Foster reveals Fujitsu war plan

New A/NZ CEO looks to cloud computing and the telco market for growth.

Newly-appointed Fujitsu Australia CEO Mike Foster has placed his bets on cloud computing and network technology in an effort to sustain strong growth in the Australian market.

Speaking to iTnews after his appointment as local CEO late last week, the former Kaz managing director said Fujitsu is a “clear number three” behind IBM and HP, both vendors with huge services arms and a hand in most major government and corporate accounts.

“This is a scale game,” a confident Foster said, one week after taking over from Rod Vawdrey, who was promoted to President of Fujitsu’s 55,000-strong global business group.

Fujitsu Australia and New Zealand has grown at over eight percent annually, doubling the wider IT market growth rate of four percent.

The company recorded $1.1 billion in revenues in the fiscal year to March 2011, and employs over 5,000 staff in Australia and New Zealand.

“As we’ve grown we have taken on bigger, more complex deals,” Foster said. “We can compete head to head with IBM and HP – we have the size and the scale to be capable of anything.”

The Fujitsu advantage, he said, was its ability to compete on scale but be nimble in the face of two larger rivals burdened with complex lines of reporting back to regional and U.S. headquarters.

“There is much more flexibility when your decisions are made locally,” Foster said. “You can get things done quickly.”

There are fewer more appropriate illustrations than Fujitsu’s build of new data centres – two of which were commissioned during the global financial crisis, when most players in the industry found it difficult to obtain finance.

Fujitsu’s new Perth data centre went live in November last year with BankWest as an anchor tenant, and the company also invested in facilities in Western Sydney and Melbourne.

Many of these sites are now adjacent to brand new builds being financed by the likes of NextDC and HP.

Meanwhile, HP, IBM and Dell have all expressed interest in building out cloud computing services on Australian soil - an area where Fujitsu already offers live production services. 

Foster believes Fujitsu got a great head start on its rivals by investing in data centres while markets were down – which gives the company an 18-month to two-year window on some of its competitors.

“Now we have great data centres we can build a substantive cloud computing capability,” he told iTnews. “That’s a capability others in the market are scrambling to build right now.”

Foster doesn’t anticipate any problems filling Fujitsu’s new facilities – especially considering the growth of cloud computing market generally – but he does see a potential for the data centre market to be saturated within a few years.

“There will be some pressure in the [data centre] market,” he said. “It’s a similar cycle to what happened in the late 1990's and 2000's. Those that got in early got their return, those too late didn’t.”

Next steps

Fujitsu’s strengths to date have revolved around managed IT services, end user computing and application services.

But as more office workers bring their own devices into corporate networks and connect to services delivered from third party data centres, Fujitsu has moved to spread its risk across new service categories - cloud computing and telco-centric network services among them.

The market for IT services has in recent months shown signs of improvement, compared to the past two years, Foster said.

“Companies and government agencies are looking to invest again, particularly in the banking and finance and resources sectors," he said.

Fujitsu has signed three of Australia’s largest companies, two Federal Government agencies, two State Government agencies, one resources company and a couple of manufacturers to its local  cloud offering, he said.

But Foster does not expect this more flexible business model will jeopardise Fujitsu’s managed IT services and outsourcing revenues.

“The services are complementary,” he insisted.

More often than not, he said, demand for cloud computing is driven by new application requirements, not a blanket decision to abandon old operating models for new ones.

Aside from cloud computing, Foster also sees a role for Fujitsu in providing some of the value-added network services – the IT grunt, so to speak, for Australia’s telcos.

“Australia’s telcos are investing – but where a telco finishes is quite defined,” he said. “They will build and operate a network, but not some of the more sophisticated network management tools or value-added services on top of that.”

Fujitsu intends to invest heavily in an area where smaller competitors such as Dimension Data have excelled – linking with telcos to offer value-added network services into enterprise and Government customers.