Fujitsu prepares for a new stage in the LatAm arena

Founded in 1935 and known for its hardware, Tokyo-based Fujitsu is a key player in IT projects and corporate digital transformation initiatives.

The group is estimated to be the world's sixth-largest IT services provider by annual revenue, with 3.71tn yen (US$25bn) in its fiscal year ending March 31. 

Americas CEO Asif Poonja, who was appointed in April, talks about the Japanese group’s vision for regional markets.

BNamericas: You took office a few months ago, but what can you say about the relevance of Latin America for Fujitsu’s strategy and your plans and vision for the region?

Poonja: We’re seeing a lot of digital transformation on various fronts. A lot of work going on around systems automation, integration and notably in the network space. Around 5G and what can we do around 5G.

The leader of our network business in South America met with a few executives a month ago and there were huge conversations around that. But what we’re also seeing is that it’s not moving at the pace that some other regions are. So it’s a lot of exploratory-like movements. It’s not a bad thing, because it starts with interest. 

What we’re now seeing, especially in the Brazilian market, which is a huge focus for us, is tier 1, tier 2 service providers, as an example, talking about driving new forms of 5G deployments. 

We’re also seeing and talking to customers looking to modernize their IT infrastructure. Are they still on legacy mainframes, are they unable to do the connectivity that they need to do because of that? 

We had one of our key customers from Chile joining us in Tokyo in July for our global event. This CIO was blown away by what we were doing in the network space, digital transformation, AI and high-performance computing.

And then a third piece is our strength in certain automotive accounts that have connections to our Japan business and global business. We’re supporting their digital transformation, globally and regionally.

BNamericas: Which company was that particular CIO from?

Poonja: A large manufacturing distributor, which is another industry that’s a key focus for us. This executive was interested in our Uvance platform and what we can do around sustainability and the circular economy. This is one of the pillars of our Uvance take. 

He was also interested in how we can deploy AI and whether we could do a private 5G play in their environment. This is a customer we traditionally focused on on the infrastructure side. So this is an example of how we’re expanding our scope.

BNamericas: In an interview last year, Fujitsu told us about upping the focus on the telecoms front in Latin America. How has that evolved?

Poonja: Like I said earlier, we’re still having heavy discussions. We want to invest further in that space. It’s moving, but it’s not at the point right now where it needs to be. 

Now, if in the past this was more of a vision, it’s now starting to become a reality with hard conversations. But the deals are still not there. It’s a slow journey, these are major decisions by the companies.

BNamericas: How do you see the datacenter segment, a booming market in Brazil, Mexico, Chile and Colombia, as well as other corners of Latin America? Is that an opportunity for you?

Poonja: I wrote about that in an article a few months ago, when I talked about how we got out of the datacenter business in North America.

In North America, it was a commodity for us. Everyone was going cloud, is still going cloud, and we didn’t have the size and scale in that market to compete. So we made the decision to exit the datacenter business in North America and jump on the wagon of the three cloud kings [AWS, Microsoft and Google] and really support them in partnerships.

In the Caribbean, it’s a bit different. Mervyn [Eyre, CEO of Fujitsu Caribbean] and the team realized that the datacenter business is a core essential business with the wrap-around services, the apps, the push of Uvance. The datacenter business is very critical in the countries that we work with in the Caribbean.

In South America, it’s not a key business of ours today. We’ve had debates about it. Can we compete with those players or should we partner with those players? That’s the key component. We’re leaning towards the second, similar to the strategy in North America. 

It’s a large market, and to have the size and scale to do so it would have to be an acquisition. We can’t do it organically. In the absence of that, a partnership makes sense so that we can continue to serve along the strategy we’re looking at, around Uvance’s core pillars and core technologies. That’s a debate we have all the time in the South America market. Where we should place our bets.

BNamericas: And where should those be?

Poonja: Networks is one of them we’re not going to give up on and that will continue to drive forward. There’s an opportunity in the sustainable manufacturing space, plus the core technologies of AI.

If I take a step back just for a moment, our global strategy says seven key priorities under Uvance, of which four are verticals around sustainable manufacturing, consumer experience, trusted society, health living. 

Not your traditional business, because we believe they all blend nowadays. And then the horizontals of digital shifts, hybrid IT and business applications.

In hybrid IT, there are elements of it where you can have your own datacenter. That’s a true hybrid. We’re not doing that in North America, we’re doing that in the Caribbean, we’re debating about South America. And we have that in Europe today.

In the core technologies, the two key ones we’re driving hard throughout the Americas are AI and 5G or the networks. That is our overarching strategy for the Americas.

BNamericas: How exactly are you looking into AI, generative AI? Are you partnering with big players in this field as well?

Poonja: Right now, I think that the biggest challenge in AI is that everything is one-off. To make money, to develop, you need to have repeatability. The challenge right now is that you go in, sit down, you try to find use cases, it’s very unique, very resource-intensive. 

You invest a lot, customers invest a lot. You may get to a solution. But can you make money, can you make a profit? How do you make it sustainable in the long term? Those conversations are tough and there are few use cases out there.

What we’re looking into, under our Uvance portfolio, is how to embed components of AI into what we offer. These are the conversations we’re having. We’re not, at the moment, deeply collaborating with anyone on the AI part. 

Globally, our strategic partnerships are with SAP, ServiceNow, Salesforce, Microsoft, as the top four, with AWS lingering around. Those are the first plays as we start to think about partnerships. Even internally, for our own systems, ERP, CRM, etc, inherited from a series of acquisitions. We’re selecting one of each of those core partners as we integrate our systems.

BNamericas: What are your main markets right now in the region?

Poonja: In the Caribbean, we have a key focus on three countries: Jamaica, Barbados and Trinidad & Tobago, notably with some of the largest banks in the region, or with the transformation of social services in T&T.

In South America, it’s primarily Brazil, with some pockets in Chile, Uruguay, Argentina and Colombia. We’ve been reviewing the whole South America strategy over the last months.

BNamericas: Are you mapping out acquisitions?

Poonja: Definitely. I came on board on April 1st and as we were planning for the budget before taking the role, one of the things we established is that we cannot do our growth plan without M&A. The growth targets are significant for the Americas region over the next three years.

So M&A is a key pillar and one of the key priorities of my chief strategy officer for the Americas region. He is looking into that. First priority, the US. We’re going to start from there and then go through South America, Caribbean, Canada.