Fujitsu UK CEO positive about the road ahead

Fujitsu CEO Duncan Tait took the helm at the height of the economic slowdown and all the upheaval it triggered, but revenues and orders are on the rise again

Duncan Tait took the helm at Fujitsu at the height of the economic slowdown and all the upheaval it triggered, but revenues and orders are on the rise again.

Fujitsu is the world’s third biggest IT service provider, after it overtook CSC in Gartner's rankings following a 10% increase in sales in 2011. Only IBM and HP sell more IT services than Fujitsu globally.

In the UK it has maintained its position on the desktop services top table, despite setbacks, and has begun to build a strong cloud business.

It has not all been plain sailing, and Tait has had to oversee some challenges that have seen it make the news for the wrong reasons. Some doubted its ability to recover from a number of major setbacks.

Fujitsu had its £500m 10-year IT outsourcing deal with Thomson Reuters terminated last year after just four years, when the customer decided to take the work in-house.  

It also had the misfortune of winning a big deal with the Department of Work & Pensions (DWP) from HP, which was cancelled before it did any work on it.

Fujitsu was also publicly criticised by councillors on the Highland Council for alleged failures to deliver parts of a £70m IT outsourcing deal that covered schools as well as the council’s corporate services.

Turning Fujitsu's fortunes around

Under the guidance of Tait, however, it has made steady progress in the UK. Highlights include taking over a desktop outsourcing deal at Centrica, and in the process confirming itself as one of the few suppliers that can provide these highly commoditised services at the right price.

It recently won a megadeal with the Post Office to act as service integrator on its telephone and broadband service. Under the deal, which is worth an estimated £500m over five years, Fujitsu will oversee the entire migration process, both of the network and of the applications. TalkTalk provides the network service, Capita the customer services, and MDS the billing, with Fujitsu managing and completing the integration.

Tait says last year Fujitsu UK registered a 3.6% increase in revenue and a 40% increase in order volume. Tait is positive about the immediate future and says after three years of IT budget lockdown, businesses are beginning to spend more, with the retail and financial services sectors its most active customers.

He has been in his role as Fujitsu UK CEO for about 15 months, during which time he has overseen a rebalancing of its business to move forward with more focus on the private sector and cloud computing.

He says the recent economic turmoil has changed business. Fujitsu is one of the government’s biggest IT suppliers, so when it started to cut costs Fujitsu was at risk of losing significant turnover.

The company has moved from having about 70% of its sales in the public sector a few years ago, to having 55% public and 45% private. He says the company aims to further redress this balance. “We are trying to ensure we are going forward with our private sector [business], because in the past we were mainly public sector,” says Tait.

He says Fujitsu is rebalancing through more business in existing private sector clients as well as new customers. All of these deals, says Tait, have a major cloud component. 

Rising demand for cloud services

Fujitsu UK now makes 10% of its revenue from cloud services.

For example, in 2011 security company G4S outsourced its IT infrastructure and services to Fujitsu for £32.9m over seven years. Fujitsu's cloud-based infrastructure-as-a-service (IaaS) architecture will deliver applications, with workers migrated to Windows 7 and a virtual Citrix desktop. This will serve 3,500 desktops and laptops, and 10,500 e-mail clients.

Last year also saw home credit provider International Personal Finance (IPF) reduce costs and improve business agility by moving its IT infrastructure into a private cloud built by Fujitsu. Under the £10m three-year contract, Fujitsu will host IPF's applications and data, and charge on a pay-per-use model.

In 2010, Fujitsu announced its cloud strategy with the deployment of a globally standardised cloud platform. The global cloud platform offers customers standardised IT in the cloud across the world.  

Tait says now that budgets are unlocked, companies don’t just want services to reduce costs, but also to grow their businesses. A recent study commissioned by Fujitsu revealed that two-thirds of executives don’t believe their business can respond quickly to business changes such as customer demand and new competitive threats. The Fit for Change study revealed that almost 60% believe technology is the barrier to quick change.

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