Strengths in Security and Expanding Demand

「Private-sector companies are also beginning to strengthen security measures across their entire supply chains and to make ongoing security investments with the AI era in mind.」

「Within DX, cloud adoption, the use of generative AI and stronger cybersecurity measures were positioned as the most important areas, and related investment expanded across a broad range of industries.」

「Within DX, cloud adoption, the use of generative AI and stronger cybersecurity measures were positioned as the most important areas, and related investment expanded across a broad range of industries.」

「Against this backdrop, our cloud-based multifactor authentication service Soliton OneGate was certified under the Information system Security Management and Assessment Program for Government (ISMAP).」

「Companies, government agencies and local governments are increasingly pursuing DX to improve productivity and strengthen competitiveness. As DX progresses, the importance of protecting data and defending systems, in other words, implementing IT security measures, continues to grow. Demand remains solid for basic measures such as authentication and network separation, which we provide as part of our IT security offerings. In line with the growing debate over strengthening Japan's national cybersecurity framework, we appointed a globally recognized practitioner with extensive field experience as an outside director and established Cyber Defense Institute, Inc. as a wholly owned subsidiary.」

「IT investment remains strong as companies, government agencies and local governments pursue changes to business processes and business models through DX. Legacy core systems are being replaced with systems that use the cloud, and demand for stronger security is also expanding steadily. Meanwhile, based on the three national security documents approved by the Cabinet in December 2022, the government is leading discussions from both national-security and economic-security perspectives.」

「IT investment remains strong across companies, government agencies and local governments, including investment in business-process reform through DX and the adoption of new digital services. Meanwhile, cyberattacks have become extremely widespread, affecting many websites and servers. Ransomware attacks are also becoming more malicious, and cases of double extortion, in which companies and others are subjected to both financial demands and the exposure of confidential information, are increasing rapidly. Demand is expected for our ASM (Attack Surface Management) services, which diagnose network vulnerabilities, and services that strengthen authentication.」

「As IT use becomes established across industries and business functions, cyberattacks are increasing and the damage is spreading. Attention is focusing on basic countermeasures such as authentication, our area of expertise in IT security, network separation, and technologies such as VVAULT, which stores important business information locally within the organization on a daily basis.」

「IT investment, including corporate and government DX, the use of cloud services and the development of new AI-based services, continued to expand steadily, while demand in the IT security field in which we specialize also grew solidly. Meanwhile, Russia's invasion of Ukraine completely changed national security strategies. In December 2022, the Japanese government approved the three national security documents, comprising the National Security Strategy, National Defense Strategy and Defense Buildup Program. It was a year in which cybersecurity measures entered a new phase in both the public and private sectors.」

「As cyberattack countermeasures become more organized and their activities expand, we expect more opportunities for our company in the coming fiscal year.」

「Demand for what Soliton Systems broadly covers as IT security remains robust. Regardless of business efficiency, we sense that the market could be virtually endless, with no apparent ceiling.」

「We worked to propose systematic and practical security measures centered on unique products and services based on our proprietary technologies.」

「As digitalization progresses, demand for the security fields in which we specialize, including ID and authentication, secure telework environments and cybersecurity measures, is expanding steadily, although the current momentum is driven largely by sentiment.」

「Sales of products and services such as Soliton SecureDesktop, which enables secure telework, expanded in the public sector. Under the previously mentioned GIGA School Initiative, sales were strong for NetAttest EPS and NetAttest D3, which provide stable and secure in-school networks, and Soliton DNS Guard, which prevents access to harmful websites.」

「Sales of products and services such as Soliton SecureDesktop (SSD), which enables secure telework, increased to more than three times the previous fiscal year's level. Demand expanded from the private sector to the public sector, and telework-related services, including SSD, evolved into our core cloud services.」

「Segment profit increased as a result of our focus on selling our own products and services. Sales of Soliton SecureDesktop (SSD) and other offerings that enable secure telework increased substantially year on year. Demand has emerged across both the private and public sectors, and SSD-related offerings have evolved into our core cloud services. Under the previously mentioned GIGA School Initiative, adoption progressed in many areas nationwide for NetAttest EPS and NetAttest D3, which provide stable and secure in-school networks, and Soliton DNS Guard, which prevents access to harmful websites.」

