Fujitsu remains bullish in tough economic times
By Edwin Yapp July 23, 2012
- Japanese IT vendor’s forecasts remain strong despite tough times ahead
- Acknowledges its brand perception not as good as competition, re-engineering to address this
FUJITSU Malaysia has set its sights on matching last year’s revenue growth while growing its operating profits for its latest fiscal year despite the potential global economic downturn and uncertainties over Malaysia’s looming general election.
Charles Lew, Fujitsu Malaysia’s president, said he expects the Japanese IT multinational to achieve between 26% and 30% in revenue growth for its 2012 financial year (FY), and hitting 250% growth in its operating profits in 2012, which spans from April 2012 to Mac 2013. Fujitsu had grown 31% in its FY11 year.
Speaking to the media in Kuala Lumpur today (July 23), Lew (pic) said that based on its sales bookings, backlog orders as well as what was already in its sales pipeline, Fujitsu is confident of achieving such growth despite the challenging times globally.
“Much of our business is focused on the government and public education sectors, as these are the areas that are still growing,” he said. “There were quite a few public sector large IT infrastructure projects that were held up last year so hopefully these projects will move this year.”
On why these government-related projects were held back, Lew said he did not know definitively, noting only that it could be possible that it was due to uncertainties over Malaysia’s impending general election. Malaysia’s general election must take place by April 2013 but speculation is rife that snap polls will be called before the year is up.
“The normal refresh cycle for technology in the public sector is between four and five years. There have also been some projects surrounding data center upgrades that have been held up,” he said, adding that despite the refresh cycle being up, there is still no word from the government on when this would take place.
Lew also said that despite the wider implications of the Euro zone crisis, Fujitsu Malaysia does not see an immediate impact on the local enterprise IT market as this could be due to a delayed reaction to the crisis out west. “I can’t comment about 2013, but for 2012, we’re confident with our forecasts.”
When asked how Fujitsu Malaysia plans to hedge against a downturn, especially if the public sector projects do not come through as expected, Lew said it’s a question of how to “keep its head above the water.” He however conceded though that Fujitsu Malaysia would have to look at cutting costs should this happen.
“We’ve been functioning with quite good cost efficiency so far and we have built in a buffer to weather the slow times should that happen.” Asked whether this would include retrenchment or not, Lew said that as a Japanese company, cutting costs isn’t about retrenching staff as Fujitsu’s culture is unlike companies from the west.
“For instance, during the 2008 financial crisis, executives in Japan took up to a 20% pay cut in order to bear out the recession instead of cutting staff.” Lew however did not indicate if this would happen in the local office if recession were to hit Malaysia.
Lew also said Fujitsu could also depend on the “loyalty and stickiness” of some of its customers, who have been its them for decades to weather the slowdown. Fujitsu Malaysia counts amongst some of its largest and most loyal clients including a number of notable Japanese names like Toyata, Panasonic, Aeon, and Sony. Other multinationals as its clients include Shell, British American Tobacco, and chipmaker AMD.
In spite of Fujitsu being very bullish about its business growth locally, Lew acknowledged that the Japanese IT giant still suffered from a perception that it was less successful than it actually is.
According to Michele Lum (pic), marketing director at Fujitsu Malaysia, Fujitsu’s track record is “one of the industry’s best kept secrets.” The company, she added, was very sales driven and was not known by many within industry circles.
Asked why this was so, Lum said the Fujitsu brand was quite fragmented and its perception as a multinational IT vendor was admittedly not as good as its competition, especially that of its American counterparts.
“But in the past three to four years, the company has geared itself at improving its brand amongst C-levels and industry associations. For example, we ran a four-month campaign comprising thought leadership luncheons, IT exhibitions, and alliance and industry sponsorship aimed at exposing ourselves to the industry.
“We’ve also increased our social media engagement on the web and made news more easily accessible to the industry. We’ve also launched our Facebook and LinkedIn pages to aid this process.”
Lew added, “Historically speaking, Fujitsu’s business was confined to Japan but in recent years, up to 40% of its revenue came from outside Japan. In the years to come, this figure would increase to 60%.
“Our aim at the end of the day is to be listed amongst the top three IT service providers in the country,” Lew said, adding that it was currently only in the top-10 list.