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FTS explains infrastructure and services vision

by Stuart Wilson, Wednesday 18 November 2009

Fujitsu Technology Solutions (FTS) has undergone something of a metamorphosis during the last year. Formerly known as Fujitsu Siemens Computers, the 15,000-strong IT infrastructure provider has undergone a rapid – and some might say fairly radical - transformation since Fujitsu completed the buyout of Siemens’ share of the joint venture on April 1st 2009.

Kai Flore, president & CEO at FTS believes that the product-focused pupa that entered a cocoon of integration - when Fujitsu first announced its intention to buy out Siemens’ stake in November 2008 - is now ready to emerge as a fully-fledged services and infrastructure butterfly. Flore laid out the new vision for FTS at VISIT2009 – the company’s annual partner and customer event – held in Munich, Germany.

While the integration of FTS into Fujitsu’s global empire has involved a great deal of hard work, Flore was keen to point out the strength of the new organisation and its position as a top tier player in the global IT infrastructure pecking order.

Global integration

“We are delighted to show what we have done in the last 12 months,” declared Flore. “Fujitsu is a truly global IT company and the only non-US IT company of this magnitude. Fujitsu has R&D spend of US$2.6 billion per annum and is really a technology-driven company.”

As a global entity, Fujitsu employs some 186,000 people and posted revenues of US$47.9 billion for the year ending March 2009, ranking it number four behind HP, IBM and Dell. “As number four, we have a goal of breaking into the top three,” commented Flore.

Drilling down deeper into FTS, half of the group’s 15,000 employees are already working in the services arena and this is an ongoing transition that involves the company reassessing the role of its manufacturing operations and product lines. “The indication is that our profile is changing from a product-centric company to an IT infrastructure provider,” explained Flore.

As a hardware vendor, Fujitsu Siemens Computers manufacturing operation had close links to Augsburg in Germany. Despite the changing profile of the new FTS, Augsburg’s continued role in the company’s operation is assured, according to Flore.

“[Augsburg] is still alive and it will be alive in the next years,” confirmed Flore. “We have a clear commitment to the factory in Augsburg even if the products we manufacture there change. It is a key asset in my region and I hope we can put a stop to certain rumours.”

“It is quite clear that we ‘were’ a product company and we still are to some extent. Our bread and butter is product and services but FTS is moving towards becoming a full IT infrastructure provider, and a lot of this will be done together with partners.” he added.

“We are losing share in the PC market but this was factored into the business plan,” he explained. “When 50% of your employees are in services and going after value-added business, it is difficult to play a pure PC game. We are no longer a boxmoving PC company.”

“Virtualised clients require different form factors and we are investing in innovation and new trends rather than trying to compete with companies that are 100% dedicated to PCs,” Flore added.

German commitment

FTS’ commitment to Germany remains clear. The company plans to open a new 12,000 square metre datacenter in Augsburg within the next seven months plus an innovation centre in Munich within six months. “We need this [innovation] centre in terms of cloud virtualisation and other major trends,” said Flore. “It will be used to support both partners and customers.”

As FTS looks to climb us the services value chain, new concepts such as managed infrastructure – or outsourcing if you prefer – and infrastructure-as-a-service will take on a much higher priority. The message emanating from FTS is that the vision of utility computing, which was first touted by major IT companies almost a decade ago, is now a tangible reality.

“It is all about pre-defined services available at a flat rate,” said Flore. “This concept of utility computing is an area where we are investing massively.”

Financial performance

While FTS has undoubtedly come a long way since the buyout was completed, concerns still surface over the structure of the group and its position within the global Fujitsu empire. Within Europe, Fujitsu’s operations in the UK and Nordics are both treated as separate entities from FTS within the global business. FTS itself covers the Middle East, Africa, Russia and CIS and Europe with the exception of the Baltics, Nordics, UK and Ireland.

Flore remains adamant that the business implications of the current structure are minimal. “We have a close relationship with the Nordics even though we are two separate regions. FTS is deeply embedded in the Fujitsu Group, which has global delivery and global logistics systems.“

Now that it is part of the wider Fujitsu Group, the financial performance of FTS is no longer published. However, while not divulging specifics, Flore was keen to point out that the company’s balance sheet was in robust shape.

“We are in the black, we are healthy, cash rich and have no debts. In terms of [PCs], are we losing market share? Yes, but we’re quite relaxed about that. We are a healthy and reliable partner for our customers and our partners as well,” Flore concluded.

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