Fujitsu’s Strategic Evolution: Transforming for a Future with Uvance at the Core

On Oct. 1, TBR attended Fujitsu’s Executive Analyst Day in Santa Clara, Calif., and engaged with Fujitsu leaders, including Tim White, chief strategy officer; Ted Okada, SVP and head of Technology; Ted Nakahara, SVP and Head of Strategic Alliances; Fleur Copping, VP of Strategic Alliances in Regions; and Asif Poonja, EVP and CEO of Fujitsu Americas. The following reflects main stage presentations, breakout sessions and one-on-one discussions, as well as TBR’s ongoing analysis of Fujitsu’s business model, strategy and performance.

Fujitsu in Transition, with Clear Direction and Intent, Playing to Strengths

Three things about Fujitsu stand out in a crowded IT services and consulting market. First, the company is in the middle of an organizational evolution, changing its business model to fit emerging client demands and orienting its go-to-market strategy around Uvance. Second, Fujitsu’s commitment to change in the Americas has completely remade the company around IT services and consulting, with aspirations to become a technology consulting leader. And third, Fujitsu’s alliances strategy, while still dependent on labor-intensive relationships and persistent account-level management, includes all the best practices TBR has seen from larger competitors, with at least one unique twist. In short, Fujitsu’s evolution will likely make the company a highly capable contender as the IT services and consulting market changes.

At the start of the analyst event, Tim White, chief strategy officer, explained that Fujitsu’s transition has been underway for a few years and has included allowing the Americas business to shed everything except services. As part of the overall transition, Fujitsu committed to expanding consulting while continuing to deliver on core IT services and modernizations. White noted that Fujitsu is roughly halfway through a three-year plan to grow services and the Americas region has already surpassed targets for 2024. For example, Uvance accounts for 37% of Fujitsu Americas’ business, above the 30% goal.

Critically, according to White, Fujitsu has not lost a step on technology advances or quality of services delivered, so clients and alliance partners continue to be well served. The change — the evolution — is primarily in how Fujitsu sees itself and its future. And that future is Uvance.

In TBR’s view, understanding Fujitsu’s existing and evolving business model, strategy and performance requires, perhaps surprisingly, a certain separation from the typical analysis, if only because of Fujitsu’s current transition.

While there is perhaps some uncertainty among analysts around Fujitsu’s brand, specific offerings and organizational structure, TBR sees no evidence that Fujitsu’s clients and technology alliance partners lack the clarity required to make decisions about Fujitsu’s capabilities, scale and skills.

Undoubtedly, Fujitsu’s brand in the Americas could use a significant boost — without which a ceiling could remain for the company’s growth — but the importance of marketwide brand recognition pales in comparison to a successful track record of delivering IT services and consulting, providing innovative solutions, and leveraging the latest technologies to solve clients’ problems.

Uvance Is “the Future State of Fujitsu’s Portfolio”

Fujitsu’s leaders stressed the centrality of Uvance in the company’s strategy and vision for IT services, consulting and technology. White described Uvance as “the future state of Fujitsu’s portfolio.” Asif Poonja, CEO of Americas, said, “Uvance is the center of our strategy.” At the center of Uvance is consulting. Fujitsu announced a goal to hire 10,000 consultants, but White and others explained that Fujitsu’s focus is not the number but the portfolio shift toward consulting while still serving clients who need core IT services and modernization.

Poonja noted that Fujitsu will focus on technology consulting, rather than McKinsey-style business consulting, playing to Fujitsu’s legacy technology strengths. In TBR’s view, technology-led consulting reflects the current demand among enterprise consulting buyers to infuse every consulting engagement with technology, a trend well underway before the hype began around generative AI (GenAI). Fujitsu’s leaders added that Uvance Wayfinders — essentially business and technology consultants — are able to pull together all of Fujitsu’s capabilities and offerings.

In TBR’s view, Uvance is the framework around the company’s “SaaS-like” business model, with the leaders using the term “SaaS-like” but recognizing the phrasing may need further refinement and/or explanation. Fujitsu will use platform-enabled services to drive higher-value conversations and engagements, led by the consultants the company is planning to hire and/or acquire. Fujitsu will sell IP when needed and drive managed services through its delivery capabilities. The shift in the Americas toward becoming an asset-light organization is the first step, and the second step is expanding consulting capabilities and scale. The third step is organizing delivery under a globally run P&L (which Fujitsu may have already begun).

Meanwhile, modernization services — moving from mainframe to cloud — remains the engine that keeps Fujitsu running. The company still has its own data centers outside the U.S. and also still has plenty of clients running on mainframe, especially in their core verticals, like public services. For TBR, Uvance’s success may depend on broader adoption of the asset-light Americas strategy, albeit at a pace that does not compromise quality or lose clients in core markets. Again, Uvance is the future state of Fujitsu’s portfolio.

Fujitsu Americas: “Leveraging Global Pillars to Grow”

As described by Poonja and White, Fujitsu in the Americas has persistently pared down its offerings to focus only on IT services and technology consulting, playing to Fujitsu’s strengths and concentrating on industries in which the company has proven capabilities, well-established relationships with clients and differentiated offerings.

Poonja added that, although Fujitsu Americas earned a small percentage of Fujitsu’s overall revenues, corporate leadership in Japan recognize the importance of the Americas market and understand the challenges of building a more widely known brand. Poonja stressed that Fujitsu Americas would continue “leveraging global pillars to grow” while staying focused on regional strengths, specifically in government, manufacturing and AI.

In TBR’s view, Fujitsu Americas’ current state and trajectory align well with Fujitsu’s overall corporate strategy. The business aspires to be a top technology consulting company and appreciates the difference between being skilled at technologies and being able to make the business case for Fujitsu’s solutions. As an integral part of its strategy, Fujitsu Americas consistently pulls in the global company’s broader strengths and capabilities.

