At a new Silicon Valley facility, Fujitsu hosted about 20 industry analysts and over 200 guests for a day of presentations on emerging technologies like quantum computing and AI. The following special report reflects conversations TBR had with Fujitsu leaders and highlights Fujitsu’s role in the technology ecosystem.

Fujitsu’s Superpower: Fusing Compute Power with AI

After a year of relentless hype about the promises of generative AI (GenAI), Fujitsu Research’s leaders structured their presentations during the Fujitsu ActivateNow Technology Summit around a relatively simple and compelling story: GenAI is fundamentally AI, and Fujitsu has successfully deployed a wide range of AI-enhanced solutions.

 

By observing which business challenges can be addressed with AI, and then developing and productizing AI-enhanced solutions, Fujitsu has built an amalgamation of AI solutions, a collection that is worth more than the sum of its parts. The latest fad, GenAI, fits within this collection. According to Fujitsu leaders, the company has delivered over 7,000 AI-enhanced solutions, providing a strong foundation to tap into as GenAI is more widely adopted. TBR recognizes the Japan-centric nature of the majority of Fujitsu’s AI uses cases but sees the value in playing to the company’s strengths.

 

Among these strengths, Fujitsu’s leaders noted that the company’s superpower (TBR’s word, not theirs) comes from fusing compute power with AI. One of the guest speakers reinforced that sentiment by noting that GenAI is feasible only because of the extreme computational power utilized. Fujitsu has recognized that being good at compute is absolutely necessary to be good at GenAI.

 

In TBR’s view, this potentially unique combination of compute power and AI, at scale, could separate Fujitsu from peers as enterprises begin the slow process of recovering from the unfulfilled promises of GenAI hype and implementing the changes needed to progress from pilot to scaled deployments. Fujitsu’s leaders explained that their strategy to accelerate that progress started with the launch of a free AI platform, dubbed Fujitsu Kozuchi (“magic hammer” translated from Japanese), essentially a GenAI sandbox, which the company has now begun to commercialize through a freemium business model.

 

Critically, Fujitsu has tracked activity within the sandbox to determine which AI use cases and associated technologies gained the most client traction and have significant revenue upsides for the company. Fujitsu has been transitioning these uses cases, smartly, from free to use to pay for scale. Fujitsu’s Kozuchi platform spans seven AI areas: GenAI, Predictive Analytics, for Text, AI Trust, XAI, for Vision, and AutoML.

 

In TBR’s view, Fujitsu’s experimentation with AI commercial models while marrying inherent compute power to the potential of GenAI only works because of Fujitsu’s extensive experience with AI and credibility with clients and ecosystem partners. Fujitsu needed a solid foundation in both compute and AI to be well positioned for accelerated growth around GenAI.

 

Additionally, Fujitsu’s broad-based portfolio, including its family of HPCs (high- performance computers) as well as the lower power consumption Fujitsu ARM-based processor — the latest version is scheduled to be released in 2027 — can help the company compete for managing AI workloads, specifically machine learning ones. With security built into the hardware, these processors can also help Fujitsu better appeal to clients in highly regulated industries, including the public sector, emergency response and public safety, healthcare and telco, among others. While built-in security is not a unique feature to Fujitsu, it is a necessary building block as it enables the creation of a strong tech-led AI story around developing and managing large language models.

Exactly the Right Time to be Strong in Analytics and AI

TBR’s Voice of the Customer research shows an additional component to Fujitsu’s potential GenAI-related growth. In TBR’s December 2023 Digital Transformation: Voice of the Customer Research, analytics topped the list for priority investments in technologies supporting transformation, displacing cloud and cybersecurity for the first time since TBR started tracking the data six years ago.

 

The report notes: “Analytics is now the top technology buyers choose to support their DT [digital transformation] programs, with AI tools and GenAI ranking in the top six, thus heightening buyers’ expectations for vendors to deliver timely ROI that is tied to ongoing business process and/or IT modernization transformation as implications of technology complexities extend beyond data science, thus creating opportunities for vendors that can manage broad-organizational relationships. Addressing multidisciplinary skills gaps will be key.”

Sustainability and Innovation

Fujitsu’s presence and history in the Silicon Valley, which spans 30 years, enabled the company to develop a deep innovation ecosystem. Fujitsu’s CEO of Research of America, Indradeep Ghosh, and Global CTO, Vivek Mahajan, discussed the expansion of the company’s innovation efforts and how Fujitsu has shifted toward sustainability impacts. At the company’s recently opened facility, Fujitsu remains in close proximity to its key partners, including technology vendors as well as smaller, more specialized firms, which can drive collaboration and innovation efforts.

