Establishing a Cloud Platform through the ECO System and Cloud Services

「As a result, growth substantially exceeded that of the market, with cloud revenue increasing 38.2% from the previous fiscal year. Demand for cloud services is expected to continue expanding against a backdrop of the ongoing shift to the cloud and the wider use of generative AI.」

「Next initiative: expansion into the governance area」

「EcoOne, a cloud service with operations and cost optimization features that can reduce costs by an average of 30% compared with existing infrastructure investment, continued to perform well, supported by customer recognition of this benefit. Cloud revenue increased 39.5% year on year. Rising costs resulting from licensing structure changes for VMware products (virtualization software) and Oracle products (databases), which are widely used in corporate on-premises environments, have become a major customer challenge and are encouraging customers to migrate their IT environments to the cloud (cloud lift).」

「Repeated price revisions and changes to the licensing structure for VMware products (virtualization software), widely used in companies' on-premises environments, encouraged customers to migrate their IT environments to the cloud (cloud lift), leading to orders for large-scale projects.」

「Cross-selling cloud and security services and promoting comprehensive proposals combining optimal services led to larger projects and increased recurring-revenue orders. EcoOne, a cloud service with operations and optimization features that can reduce costs by an average of 30% compared with existing infrastructure investment, performed well, and new orders during the interim consolidated fiscal period reached a record high.」

「Promoting comprehensive proposals for cloud and the security essential to its operation led to larger projects and increased orders, and the cloud and security recurring-revenue businesses grew significantly. Revenue from cloud and security increased 45.6% from the previous fiscal year.」

「HARMONIZE offers a range of multi-cloud-compatible cloud and security services and solutions to promote customers' use of the cloud. The company has expanded services that address increasingly complex corporate IT environments and diverse needs, and proposals combining these services have led to larger projects and increased orders. Revenue from cloud and security grew to approximately 1.5 times the level of the same period of the previous year.」

「HARMONIZE offers a range of multi-cloud-compatible cloud and security services and solutions to promote customers' use of the cloud. Its comprehensive cloud proposals, including security and centered on services that enable operations at appropriate costs by regularly reviewing cloud usage and eliminating excess resources, have been highly regarded, resulting in growth in the cloud and security recurring-revenue businesses. Cloud orders increased 73.6% year on year, while security orders increased 44.7%.」

「EcoOne, a cloud service with operations and optimization features that can reduce costs by an average of 30% compared with existing infrastructure investment, continued to perform well, and cloud orders reached a record high, up 69.8% from the same period of the previous year.」

「Providing end-to-end support from consideration of cloud adoption through operations and establishment, together with security, which is essential to using the cloud, led to larger projects, and orders for recurring-revenue businesses grew significantly, up 34.1% from the previous fiscal year.」

「In cloud services, the company announced a managed Google Cloud service as a new service under HARMONIZE (December 2022). This expanded its multi-cloud offering to cover the three major clouds, together with Microsoft Azure and AWS (Amazon Web Services), strengthening its ability to provide flexible multi-cloud services that address customers' needs and challenges in promoting DX and migrating to the cloud.」

「Drawing on extensive expertise from serving more than 790 companies, the company has been highly regarded for proposals exceeding customer expectations, including proposals that can reduce cloud usage costs by an average of 30% compared with existing infrastructure investment, and has enabled many customers to migrate to the cloud. DX workshops offer menus tailored to business issues and objectives and propose specific solutions while customers experience the benefits of the cloud. As a result of these customer-focused, hands-on service initiatives, cloud business revenue was ¥2,250 million, up 61.1% from the same period of the previous year.」

「In addition to the existing DX workshops, the company conducted cloud design workshops integrating multiple workshops, helping customers clarify their issues through to their implementation plans and contributing to larger projects. Cloud recurring revenue was ¥1,062 million, up 61.3% from the same period of the previous year.」

「The Optimal Cloud Migration Service for VMware Virtual Environments, announced in December, is gaining traction in winning medium- and large-scale projects. In addition to supporting Microsoft Azure, AWS and IBM Cloud, the new service strengthens the company's cloud services by providing another option for addressing customer issues, including cost savings from cloud migration and compatibility with existing systems.」

