Using Co-creation to Respond to the Accelerating Pace of "Digitalization"

Fujitsu Forum 2015 Presentation Report

Fujitsu Forum 2015 Tokyo, Fujitsu's largest annual event, was held on May 14-15 at the Tokyo International Forum in Yurakucho. Over the course of the event, several special presentations were held featuring guests from partner companies. They introduced several innovations produced through co-creation to solve societies' problems.

Fujitsu alone cannot solve the myriad social problems associated with the accelerating pace of "digitalization" (the process of using ICT to change business models in particular and society in general). It is essential to collaborate with and support partner companies over the long term. Here are introduced initiatives created from the unique partnerships these companies have built with Fujitsu.

Special Presentation: Transitioning to the digital era

Society is currently experiencing accelerating "digitalization." We are able to now use digital technologies such as mobile, cloud, big data, social media, and the Internet of Things (IoT) to completely transform business. In our guests' presentations, there was a roadmap to digitalization, as well as information about business opportunities and challenges created by an ecosystem in which decentralization is spreading. There was also an exploration of methods for obtaining value from the Internet of Everything (IoE).

Mr. Jou Oda is a Corporate Executive Officer at Fujitsu Limited. He believes IT is essential to respond to changes in the market. He pointed out that, "More than half of all companies aggressively investing in IT have increased their sales and profits." In particular, he noted the shift from Systems of Record (SoR)*1 to Systems of Engagement (SoE)*2. He presented a co-creation case study showing how Fujitsu improved productivity at Cisco through the use of data and manufacturing process efficiency.

*1 Systems of Record (SoR): processing and recording of routine/non-routine operations
*2 Systems of Engagement (SoE): proactive involvement in people, objects, and events

Next to take the podium was Mr. Edzard Overbeek, a Senior Vice President for Cisco Systems. He raised several global issues: the increasing elderly population, rapid industrialization, dwindling natural resources, and climate change. Then, he explored how technology might be used to address these issues on a global scale:
-Rapid innovation: harnessing the processing power of digital equipment
-Hyper-connectivity: achieving 100% internet connectivity by 2020
-Intelligent machines: using data from produced items

Unlike before, he predicts that disruptive business models will be the key to creating new business opportunities in the future.
His most intriguing comments concerned "the rapid progress of the digital revolution and destruction." While citing examples illustrating how nations and citizens have been benefited from digitalization, he said, "In the coming era of the Internet of Everything, there will be unprecedented business opportunities."

Mr. Overbeek placed the size of these opportunities at 14.4 trillion dollars in the private sector, and 4.6 trillion dollars for public institutions. As more than 38% of value added through IoE will be generated from insights through analysis, it will be necessary to utilize value that is derived through analysis in order to re-create businesses from scratch. Addressing Human Centric Innovation, he closed his presentation by describing how companies need digital transformation, and to place people at the center of activities.

  • Mr. Edzard Overbeek
    Senior Vice President, Cisco Systems

  • Mr. Jou Oda
    Corporate Executive Officer, Fujitsu Limited

Special Presentation: The new era of IoT starts with Intel and Fujitsu

At the beginning of her presentation, Intel K.K. president Ms. Makiko Eda greeted guests with a simple statement: "The advent of handheld computers was predicted about 50 years ago." She went on to describe how such ideas were foreseen in papers written in 1965. Citing Mr. Gordon Moore, one of Intel's founders, she said, "Just remember, whatever has been done can be outdone." This suggests the possibility of innovations that would overshadow even those springing from IoT and big data. Telling the audience she would introduce them to "the IoT business revolution being created by Intel and Fujitsu," Ms. Eda invited to the stage Mr. Doug Davis, the Senior Vice President and General Manager of the Internet of Things Group.