 

Further, Fujitsu is able to work with universities including Carnegie Mellon University and the nearby Stanford University to deepen its AI, analytics, data utilization and digital twin expertise. Through its innovation efforts, Fujitsu looks to drive social change and leave a positive impact on society, in addition to gathering business intelligence.

 

To contribute to societal change, Fujitsu is prioritizing sustainability with a focus on slowing the impacts of climate change. Fujitsu leverages its expertise and insights to develop technologies and services that benefit the environment and society. Developing sustainability services and solutions in collaboration with U.S.-based universities and companies could encourage local enterprises to establish carbon and energy reduction goals.

 

While sustainability and carbon reduction initiatives have stronger traction in Europe, Fujitsu’s efforts will help transform local clients’ global operations. Fujitsu is considering the long-term impact, which will create new opportunities for the company to drive digital transformation projects across regions outside Japan.

Quantum

Quantum technologies have long been ingrained in Fujitsu’s portfolio and technologies, starting with its in-house development of computing and high-performance computing in the 1990s. Fujitsu has continued to expand the compute power of its quantum technologies enabling the company to address a wider range of challenges, with societal issues the most recent addition. Building out its base and capabilities, in addition to establishing itself as a global technology company, have helped Fujitsu explore the U.S. market. Fujitsu is pursuing two strategies around quantum that will give the company an edge over its technology-centric peers.

 

First, as CTO Mahajan noted during the event, “We [at Fujitsu] are very willing to transfer our IP.” The willingness to give away IP expands Fujitsu’s addressable market. This openness to IP adoption provides both Fujitsu and prospective customers with an advantage, as it raises awareness of the company’s platform and ability to expertly deliver, implement and manage quantum technology.

 

Second, Fujitsu’s plans include the capability to build a quantum computer at a client’s site, actually bringing the hardware to a client rather than providing quantum services from a Fujitsu site. By creating on-site hardware stacks, Fujitsu will be able to integrate with clients’ existing or preferred technologies, enabling the use of new capabilities. With the ongoing convergence of technologies, the ability to work across and with a variety of platforms will strengthen Fujitsu’s overall positioning within the space.

GenAI

Despite possessing the GenAI superpower of fusing the company’s compute power with its AI expertise, Fujitsu has, by its leaders’ own admissions, struggled to gain market recognition as a top player in the overall AI space. One approach Fujitsu has begun pursuing focuses on influencing the wealth of AI startups. TBR’s casual observance of the many startup-affiliated name tags at the ActivateNow event indicated this approach may have generated some early traction.

 

In TBR’s view, focusing on startups reinforces Fujitsu’s corporate culture and mindset, which view technology as central to everything Fujitsu does. The company’s leaders also stressed their efforts to leverage academic research and the broader technology ecosystem as a way to echo Fujitsu’s message of “converging technologies,” a concept that TBR believes hews closely to emerging trends (see TBR’s 2024 Professional Services Predictions and 2024 Digital Transformation Predictions).

 

Applying the company’s blockchain technology to its AI and GenAI assets could strengthen Fujitsu’s position in the space and grow its recognition outside of Japan. The need to regulate AI continues to expand with emerging use cases. Fujitsu’s expertise around blockchain, including Fujitsu Data & Security Technologies for Sustainability Transformation, aligns closely with data protection and regulation, creating the opportunity for the company to apply these capabilities to AI. Fujitsu’s blockchain solutions add a layer of identity and protection to verify real data and information, protecting against external threats.

Sustainability and Consulting as Critical Next Frontiers for Fujitsu

Notably, Mahajan’s first topic was global warming — as he stated, “boiling” — and the opportunity to apply technology to solve climate challenges. His comments conformed with Fujitsu leadership’s sustained message around competing globally and providing something valuable to clients, but TBR cannot recall a similar situation in which the global CTO of a technology-centric company led with global climate change.

 

For the rest of 2024, TBR will listen for similar emphases from CTOs and other C-Suite leaders at the start of technology events. Meanwhile, Fujitsu Uvance provides Fujitsu with resources to develop and deepen the company’s expertise within vertical markets as well as horizontal business areas, allowing the company to drive transformation projects further enhanced by ESG (environmental, social and governance) initiatives.

 

More specifically, Fujitsu can narrow its scope within markets as clients diverge and look to embrace sustainable solutions and achieve outcomes. Leading with the Fujitsu Uvance brand allows Fujitsu to integrate sustainable solutions within specific vertical markets including sustainable manufacturing.

