Fujitsu to beef up cloud computing business

TOKYO, JAPAN: Fujitsu Ltd, Japan's biggest IT services provider, said on Friday it plans to boost investment in cloud computing by 54 percent this year to beef up its operations in one of the IT sector's hottest areas.

It will also seek more global partnerships and acquisitions to expand its software and product offerings, and key targets will include software firms, president Masami Yamamoto told a news conference.

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Fujitsu, the world's third biggest IT services vendor after IBM and Hewlett-Packard, plans to spend $1.1 billion or the majority of what it has allotted for its annual capital expenditure, on its cloud computing business by March 2011.

"This field offers new challenges but it is also a business chance with big growth potential," Yamamoto told a briefing.

"We will make a groupwide effort to build up our cloud business this year."

For the current year to March, Fujitsu expects operating profit to double to 185 billion yen. The company kept its 2011/12 targets for 250 billion yen in operating profit and 130 billion yen in net profit.

Fujitsu has recently been making headlines over the ouster of former president Kuniaki Nozoe, but Yamamoto reiterated that the scandal has little impact on its operations.

Shinkin Asset Management fund manager Tomomi Yamashita said there has been market fears that Fujitsu would cut its earnings outlook, and the company's decision not to change its forecast could be seen as a positive.

He added that recovering IT demand has not been reflected in Fujitsu's share price.

"They can expect a boost from IT services...I don't think these expectations are fully factored into the share price, so it's cheap."