■ Future Outlook
2. Business sector outlook and growth strategy
As a growth strategy supported by the system in the future, we will expand the existing cloud, ERP and database-related businesses in the solution business, and expand outsourcing businesses such as data center services, which will become a stock-based business, and the product business will maintain a balance. This is a strategy to continue to maintain double-digit growth. The outlook and priority measures of each business for the fiscal year ending in June 2022 are as follows.
(1) Solution business
In terms of the solution business, the company plans to use its high-tech capabilities in the three areas of database/cloud infrastructure, ServiceNow and ERP to continue to win orders and achieve double-digit growth.
a) ServiceNow related
ServiceNow related products are in strong demand, and the amount of consultation is more than the company’s human resources. Therefore, it seems that more and more cases of the company using external partners as a prime contractor. Human resources development and external expansion partners continue to increase. We believe that if we continue , Sales will have a great opportunity for growth.
As mentioned above, “ServiceNow” is a cloud platform service that has rapidly spread and expanded in recent years. It has a variety of functions and contributes to the standardization and automation of enterprise operations. With the efforts of enterprises to transform to DX, growth is accelerating. In order to meet the strong demand, the Japanese company ServiceNow Japan (United) has adopted “further expansion and strengthening of the partner ecosystem” as one of its business strategies in 2021. In response to the industry’s growing demand for products, the policy is to strengthen cooperation with partners who have expertise in various industries. In addition, the goal is to double the number of certified engineers in Japan from the current 600 to around 1,200, which indicates a potential demand. Recently, efforts to promote DX support solutions for local governments have been strengthened, and it seems that the strategy is not only for the company but also for the market development of the public sector. For these reasons, we expect that the demand for “ServiceNow” will continue to grow rapidly in the medium term.
On the other hand, because it is a high-growth area, it is expected that the number of companies entering the market in the future will increase and competition will become more intense. The company is the first domestic company to sign a partnership contract in Japan. In 2017, it was first recognized as a “Bronze Services Partner”*, and in 2019, “Elite” was recognized as a “partner”. As of June 2021, nine Japanese companies, including our company, have been certified as “elite partners”, but it is expected that future human resource development will make progress, including these “elite partners” and new partners. We believe that how to increase the number of certified engineers in the company will be the key to future growth. In addition, as one of the differentiation strategies with competitors, we are developing applications (LINE linkage functions, etc.) to supplement the standard functions of “ServiceNow”.
* ServiceNow’s partner program certification is based on customer satisfaction and sales/introduction results. As of June 2021, the number of ServiceNow certified construction qualifications obtained by the company in Japan ranked second, with a total of 84 qualifications obtained.
b) Database and cloud infrastructure related
In terms of database and cloud infrastructure, it is expected that the number of cloud infrastructure construction and migration support projects such as Microsoft Azure and AWS will continue to increase, and through the development and provision of account resale and optional services for each cloud, the stock type is an accumulation Business profit strategy. In addition, due to the recent increase in GCP (Google Cloud Platform) inquiries, we have developed the next-generation data analysis platform “ADDPLAT” that utilizes Google Cloud services, and will start providing it in June 2021. Its characteristic is that it is a service that analyzes big data at low cost and in a short time, and can be used for management strategies and marketing measures. Approximately 40 people have passed Google Cloud certification to meet various needs and are expected to contribute to sales growth and related to Microsoft Azure and AWS.
In addition, on the AWS side, it was the first to obtain the AWS APN partner system “Oracle Competency”* certification in Japan in 2014. It is expected to stabilize orders in the future, centering on the Oracle database cloud migration project. Most of these major cloud platform service introduction projects are recommended by customers from various companies, so we can ensure continuous orders without incurring operating costs, and unlike custom development projects, we also manage projects. Because it is relatively easy and the risk of profit fluctuations is small, it is expected that profits will grow steadily along with sales growth.
*”Oracle Competence” is AWS’s assessment and certification of partners who have the technology and track record to provide comprehensive support for the design, deployment, management, and operation of Oracle-based workloads running on the AWS cloud. As of June 2021, there are 5 domestic enterprises that have been certified.
c) ERP related
In terms of ERP-related projects, there are a large number of “SAP ERP” migration projects, which will soon run out of maintenance support in 2027, and it is expected that they will maintain a growth of about 10% until at least 2027. Currently, it is divided into companies that are migrating from the existing system “SAP ERP” to the next-generation solution “SAP S/4 HANA” and companies that will continue to use “SAP ERP” for the time being. need. In addition, “SAP S/4 HANA” provides an on-premises version and a SaaS version. Since the on-premises version can be used in AWS, Google’s public cloud, SAP’s private cloud, etc., it is a project that supports migration to the cloud. There are also many.
Regarding “SAP ERP”, about 180 engineers including the company and its subsidiary T4C have registered. In addition to supporting the development of the main areas and all layers (infrastructure, middleware, applications) of “SAP ERP”, “SAP ERP” We also have the technology and know-how of ERP products other than “SAP ERP”. Our advantage is that we can provide a wide range of stable services according to customer needs. In response to the increasing demand in 2027, we will continue to increase and train engineers, while establishing a system that can handle the near-shore maintenance of existing systems in the Hokuriku region, while aiming for steady growth. One policy goes. Although there are many competitors supporting the use of ERP, in the case of large-scale projects, in many cases, NRI and Accenture Co., Ltd. will jointly promote the project as the main contractor instead of directly accepting orders. risk.
(Written by Yuzuru Sato, Visiting Analyst at FISCO)
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