 

Lastly, with increasing client concerns around trusted partners and technology, Fujitsu Uvance’s AI Ethics and Governance Office can help the company establish digital trust in digital transformation projects and help secure Fujitsu’s relationships. Focusing on trust and ethics for the use of AI technologies will allow Fujitsu to use AI more effectively both internally and with clients.

Amalgamation of AIs and Connected Technologies Help Tell Fujitsu’s AI Story

TBR came away from the Fujitsu ActivateNow Technology Summit with two new ideas about Fujitsu and a few questions:

• First, TBR appreciates that Fujitsu’s combination of compute power and proven AI expertise makes the company a significant competitor and/or alliance partner for nearly every player fighting to turn GenAI hype into revenue. Second, Fujitsu’s vision of “converging technologies” aligns exceptionally well with the more tectonic trends TBR has been observing in the technology space, indicating that Fujitsu’s market positioning is more strategic than transactional or opportunistic.
• Going forward, will Fujitsu be able to leverage AI startups to shift enterprise buyers’ perceptions about Fujitsu as an AI company? Can Fujitsu successfully bring Japan-centric AI use cases to clients in Europe and North America? And will Fujitsu develop an alliance strategy that plays to its strengths in compute power and emerging technologies while leveraging ecosystem partners’ strengths in other critical component areas for enterprise buyers?

 

TBR anticipates that Fujitsu’s concept around the amalgamation of AI solutions will become a widely shared approach to GenAI. As the hype slows down in 2024 and buyers look to trusted vendors with both scale and proven use cases, as well as the ability to connect existing technologies — especially existing AI-enabled solutions — to GenAI deployments, many of Fujitsu’s peers and alliance partners will be talking about a broader understanding and framing of AI within the enterprise.

 

TBR covers Fujitsu in quarterly reports and as one of 30-plus vendors in TBR’s quarterly IT Services Vendor Benchmark. In addition to this event perspective, TBR has published numerous special reports on Fujitsu events and developments over the last decade.  

 In March 2024 Infosys hosted industry analysts for its U.S. Analyst and Advisor Meeting. The packed agenda included client stories and technology partner presentations to reinforce Infosys’ role in the IT services and cloud market. Infosys executives consistently returned to a few main themes, including delivering business outcomes, maintaining trusted relationships, and focusing on speed, agility and commitment.

Infosys’ Maturing Strategy, Backed by Localization, Training and Partners, Allows the Company to Sustain Client Trust Measured by Business Outcomes

Across an afternoon, Infosys (NYSE: INFY) leaders hosted a steady stream of clients and technology partners who discussed how they have worked with Infosys to apply technology to business problems and generate both cost savings and growth opportunities. Notably, every panel included at least one client, coming from a wide range of industries and describing a variety of problems addressed — and solved — by Infosys.

 

In the latter half of the afternoon, Infosys shifted the event’s focus to Oracle (NYSE: ORCL), including holding panel discussions with several Oracle and Infosys executives, most notably Amy Lewis, VP of Strategic Alliances, Oracle, and Oracle’s VP of Strategic Alliances and Sreekumar Sreedharan, VP and Global Lead Oracle Services, Infosys. TBR believes Infosys’ decision to persistently turn over the stage to clients and partners reflects the company’s confidence in its message and capabilities and a maturing of Infosys’ strategy, centered on commitment.

 

In opening remarks followed by a panel discussion about Infosys’ localization strategy, Infosys EVP Rajesh Varrier, VP Deverre Lierman and Associate VP Ranjana Venkatesh Joshi provided an update on the company’s six U.S. hubs. The six Technology and Innovation Hubs are focused on innovation, technology and education, with a few explicitly tied to universities and all focused on a core set of offerings, such as AI, machine learning and user experience design. Complementing these hubs, Varrier and the other panelists described the company’s 21 Proximity Centers as a foundational investment in Infosys’ effort to embed localization into the company’s overall strategy. Additionally, the panel elevated the value of Infosys Living Labs and tied the discussion to the era of generative AI (GenAI).

 

Overall, the panel’s description of Infosys’ commitment to developing talent through university programs, apprenticeships and professional training confirmed Infosys’ focus on the U.S. market and dedication to the company’s employees. This commitment is further amplified through Infosys’ use of AI and proprietary knowledge management platforms such as Wingspan.

 

In TBR’s view, IT services vendors like Infosys, whose India-based talent pool is necessary to its business model, must smartly balance low-cost delivery with on-site, highly trained, localized professionals who can go beyond clients’ technology and into their core business challenges. Clients and Infosys executives further solidified the role of the Innovation and Technology hubs, using the tagline, “Experience the Commitment.”