He explained Intel's IoT strategy. He pointed out that by 2020 the current market of 15 billion devices will grow to 50 billion. This level of market expansion will create new business opportunities. To address this market, Intel will offer processors focused around its x86 series, adding chips like the ATOM x3 SoC Processor Series with an integrated communication platform. He said Intel was preparing to continuously produce chips for everything "from sensing devices to gateways and servers." However, given the growing IoT market, he noted the importance of keeping up with innovations created in this area, saying, "One company cannot possibly cover the whole market. Therefore, we need to collaborate with many companies, one of which is Fujitsu."

Corporate Executive Officer at Fujitsu, Mr. Shingo Kagawa, described Fujitsu's approach to IoT. Using cars as an example, he explained how "introducing IoT adds the element of connectivity to the three elements of accelerating, braking and steering, transforming cars from mere transportation into helpful, interactive services that could even reduce driver stress." Beginning with the potential to revamp production, he stressed the hidden power of IoT to revolutionize work and lifestyles.

At the end of his presentation, Mr. Kagawa provided background to Fujitsu's collaboration with Intel. He explained how creating a viable ecosystem is vital to solving the many issues facing society. He ended his presentation by stating collaborating with partners would create added value and accelerate innovation.

  • Mr. Doug Davis
    Senior Vice President and General Manager
    Internet of Things Group, Intel Corporation

  • Ms. Makiko Eda
    President, Intel K.K.

  • Mr. Shingo Kagawa
    Corporate Executive Officer, Fujitsu Limited

Special Presentation: Transforming MS and Fujitsu for cloud & mobile first

The Fujitsu-Microsoft relationship is more than 25 years long. Corporate Executive Officer Mr. Hiroyuki Sakai began his presentation by noting the length, strength, and complementary nature of the companies' partnership. As an example, he noted that Fujitsu deployed Microsoft's Azure cloud computing platform under its own brand, namely, FUJITSU Cloud A5 for Microsoft Azure. In fact, Fujitsu is the only company in the world to deploy Azure in this way. In conjunction with these efforts, Microsoft Japan's Executive Vice President, Mr. Takuya Hirano, and Chief Evangelist, Mr. Motoaki Nishiwaki, introduced leading edge cloud and mobile solutions during their presentation.

Mr. Hirano noted that it's been 40 years since Microsoft founder Bill Gates made it his mission to put a computer on every desk. Over the years, Microsoft has introduced one new strategy after another: In 1995, the Internet; in 2010, a shift to the cloud; and in 2014, the company's new CEO, Mr. Satya Nadella, launched his vision based on a mobile-first, cloud-first policy.

On the upcoming release (at the time of the speech) of Windows 10 in 2015, he said, "We want to remove device barriers, and release one billion Windows 10 units around the world." For the new OS to gain widespread adoption, the development of Windows 10 applications and services that work across Windows Phone devices, IoT devices, and PCs is vital.

Mr. Nishiwaki then introduced the new Microsoft Surface Hub and Microsoft HoloLens devices in a video. To demonstrate results of the Microsoft-Fujitsu collaboration in the IoT field, he introduced a case study video showcasing the Fujitsu Eco-Management Dashboard solution and FUJITSU Cloud A5 for Microsoft Azure. The demo video featured vegetable factory greenhouses in Aizuwakamatsu, in Fukushima.

He also introduced a more compact Windows tablet under development that is, equipped with a 5.3-inch full HD display and biometric authentication and another tablet with enhanced chemical resistance for use in the healthcare field. All of the devices will be available from Fujitsu. His presentation delivered a real sense that these new mobile and cloud computing devices would impact people's lives and workplaces.

  • Mr. Takuya Hirano
    Executive Vice President, Microsoft Japan

  • Mr. Motoaki Nishiwaki
    Chief Evangelist, Microsoft Japan

  • Mr. Hiroyuki Sakai
    Corporate Executive Officer, Fujitsu Limited

Special Presentation: The Oracle cloud strategy, modern business and technology in the cloud

The relationship between Oracle and Fujitsu is more than 30 years old. 32 years ago, in 1983, Fujitsu loaded an Oracle database into its own mainframe. Around the same time, Fujitsu also began selling Sun Microsystems workstations. Looking back on this chapter, Fujitsu's Corporate Executive Officer, Mr. Akira Kabemoto said, "That was a turning point." The relationship between the two companies deepened rapidly.

