a better place. These systems embrace new types of data and processes (collecting information from farmers’ activities, monitoring sewage systems, or adjusting traffic control through the collection of telemetry data from motor vehicles). Clearly the acceptance of some of these systems will be limited by cultural an d legal issues in different countries, but it is good to hear such strong views on the relevance of Cloud Computing in new citizen systems. IBM’s Smarted Planet strategy is somewhat similar (and certainly more advanced). Fujitsu will be able to use its networking and telecoms expertise.

One issue to consider however is the resilience of ITC in comparison with no-ITC ‘systems’. In controlling power utility usage, water and traffic it will need to become more reliable. I remember hearing Bill Gates joke about the need for a resilient version of Windows when he begun using it to control the locks on his new house.

Fujitsu’s First Move – Roll Out Cloud IaaS And SaaS Offerings

Fujitsu already offers Cloud Computing services through a number of services (Toyota in Australia is an example). It has been working on data centres in four countries as the basis of its wider offerings, which it will be testing with customers in May before launching IaaS services in October this year. Its locations include:

• Japan
• Australia
• Germany (Augsburg)
• The UK

It will also be opening a new data centre in ‘continental Europe’ sometime in the future.

Initially it will be mainly serving its existing medium and large customers, whom it has interviewed extensively over the last few months. I expect it to concentrate far less on cookie-cutter services than most of its American competitors – not least because in a survey result shown to us in the meeting its UK customers rated multi-country support lowest on a list of expected features. I’ve include a view of Fujitsu’s revenue by region in Figure 3 – adjusting quarterly values to the $US for the Americas and €Euro for EMEA. The sharp jump in revenues from EMEA in 2009 was due of course to Fujitsu’s acquisition of Siemens half of FSC, before turning it into Fujitsu Technology Solutions.

Some Conclusions – A Great Strategy, Now The Execution

In their presentation the Fujitsu executives admitted to being a bit late to launch a Cloud strategy. I’m not totally surprised given the major restructuring it has gone through (offloading its hard disk drive business to Toshiba and STK, announcing major job losses in the UK, creating FTS are just three I’ve covered).

The approach outlined by its Global Business Group has been very well thought out and backed up by substantial surveys and face-to-face interviews. It is also designed to play to the company’s strengths as a Telecoms equipment and network supplier alongside its massive IT services business. It has already started the investment in the data centres from which to run its IaaS and SaaS offerings – and from which it will be building its ‘Activity’ and ‘Content’ modes.

I’m concerned about two aspects of its strategy. In particular:

• Firstly, that by mainly addressing the business, service and consumption issues it is playing smaller role than its competitors in the technical definition of Cloud Computing
• Secondly, that there’s a downside to the freedom its regions have in developing their own business models; having spent most of my time working in EMEA for an American company I learnt that not every country is the same, nor is every country different – balancing the two sides can be difficult

However I’m convinced that Fujitsu can take advantage of the convergence between IT and Communications and the ‘digitisation’ and computerisation of many power and water utility transportation systems. If it is really trying to do some good to society in the process then it differs from companies like IBM, which is not absent from these activities, but rather separates and addresses them as part of its CSR programmes.

This is a refreshing and original approach to Cloud Computing, but of course the ‘proof of the pudding is in the eating’. I’ll be watching Fujitsu’s announcements with a better understanding of its intended direction. If you’re an IT manager in a medium or large (mainly single country) organisation, make sure you don’t walk past the door.

Are you an IT manager making decisions about adopting Cloud Computing? Do you find Fujitsu’s strategy attractive? Let me know by commenting on this article.