Infosys’ Data Capabilities and Humble Approach to Clients’ Data Issues Allow the Company to Build a Strong Foundation for GenAI Success Backed by Cloud

For the remainder of the afternoon, Infosys’ presentations included sessions on Infosys Topaz; Infosys Cobalt; Oracle transformations; ways customers and partners are tackling supply chain transformation; and testimonials from clients in the energy, telco, banking, automobile and retail industries.

 

The common theme among client use-case discussions revolved around data. It is easy to jump into a GenAI discussion and win a deal or two, but Infosys understands that without the right data, GenAI models are only as good as the data you feed them, reflecting the company’s humble position in the market. And Infosys’ data work went beyond data cleansing and data wrangling, often including data strategy, providing a strong use case that elevates the company’s value proposition with clients and alliance partners.

 

For example, Infosys helped a retail client create a data foundation supporting the client’s digital journey, which included bringing customer data from various sources together to develop personalized experiences and using AI models to generate recommendations that would help associates in stores and online. As Infosys helped with building the data foundation, the company also accounted for developing responsible AI applications because, as the client posited, “Customer data will not change, but how to interact with the customer might change.
 
And for any of this interaction to happen, people have to trust the data to interact with the data.” In another example, an infrastructure client replaced an incumbent with Infosys because of Infosys’ “transparency, technology and business knowledge, and innovation.” Infosys helped the infrastructure client with data strategy development and execution, once again highlighting the company’s commitment to service quality and execution and its willingness to think about foundation services before the potential additional opportunity in its client approach.

 

The sample of use cases at the event strengthened our understanding of the type of company Infosys is, as it continues to invest across its core portfolio offerings. For example, since the launch of Infosys Topaz, the company’s suite of AI services and solutions, in 2023, Infosys has already conducted over 250 experiments with clients around the use of AI, as many have begun to scale their deployments, supporting clients’ efforts to accelerate growth while reaching operational efficiencies. Infosys Technology and Innovation Hubs have played a critical role in demonstrating Infosys Topaz’s value in enabling the company to scale experiments.

 

Relying on its industry playbook and ecosystem of partners, both strategic and specialized ones, with the goal of delivering business outcomes has helped Infosys thrive in client conversations, as according to Infosys, the company continues to also apply GenAI to its own operations, rolling out new capabilities every six weeks.

 

Meanwhile, Infosys Cobalt remains the linchpin in Infosys’ cloud and overall digital transformation story as the suite continues to support clients’ evolving needs. From migrating clients to cloud to delivering industry cloud to now providing the foundation for AI, Infosys Cobalt and cloud in general, as Infosys EVP Anant Adya positioned it, have become the operating system (OS) for enterprises.

 

It is a tall order, but Infosys, drawing on its abilities to stitch digital assets together and then execute on clients’ transformation programs, has earned the trust of clients and partners seeking to capitalize on the opportunity cloud and AI present. One could argue that some of Infosys’ peers have similar strategies of bringing cloud and AI together. Infosys’ ability to stay faithful to its value proposition and committed to all parties separates the company from just being willing to take risk to actually carrying the burden through its commercial and SLA agreements. In short, Infosys facilitates transformation and innovation, with a commitment to delivering business outcomes.

Infosys-Oracle Relationship Provides a Strong Use Case of Trust, Transparency and the Future of Ecosystems

Building on almost three decades of experience, executives and joint clients from Infosys and Oracle brought the relationship to life, demonstrating the commitment and trust between the two organizations. We recognize it is not easy for Oracle and Infosys to be present at each other’s conference and/or speak on the other’s behalf, given their broader partner ecosystems and need to maintain neutrality.

 

But having a dedicated track to discuss the value of the relationship — as Lewis described it, “Infosys is a partner for complex transformations” — sends a strong message to clients seeking to work with transparent partners who understand each other’s portfolios and go-to-market motions. The success of the relationship requires leadership alignment, commitment and sustained investment in training, and, according to Oracle, Infosys is its No. 1 partner in terms of certifications.

 

The strategic alignment helps, as Oracle does not need to ask, “Why Infosys?” because Infosys is in the verified space, especially as it pertains to executing complex transformation programs at scale. Meanwhile, Oracle’s constant portfolio innovation has also helped Infosys elevate the value of the relationship in dealing with both existing and new clients.

 

Deploying a three-in-a-box governance model, including Oracle, Infosys and a customer, not just at a project kickoff but at every milestone, provides an opportunity for each party to share feedback around portfolio and client management. These motions are often tested in Oracle’s workshops days, during which Infosys discusses the art of the possible of Oracle cloud with existing Oracle clients seeking to embark on cloud transformation programs. The trust-but-verify approach Oracle has taken — which has included elevating Infosys to become one of the few cloud services providers on Oracle’s partner roster by conducting a third-party audit of Infosys’ cloud practice to ensure strict standards are met in procuring Oracle software on behalf of the client — highlights how serious each company takes the relationship.

