Research Note: Fujitsu Strategy Summit

PAC’s analysts have spent the week with the Fujitsu leadership team in Japan, as it celebrates its 90th anniversary, and prepares for its new three-year strategy cycle. Here’s our key takeaways on the company’s changing proposition and its future plans.

Domestic Differentiation, Sustainability Commitment
Fujitsu recently engaged with its major Japanese clients and prospects at its ActivateNow Summit, which explored the changing role of Japan at a time of high geopolitical and economic volatility.

The country continues to account for more than 70% of the company’s IT services revenue and CEO Takahito Tokita told us that the company is helping major companies harness AI to adapt to impact of US tariffs. Like many technology vendors, Fujitsu also sees a renewed opportunity in the defence sector, both domestically where it already has a >€1bn business, and in Australia and the UK.

It is hard to appreciate Fujitsu’s domestic position until you see the breadth of its technology stack (from subsea telecoms networks to Quantum computing) and the power of its R&D engine, driven out of its global hub in Kawasaki. It was interesting to hear how its advances in Quantum and AI (including the Takane LLM and Kozuchi AI platform for agents) are being applied in practice. Tackling media disinformation, optimizing policy planning in public health and reducing number of GPUs required to support AI workloads among compelling examples.

Tokita-san states that Fujitsu’s ability to bring together services with its technology stack remains a differentiator, although its mainframe and ATM businesses are in the process of winding down. On the mainframe side, Fujitsu has announced a partnership with AWS to help clients re-platform their legacy workloads, and more broadly Tokita-san said that it will work more closely with partners such as Microsoft, ServiceNow and Salesforce to raise its presence on the international stage.

The recent focus of the international business has been on improving profitability, and a string of disposals and rounds of restructuring has shrunk its activities in Europe and North America. International head Mikihito Saito said that the company is aiming to get back on the front foot on both sides of the Atlantic, by reinforcing its industry focus; doubling-down on modernization initiatives; and maximizing the use of Fujitsu IP.

It was also refreshing to hear a reaffirmation of Fujitsu’s commitment on sustainability despite shifting geopolitical climate and market priorities. Fujitsu’s strategy is led by Chief Sustainability and Supply Chain Officer, Takashi Yamanishi, who says its positioning “has not changed.” The company demonstrated strong progress on Scope 1-2 reductions and has an ambitious horizon for its Scope 3 targets. At the same time, Fujitsu’s domestic propositions on supply chain resilience during natural disasters are becoming increasingly relevant on international stage.

Wayfinders’ Path to Growth
One of Fujitsu’s most recent announcements was an expansion of its “Wayfinders” initiative, to build a client-facing consulting division. The group was first set up in April 2024, and last month, it was announced that it would focus on four domains: Industries, Operations, Experiences, and Technologies.

Wayfinders is led by divisional CEO and former Accenture partner Shin Shuda, who said that the aim is not to build a standalone consulting arm, but to act as the “linchpin” that pulls-through wider Fujitsu capabilities. The ultimate aim is to help the company move “upstream” by adding greater industry domain expertise and improving its ability to join-the-dots between its technology capabilities and its clients’ business challenges. However, Shuda-san emphasizes that there is no ambition to move into business strategy consulting.

The original plan had been to grow Wayfinders to a team of 10,000 consultants by the start of the current financial year. Fujitsu has fallen short of that target, but highlighted strong momentum in recruiting senior domain experts in areas such as manufacturing, automotive and financial services, with Japan and the Americas growing the fastest.

Shuda-san said that as a challenger in the consulting space, Fujitsu would explore more innovative value-based pricing models, with the strongest potential with existing clients. Their remains some work to be done in defining which of the different moving parts of the Fujitsu organization will lead the commercial relationship with the client, but it has made progress in implementing a more standardized approach to consulting engagements across the group.

PAC believes that the development of the Wayfinders wing will be vital to helping Fujitsu punch at a higher-level in its clients’ business, particularly if it is to get more of a slice of the transformational work where it can get full value from its technical expertise and R&D engine. It is also highly relevant for Fujitsu’s business with partners including SAP, ServiceNow, Salesforce and the hyper-scalers.

Uvance & Collaborative Plays
One of the core pillars of Fujitsu’s current three-year strategy has been Uvance, the initiative that was designed to bring together the company’s core industry and horizontal propositions.

Former SAP & Toyota executive Sinead Kaiya, EVP for the Business Solutions Group, said that a lot of “foundational” work has been completed in simplifying the portfolio. At its core, Uvance is about Fujitsu moving away from one-time projects to repeatable offerings, and from an industry-specific to a cross-industry approach – and the company shared some interesting examples that underlined its progress.

The vendor set up a joint venture with logistics group Yamato called Sustainable Shared Transport to tackle one of the biggest issue facing that industry in Japan – the impact of new regulations that restrict overtime working hours for drivers. This has led to a chronic labour shortage which has forced some smaller firms into bankruptcy. But as part of the JV, Fujitsu has created a platform that shares data between shippers and carriers relating to schedules, packaging and volumes. This is designed to help them to optimize transportation plans and identify available resources in a more collaborative way.

One of the core cross-industry focus areas is on “healthy living” and Fujitsu discussed the work that it was doing in partnership with US startup Paradigm Health to tackle the issue of “drug loss” in its domestic market. The clinical trials process in Japan is lengthy and complex, and as a result, many international drugs and treatments have yet to be made available in the country. The two companies have established an AI-based platform that aims to accelerate the process by collecting data stored at medical institutions and automatically creates clinical trial documents using Fujitsu’s proprietary LLM. Fujitsu is targeting a revenue opportunity of JPY20bn (€118m) in 2030 through this initiative.

Uvance-related engagements are set to represent 30% of Fujitsu’s services business in the current fiscal year. It will be interesting to see if the vendor is able to capitalize on and replicate some of these collaborative plays that it works on so regularly in its domestic market, on the international stage.

M&A Momentum
Fujitsu has historically taken a relatively cautious approach to inorganic growth – particularly on the international stage.

However, the level of activity has been picking up since it established a strategic growth & investment team five years ago. This is led by former Accenture and McKinsey exec Nicholas Fraser, who told us that the acquisition of German retail software group GK Software has been pivotal in changing the mindset around the potential for M&As to accelerate the top line.

Fujitsu gained outright control of GK Software two years ago, having held a minority stake for more than a decade. Fraser says that this gradual approach has helped with the integration process, as it gave Fujitsu time to get under the hood of the target company and make more informed judgements on how it should be positioned with Fujitsu’s own retail tech offerings. Adidas is a key GK Software client and has deployed its Cloud4Retail platform to streamline 2,000 stores across 26 countries including new POS system, personalized data and RFID inventory management.

Fraser said that rather than pursuing big-bang takeovers, the focus is on executing a couple of number of “programmatic” deals each year, targeting mid-size firms that enhance the Uvance and Wayfinders proposition in terms of IP, technical skills and domain expertise. The string of deals that the company has closed in Australia (including consulting firm MF Associates and ServiceNow partner Enable), is a good illustration of this approach.

Fraser’s team are also leading Fujitsu’s partnering and corporate venture capital initiatives, which have included making investments in AI vendors Cohere, Sakana and Palantir. Fujitsu currently has close to 20 companies in its investment portfolio, and it is also using it as a way to build out its story in the emerging Quantum space, taking a stake in Tokyo-based Qunasys, which writes complex algorithms for quantum-style computing.