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With
close to $32 billion out of its
total $47 billion global revenue in 2009coming from technology
(systems and services, excluding PCs), Fujitsu is the third largest
systems technology company in the world, next only to HP and IBM.
Contrary to popular perception, almost 40% of it now comes from
outside Japan. According to Gartner, it is one of the top five server
vendors in the world by revenue. It is also one of the top six IT
service providers in Europe.
In
contrast, in one of the hottest
emerging markets in the world - India - few even know that it
operates in these areas. And that is despite the fact that it had a
presence in India some time back as Fujitsu ICIM and it has an
offshore delivery arm in India, that employs more than 1700 people.
In
early 2009, the Japanese company,
that is also one of the largest in its home market Japan in areas
such as airconditioning, PCs, and mobile phones, decided to tap the
Indian IT market. The first major visible step came in early FY 10
(the company follows an April-March fiscal like most Indian
companies), when the company appointed Pallab Talukdar, to spearhead
its India dreams. Talukadar, a veteran of Indian IT, who had handled
various responsibilities within HP and Dell, was entrusted with the
responsibility of driving its hardware business that comprises of
servers, storage, workstations, thin clients and laptops. The company
consciously decided not to enter the desktop market.
Well
Begun
What
do you do when you enter a market
late? One approach is to focus completely on selling, by appointing a
few key people and then focus on other activities after you have
signed up a few key customers. The other approach is to build the
foundation stones first and then go to market with all the energy.
And another approach - which increasingly, many companies are
taking - is to create a big marketing splash to create a pull and
then support that with a strong sales force.
But
in case of Fujitsu, it was so late
in the market that Talukdar never had an option to choose between the
first two approaches. So, even though it seemed difficult, he decided
to go for both together.
Creating
a team was the first priority.
Soon after he took over in May, Talukdar appointed P Raghuraman, an
HP veteran as GM, channels & volume business. He followed that
up
with appointing Alok Sharma, also from HP as country manager,
workstations and thin clients. With these appointments, not only did
he get good talent in key positions, he created a pull situation
within the HP India employee base. Many in the PSG and TSG groups in
HP started pro-actively seeking opportunities within Fujitsu - a
great situation to be in a tough talent market like India for a
company which few knew just a year before. Though Raghuraman left
recently to join his ex-boss at HP Ravi Viswanathan at AMD India, he
did some good work to put a channel strategy in place. The other
senior executive that Talukadar hired was Debashish Bhattacharjee,
from Sun/Storagetek, of course, to head his storage business. In just
about ten months, Fujitsu has a sales team of close to 70 people.
Another
important priority was to put
together a partner ecosystem. Today, Fujitsu has two national
distributors in Redington and Rashi. It has five national level Sis
in Wipro, CMS, Tata Elxsi, Allied Digital and Accel Frontline. This
is in addition to regional resllers.
All
this happened, not at the cost of
creating some real sales. “The revenue increased by 130%, as
compared to April-March the previous year,” says Talukdar.
That is
some achievement in nine months or so, though by itself on a very
small base, it is not a definite statement of success. More
impressive than the sales growth is the slew of new customers.
Fujitsu has added more than 60 new customers in this period. And
consider who these clients are: five IITs, Tata Motors, L&T,
Indian Air Force...and the achievement looks even more impressive.
In
short, what Talukdar has done very
well in this short time period is to build a momentum. Add to this a
little marketing - which he has not done yet but plans to start this
year with some significant plans in place - Fujitsu bosses can even
hope to have another year with a three figure growth - on a much
larger base, as compared to last year. And considering that not too
many non-Indian/non-American companies have succeeded in Indian IT
market (well, SAP is an exception), it is doubly satisfying.
Big
League? Not Really
For a
company's of Fujitsu's size, a new market like India offers two
opportunities. One, it gives much-needed growth that can be sustained
for some years. Two, it gives an opportunity to compete with IBM and
HP as a real challenger in a holistic way.
Talukdar's
plans for tapping the first
opportunity are by and large in place. This strategy and a little
marketing (and a little more thrust on retail channels for the
consumer market) would give the company the growth that the company
is looking for. In fact, Talukdar's immediate priorities too are
right. In nine months, he has managed to sign five IITs and the IAF
training academy as the customers, for a host of solutions, including
thin clients. With heavy manufacturing companies like Tata Motors,
L&T and the technology institutes, he has not just built strong
base in these two verticals, he has strengthened the “rugged
and
tough” image of Fujitsu products. Education is a segment that
goes
completely by reference. Vendors find it tough to sign in initial
customers, but having a few such customers in place, the business
grows far faster. We will not be surprised if we see a lot more
traction of Fujitsu in this vertical. And lest one forgets, this is
the
present.
at the end of
the day, that is still tactics. And a short-term one at that.
To
be a large player in IT, it needs
more than smart tactics.
It
needs a positioning, it needs more
components, and it needs a strategy that would connect the components
to create solution - the whole whose value would be more than the sum
of the parts.
It
seems it is still not in place.
Insiders say it is positioning against HP, as it has more comparable
products with the Palo Alto company than the Big Blue. But that is a
mere “technical” difference - based on the logic
that Fujitsu,
like HP, is a player in PCs as well. We believe it is not going to
be a major player in the volume PC business in the price-sensitive
Indian market, with average notebook price of more than Rs 80,000 or
so. And when you eliminate that, there is not too much difference. HP
has caught up in services; has a software business, much smaller than
IBM, but important enough to create its solutions.
If
Fujitsu has to be counted as a top
systems technology player, it has to have those components,
especially services. In fact, Dell - still known to the world at
large as a PC vendor - today has a far bigger services business. So
has Sun Microsystems. These are the companies that Fujitsu competes
in servers, storage and workstations - the prime business for this
division.
Call
it ironic if you like, but
Fujitsu's services business is significant. And more than 1700 people
in that business have been based out of India for quite some time,
serving its customers in America, EMEA and now, even APAC. As much as
300 of them are in infrastructure services, that usually goes in sync
with the systems business. And of late, the unit, called Fujitsu
Consulting India Ltd (Consulting is just a name that it carries
because of historical reasons; it is into most IT service areas), is
trying out its hand in the domestic market as well.
Yet,
for some reason, that remains
completely isolated from the systems hardware business that Talukdar
is driving.
In
reality, India probably is the best
bet for the company to try out an integrated services-systems model,
not just because of the presence of Fujitsu consulting, but also
because of market reasons. India is probably the only market which
has taken to total outsourcing in such a big way at this stage of
market development. A vendor with a solution gets the CIOs' ear far
more than one with a set of products - no matter how good they are.
In
short, there is a real chance for
Fujitsu to prove to the world that it is the real No 3 in technology
solutions. The window is closing with Dell inching in with aggressive
foray into services.