Later, Fujitsu assisted in Oracle server development, OS development, and even database development: in 1988, sales began of the SPARC server, and in 1989, OEM sales of Oracle Database. SPARC servers were developed by Sun Microsystems, but featured Fujitsu semiconductors. In this way, Oracle, Sun Microsystems, and Fujitsu developed a mutually beneficial relationship that continues to this day.

One feature specific to the relationship between Oracle and Fujitsu is the fusion between state-of-the-art hardware and software. Mr. Kabemoto noted, "The compatibility between the Oracle Database and the SPARC M10 was outstanding. It performed 300 times better than the previous version delivered via Software on a Chip." This success proved the fusion achieved between two leading technologies.

The next speaker, a Chief Corporate Architect for Oracle, Mr. Edward Screven, took the stage to comment on the Oracle and Fujitsu partnership. He said, "Fujitsu has implemented Oracle technology in more than 6,000 projects in Japan, providing cooperation in diverse ways."

Oracle and Fujitsu currently face several global challenges: the graying of society; decreasing working-age population; increased demand for natural resources; and large-scale cyber-terrorism. Among these challenges, the graying of society reduces the productive population. This in turn increases the need for technology that improves efficiency and increases productivity. In other words, ICT.

To maintain people's current lifestyles, firstly greater energy efficiency must be achieved. ICT is essential to solving this problem. However, at present, many companies are not taking this opportunity to revamp IT infrastructure. The proprietary nature of applications running on this infrastructure vastly increases the costs of change. The problems associated with these tremendous costs have become apparent. In other words, society's problems cannot be solved by simply maintaining existing IT infrastructure, or updating it. Here, there are great expectations for the cloud.

Mr. Screven remarked, "Even in Japan, while total IT investment growth is stagnant at 0.8%, cloud usage is accelerating at a rate of 24.2%." Oracle's cloud SaaS, IaaS, and PaaS provide exactly the same environment, both on-premises and in the cloud, (including architecture, products, knowledge, and know-how). Oracle offers overwhelming advantages compared to its competitors. He closed his presentation talking about the superiority of Oracle's cloud technology, such as its powerful database integration strategy with Fujitsu.

  • Mr. Edward Screven
    Chief Corporate Architect, Oracle Corporation

  • Mr. Akira Kabemoto
    Corporate Executive Officer, Fujitsu Limited

Special Presentation: Real-time management in the hyper connected world--launch of SAP S/4HANA, the next-generation business suite!

This presentation attracted widespread interest. SAP announced SAP S/4HANA, its first next-generation business suite in 23 years. Many event participants were eager to find out how this suite will impact next-generation, real-time management. Now, all things can be networked, making the hyper connected world a reality. With some 7.5 billion devices connected to the network, the number of such devices out-number the 7.3 billion people on Earth.

Some predict that there will be 50 billion connected devices by 2020. Fujitsu believes that the SoR it has been providing to corporate users will no longer suffice and that customers now need SoE eco-systems. Thus, Fujitsu must collaborate with other companies. Fujitsu's Corporate Executive Officer, Mr. Katsuhiko Satou explained that, "this cannot be accomplished by a single, vertically integrated company. Horizontal integration is vital for industry collaboration."

Together with SAP, Fujitsu is using co-creation to respond to changes occurring in the hyper-connected world. SAP Japan president, Mr. Yuzuru Fukuda, addressed his company's progress toward Industry 4.0 in Germany. Here, he presented problems solved by SAP S/4HANA, introducing several real world examples of innovative business solutions.