「Telework from home became a practical response and a prerequisite for business continuity, and the IT infrastructure required to support it suddenly attracted attention. Products and services enabling telework were urgently needed, and our telework services are becoming a leading offering in this area. The market extends beyond companies to local governments and is broad in scope.」

「Meanwhile, as the spread of COVID-19 continued, demand increased for Soliton SecureDesktop (SSD), which is required for working from home.」

「All of our products belong to the core or infrastructure layer of IT systems. Accordingly, our market is global in scale, and naturally our competitors are global as well. We believe that technology with global relevance and speed of execution will be decisive factors in corporate growth.」

「As cloud services become more widespread, people are increasingly accessing data regardless of location or device. In our security business, the importance of authentication technology to protect data from unauthorized access is growing.」

「As cashless payments become more widespread, there are increasing opportunities to apply the expertise we have accumulated in identity verification and authentication, which are among our core technologies in security.」

「As you know, in security, our principal business, cyberattacks are becoming more frequent worldwide and are also becoming more sophisticated and larger in scale. Demand for specialized services addressing security threats is therefore expanding.」

「Private-sector demand for security is continuing to expand steadily, and we are actively promoting sales of our existing products and services.」

「In security, our core business, networks are becoming more complex and the range of devices in use is expanding, partly because of the adoption of work-style reform, making information management increasingly difficult. Cyberattacks are also becoming more sophisticated, accelerating the need for more advanced and specialized security measures. Ordinary companies are reaching the limits of what they can operate and manage, and how they can respond when failures occur, resulting in a paradigm shift toward greater demand for services rather than the sale of physical products.」

「Special demand from government agencies, including measures to strengthen municipal information systems, declined. However, demand has emerged to replace the IC cards previously used with facial recognition for our SmartOn product, which has the leading industry share in two-factor authentication, and inquiries are increasing. Demand for mobile security, particularly from companies, has also remained firm amid efforts to implement work-style reform.」

「Demand from government agencies eased after measures to strengthen municipal information systems in each municipality and municipal information-security clouds in each prefecture had largely run their course in the previous fiscal year. However, targeted cyberattacks against governments and companies have not stopped, and serious damage from cyberattacks, including cryptocurrency outflows, is becoming more widely recognized across society.」

「In the IT security areas where we have strengths, targeted cyberattacks against government agencies and companies continue to occur frequently. There also appear to be many attacks by state-level organizations, making the conflict between attacks and countermeasures resemble an endless struggle.」

「Targeted cyberattacks against government agencies and companies continue to occur frequently in the security areas where we have strengths, resulting in the leakage of customer information, credit-card information and email addresses, among other data.」

「Security is our core business. Targeted cyberattacks are occurring worldwide, and addressing increasingly advanced and sophisticated attacks has become an urgent issue. As the use of IoT, AI, cloud computing and other technologies becomes widespread, new security threats are also attracting attention, increasing the need to innovate and strengthen security technologies.」

「Sales of products addressing the strengthening of municipal information systems and solutions for targeted cyberattacks are growing, while demand is gradually increasing for products that support work-style reform in a secure environment. At the same time, IoT is creating more opportunities to connect to the internet and improving convenience across society, but the threats associated with being connected are becoming more apparent, increasing the need for innovation in new security technologies.」

「Our core business, IT security, is an area in which we have particular strengths. Cyberattacks are becoming increasingly sophisticated and complex, are recognized as a major business risk for governments and companies, and are driving an upward trend in investment.」

「In the security field, one of our strengths, cyberattacks are becoming increasingly sophisticated and complex. They are recognized as a major risk for governments and businesses, prompting more active efforts to strengthen security as a defensive measure. Orders are also increasing for products supporting the strengthening of municipal information systems and for security services for smart devices that address increasingly diverse work arrangements.」

「Demand is increasing for our security offerings, an area in which we have particular strengths, including products supporting the strengthening of municipal information systems, security services for smart devices, and solutions for targeted cyberattacks.」