 

Several joint clients’ use cases were presented at the event, adding the necessary details to reflect the depth of the relationship. One client spoke about the importance of delivering IP for niche areas, reference architectures and accelerators as being critical to Infosys’ industry model. Another client discussed switching to Infosys after selecting an out-of-the-box systems integration vendor because of Infosys’ flexibility and demonstrated change management capabilities for the implementation of the Oracle HCM solution. As both Infosys and Oracle evolve their portfolios and go-to-market strategies, accounting for the implications of GenAI while remaining flexible yet connected to the broader ecosystem will be critical to success.

 

By cozying up to other hyperscalers, Oracle aims to bring more database workloads to the cloud and take back waning database market share. For example, the Oracle-Microsoft (Nasdaq: MSFT) multicloud alliance continues to evolve. Given their large respective database and application footprints, Oracle and Microsoft have always had a unique opportunity to partner and address the requirements of joint customers looking to run the right workload in the right environment.

 

At the center of this partner opportunity remains a series of interconnected cloud regions that offer a low-latency connection between Oracle Cloud Infrastructure (OCI) and Microsoft Azure, which we suspect is largely appealing to customers who want to build and run Microsoft applications and connect them with Oracle Database on OCI. However, since the 2019 launch of Oracle-Azure interconnected regions, Oracle has formalized its commitment to a multicloud strategy and is pursuing new opportunities with Microsoft that should help both vendors meet their respective goals, which for Microsoft is driving Azure usage and for Oracle is all about migrating legacy databases to clouds outside OCI to take back database market share from born-in-the-cloud peers.

 

Building off the Oracle Database Service for Microsoft Azure offering launched over a year ago, Oracle recently announced Oracle Database@Azure, a broader portfolio initiative that expands the availability of Oracle database services, including Autonomous Database and Exadata, in Azure data centers. In addition to expanding service availability and ensuring customers can deploy their Oracle database workloads within a single data center, Oracle is taking steps to simplify both the procurement and support processes for customers. For instance, customers can purchase Oracle Database@Azure via the Azure Marketplace using their existing Azure commitments and take advantage of a joint support model from both Oracle and Microsoft.

 

In TBR’s Top 3 Predictions for Digital Transformation in 2024, we wrote:

 

“The launch of multiparty alliances beyond the traditional, preferred two-dimensional relationships and the rise of cobranded facilities can help promote these relationships and bring DT to customers in a package rather than in multiphased approaches. While GenAI will be the tool that forces vendors to establish better data strategies, the rise of the superpowers will also force vendors to rethink their go-to-market, sales and portfolio efforts centered on mutual accountability and portfolio knowledge.

 

“Prioritizing the needs of partners and enterprise buyers over internal growth aspirations will position vendors across the ICT value chain as leading ecosystem participants. It sounds like an idea born in marketing, but digital transformation outcomes will require multiparty business networks that bring together the value propositions of players across the technology value chain.”

 

We see Infosys as the right partner to pursue such a multifaceted approach, especially as the company understands the value of its core competencies and, more importantly, knows its partners’ strengths. Deploying multifaceted alliance frameworks requires establishing strong governance models rooted in accountability, especially as expanding wallet share from existing accounts by pitching new capabilities can be much harder than hunting new logos.

 

During a similar event in 2023, Infosys had SAP (NYSE: SAP) on stage. Given Infosys’ pattern, we would not be surprised if the company invited Microsoft along with Oracle or SAP next year. Time will tell, but given how buyers look to the ecosystem to procure services, such a move would not be out of the ordinary.

TBR’s Extensive, Ongoing Coverage of Infosys

TBR will continue to cover Infosys within the IT services, ecosystems, cloud and digital transformation spaces, including publishing quarterly reports with assessments of Infosys’ financial model, go-to-market, and alliances and acquisitions strategies.

 

For comparison with Infosys’ peers and other IT services vendors, TBR includes Infosys in our quarterly IT Services Vendor Benchmark; our semiannual Global Delivery Benchmark, Cloud Ecosystem Report, and Adobe & Salesforce Ecosystem Report; and our annual Decarbonization Market Landscape and Innovation and Transformation Centers Market Landscape. TBR is also planning to include Infosys as part of our Oracle, SAP and Workday Ecosystem Report, which is scheduled to be published in the summer of 2024.