For example, the sporting goods manufacturer Adidas adopted SAP HANA for its Mi Adidas platform, via which customers can customize items in a total of 1.4 trillion ways. He explained how Adidas achieved a system that can deliver customized products at the same prices as the standard models. America's iconic motorcycle manufacturer, Harley-Davidson also adopted SAP's solution for its Build Your Own Bike platform, allowing its customers to order detailed motorcycle customizations. By selling high-value-added bikes, the company can continue manufacturing its product in US domestic factories, paying relatively high wages.

The key to hyper connectivity is combining the cyber and the physical, and quickly detecting what is actually taking place. Other real world examples included a company that can identify when to replace truck tires before sustaining leaks or punctures. That's the way Mr. Fukuda described Pirelli's adoption of SAP S/4HANA for its Cyber Fleet solution. Another example of mission-critical systems, providing innovation in a hyper connected world.

  • Mr. Yuzuru Fukuda
    President and Representative Director SAP Japan

  • Mr. Katsuhiko Satou
    Corporate Executive Officer, Fujitsu Limited

Seminar: Salesforce customer success platform. A new level in customer experience. was established 16 years ago and the company established a Japan branch a year later. The company's global sales structure, offering sales support to many different industries, controls about 40% of the market. However, in the Japanese market, sales generated by the company's platform are much higher, occupying up to half the market. In Japan, some 150,000 companies are using the business platform. One of the company's strengths is revealed by the fact that 94% of companies that use their services once, say they would use them again. Of course, every company needs new customers as well. The company adds 160 to 170 new clients every month, averaging about 2,000 each year. Inc.'s Vice President of Services, Mr. Minoru Hoshina, addressed his company's steady growth, saying, "We're in touch with individual customers, but with regard to corporate and customer relations, we have no connections." In particular, in industries such as distribution, the company has almost no contact with its customers. He said that IT used to focus on Systems of Record; however, now with the importance of cloud, mobile, and social networks, it has evolved into Systems of Engagement so as to grasp customer opinions better. He also stressed the importance of developing Systems of Intelligence to gain maximum leverage from information.

Also, the company is focusing on CRM, providing customers with many advantages: sales growth; increased customer satisfaction; and higher marketing efficiency. Maintaining existing customer relationships is effective. Moreover, each department in a company must share such information throughout the organization. Mr. Hoshina described the company's efforts as being a "Customer Success Platform." The company believes that connecting with customers on the "other side of the device" is more important than IoT which connects devices together. What is being proposed is a new Internet of Customer (IoC) concept.

  • Mr. Minoru Hoshina
    Vice President, Services Co.,Ltd.

Seminar: The latest desktop environment for security challenges. Delivering multi-faceted malware protection.

How should companies deal with the threat of cyber-attacks, which is increasing daily? VMware K.K.'s General Manager of Solution Sales, Mr. Masato Akiyama described one strategy for solving a problem many companies are facing.

At present, many companies' information security concerns are centered around stopping data leaks. He cited the large data breach at the US supermarket chain, Target. He noted that the following year, the company's sales fell by half. He said, "Data leaks are often caused by insiders, but are now increasingly the result of external hackers seeking monetary gains." He pointed out that it is very difficult to mount a perfect defense against such attacks.

In addition, Japan's corporate information security budgets are about half of those elsewhere in the world. Many companies here have insufficient security measures. Going forward, he thinks Japanese companies will become increasingly targeted. The growing number of attacks, and the introduction of a national Japanese ID number system called "My Number" demand higher security measures. He pointed out that "Comprehensive security solutions are important as countermeasures to intrusions or security breaches." As it is difficult to completely prevent targeted attacks, post-attack action plans are very important. However, given the realities of current network environments, and the increased operational burdens on network segments, the prospects for improvement are not very realistic.

Here, Mr.Akiyama introduced VMware NSX, which could be used to create a simple virtual desktop to further subdivide segmentation using distributed firewall services provided through virtual machines. Without needing to worry about network configuration or equipment, companies can start small with partial roll-outs. VMware emphasizes the superiority of providing a practical solution that can be introduced in stages.

  • Mr. Masato Akiyama
    General Manager Solution Sales Division, VMware K.K.