Product Obsolescence and Erosion of Competitive Advantages Due to Technological Change and Intensifying Competition

「Through 株式会社WEEL, we are incorporating the latest developments in AI technology and advancing the integration of AI technology into our data integration platform. We are also bringing together the time-series analysis technology and knowledge of large language models of 株式会社メロン and the technical capabilities of デジタルトランスコミュニケーションズ株式会社 in the EDI/EAI fields to strengthen the group's research and development structure.」

「Accordingly, we do not believe that demand will decline immediately as AI advances. In the short term, rapid progress in generative AI has prompted market reactions, including selling of shares, particularly in accounting-related and human-resources SaaS companies, but the impact on actual demand for our business is limited. Rather, as AI adoption advances, the importance of ensuring accurate data integration and high security will increase further, so we recognize that the positive impact on our company will be significant over the medium to long term.」

「Technological changes accompanying the recent development and evolution of information technologies, including network and software technologies, have been rapid. In particular, technological innovations such as generative AI and large language models have resulted in intense development and sales competition in the software market on a daily basis.」

「The market and technological environments may change at a pace exceeding our group's expectations. We also anticipate increasing pressure for price reductions due to intensifying competition, including from new entrants, the launch of competitively superior new products by competitors, and strategic alliances among competitors.」

「However, the market and technological environments surrounding our business may change at a pace exceeding our group's expectations. We also anticipate increasing pressure for price reductions due to intensifying competition, including from new entrants, the launch of competitively superior new products by competitors, and strategic alliances among competitors. If our group's technologies and products become obsolete, or if we become unable for any reason to respond to technological change, we may be unable to maintain our competitive advantage in the market, which could affect our operating results, financial condition and other aspects of our business.」