「The company's cloud services are distinguished by their ability to visualize customers' current circumstances and propose the optimal cloud service from among multiple options, taking compatibility with existing systems into account. Through a track record of providing cloud services to 1,740 companies and conducting more than 600 Infrastructure Clinic engagements (diagnosis and proposals for optimal configurations), the company has accumulated expertise in multi-cloud implementation and can propose optimal multi-cloud and hybrid-cloud environments for each customer. These initiatives, which enable customers to maintain more optimized cloud environments, have been highly regarded, and the business has grown at a pace exceeding the growth rate of the overall cloud market.」

「In cloud services, the active rollout of DX workshops and close collaboration with major cloud vendors enabled significant business growth. Infrastructure Clinic, with a track record of serving more than 500 companies, estimates the cost savings from migrating to the cloud through Cloud Fitness (Note 3) and presents the optimal configuration for customers' IT infrastructure. In addition, Cloud Health (Note 3), an add-on service to the company's managed cloud service with construction and operations support, EcoOne (Note 4), regularly checks cloud usage environments and optimizes costs and performance by preventing excessive cloud use.」

「In information solutions, New SI, cloud and security, the strategic focus areas of WILD7, grew steadily and drove a transformation in the business structure, while secured value for cloud and security services as recurring-revenue businesses also expanded smoothly.」

「To encourage customers to seriously consider migrating to cloud environments, the Group provided Cloud Fitness, a cloud migration consulting service, based on its accumulated expertise, proposed optimal cloud environments and worked to expand the business.」

「In addition to the high opening order backlog resulting from initiatives undertaken last year, demand for customers to establish telework environments and digitize operations expanded as COVID-19 spread, and the cloud and security businesses grew steadily as recurring-revenue businesses for the future.」

「By proposing measures to strengthen security in telework environments at an early stage in response to the impact of COVID-19, the company made steady progress in orders for cloud security, a key area of focus, while various security services, including endpoint security (Note 3), performed well.」

「In services, ITS, centered on server construction, remained firm, while security and cloud-related businesses, the business areas of WILD7, grew steadily, and new contract value for the cumulative third quarter continued to build following the cumulative second quarter. In security, business for various security services, including endpoint security, remained strong as demand increased for measures against increasingly diverse and sophisticated cyberattacks. Going forward, the company plans to expand security services with its strength in operational support, as well as cloud security services such as cloud configuration audits, cloud access controls and cloud data protection, drawing on the Group's expertise in cloud and security. New contract value for cloud services also continued to build steadily, and the company focused on projects to automate business processes using RPA (Robotic Process Automation) and chatbot projects using AI.」

「In services, server infrastructure construction services remained firm, while security and cloud businesses, the business areas of WILD7, grew steadily, resulting in record-high new contract value for the cumulative second quarter. In security, the company is also focusing on cloud security services, which are expected to achieve significant growth, and the number of projects is increasing. New contract value for cloud services has also been building steadily, while the number of RPA projects, whose use by companies is gaining traction, is increasing.」

「New bookings for cloud services have also been building steadily.」

「In the cloud business, performance remained firm, supported by the benefits of collaboration with business partners on AI-related services and the increasing scale of projects.」

「In the cloud field, business remained firm, supported by the benefits of business collaboration with SoftBank in AI-related services and the increasing scale of projects.」

「Through ongoing initiatives to improve profitability, including ECO System Cloud Services, which provide customers with services in the cloud by combining the optimal solutions; system development, which is delivering higher quality and greater efficiency through rapid development; and cloud security operations and monitoring services, which combine advanced security technologies with a system operations center, the gross profit margin was 25.7%, up 4.1 percentage points from the previous consolidated fiscal year.」

「In systems, business grew in areas including next-generation virtualization solutions, but sales declined as a result of the shift to the cloud.」

「In systems, businesses related to next-generation virtualization solutions and security contributed to profit, but revenue declined as the business shifted to the cloud.」

「Overall business remained at the same level as the previous year, but the results of initiatives to improve profitability, including rapid development, winning high-margin projects and promoting the cloud business, contributed to earnings.」

「The number of users of the cloud business also continued to increase steadily.」

「Cloud proposals also continued to grow.」

「Improving earnings through cloud growth」

「We are working to establish a cloud platform by promoting ECO system and cloud services, which provide services by combining optimal solutions,」