The use cases that Fujitsu’s leaders shared during the event highlighted the company’s technology, such as 5G and AI, and its deployable, offshore scale. Overall, Fujitsu Americas’ leadership presented a compelling story of evolution, strategic focus, early positive results and appreciation for current weaknesses. In contrast to analyst events dominated by marketing messages, Fujitsu maintained a substantive and clear-eyed atmosphere, with discussions centered on realistic expectations for Fujitsu Americas’ changing position in the IT services and consulting market.

Fujitsu’s Alliances: Doing the Hard Work While Taking Customer Zero to Another Level

In both the formal presentations and the informal discussions, Fujitsu’s leaders impressed TBR with the fullness and maturity of the company’s alliances strategy. The ecosystem has changed substantially in recent years, forcing companies to rethink their partnering strategies and more closely examine the best practices of peers, competitors and alliance partners. This shift has been an ongoing focus of TBR’s research, which has increasingly been used by alliance leaders at global technology companies as they undergo this transformation.

As part of this research, TBR has analyzed a wide range of alliance strategies and activities, from inadequate and underfunded to strategically thoughtful and exceptionally well managed. Fujitsu Americas, in TBR’s assessment, lands solidly in the latter category, based on the full range of investments and activities that Fujitsu’s leaders described with respect to their five strategic partners: Amazon Web Services (AWS), SAP, Microsoft, Salesforce and ServiceNow. (Note: See TBR’s ecosystem reports for more information.)

According to Fujitsu’s leaders, the next strategic partner will be determined by Uvance’s business strategy and continued evolution in the technology space, particularly AI. Keeping perspective on the challenges of managing technology partners, Fleur Copping, VP of Strategic Alliances in Regions, noted that every alliance relationship requires constant attention and, often, engagement-by-engagement reinforcement around Fujitsu’s offerings, capabilities and value proposition. Copping further acknowledged that Fujitsu needs to strengthen partner cosell activities. In other words, even when executing on all the best practices, alliance management remains a hard slog.

During the event, TBR noted two additional points on alliances — areas that are perhaps unique to Fujitsu. First, TBR has consistently heard that the customer zero approach to new technologies and offerings resonates with clients by bringing credibility and assurance. IT services companies, consultancies and their technology partners have also told TBR that the customer zero approach helps solidify alliances and can lead to innovations and new solutions. Fujitsu appears to be taking customer zero to the next level. For example, Copping described how Fujitsu brought its internal human resource management professionals to a client meeting about a joint Fujitsu-ServiceNow opportunity. The Fujitsu professionals told the client about their own experiences using the ServiceNow solution. This more personal touch resonated with the client and demonstrated the fullness of Fujitsu’s capabilities to alliance partner ServiceNow.

Second, Copping noted that because many of Fujitsu’s customers “don’t have as much of a voice” with the cloud vendors and software giants as the largest enterprises, Fujitsu can be an advocate for these small and midsize enterprises, amplifying their concerns and needs to the likes of Microsoft and SAP. TBR has not heard Fujitsu’s peers explicitly state this marketing message. As a matter of positioning, particularly with technology partners, Fujitsu’s message could be another way of gaining mindshare and differentiating from IT services and consulting competitors.

Consulting Is Harder Than It Looks; Fujitsu Has a Good Plan

White “unabashedly” characterized Fujitsu as a technology company, but emphasized using technology as a means to deliver services rather than making technology a commodity play. In the Americas in particular, Fujitsu would not “move away from our heritage as a technology company” but would more fully embrace consulting and the future portfolio of Uvance.

In TBR’s view, keeping Fujitsu’s heralded research, innovation and technology capabilities as foundational strengths makes strategic sense while leaving open questions around consulting. For example, one Fujitsu leader outlined the company’s AI sales approach in four basic steps:

Get the client interested in Fujitsu’s technology
Do a proof of concept with Fujitsu’s AI platform
Allow the client to use a precommercial instance of the platform
Bring in Uvance to develop a full solution, highly customized to the client

The fourth step, at a minimum, requires consulting skills, business knowledge and industry expertise, although many of Fujitsu’s peers include those elements throughout the sales and delivery process. Recruiting (or acquiring), retaining and managing consulting talent could affect Fujitsu’s corporate culture and undoubtedly will challenge Fujitsu’s leadership.

Further, and perhaps the most significant obstacle for Fujitsu in the Americas, will be gaining permission from clients to deliver consulting. By narrowing its scope to technology consulting — not the broad swath of strategy and operations consulting — Fujitsu plays to its own strengths, lessens the marketing load, and likely does not give up market share as the company is unlikely to displace firms like McKinsey & Co. or Boston Consulting Group (BCG).

Part of gaining permission, in TBR’s view, will be positioning Fujitsu differently with its current clients, particularly with respect to the key personas interacting with Fujitsu professionals. During the event, one Fujitsu leader described current clients’ struggles to adopt GenAI as a combination of an inability to do the basic work of making their data usable, the uncertainty around return on investment, and a fear of running afoul of the law as new regulations come into effect.

Yes, Fujitsu can address all of these concerns, but these hurdles impact and reflect the responsibilities of three different personas within an enterprise. Fujitsu’s challenge will be to become the preferred technology consulting provider for all three personas. In short, consulting is harder than it looks, and TBR believes Fujitsu has the right vision, strategy and approach. We will continue to monitor the company’s ability to execute.

TBR’s ongoing coverage of Fujitsu includes dedicated quarterly reports and inclusion in appropriate benchmarks, market landscapes and ecosystem reports. Log in to TBR Insight Center™ to view all current research.