How an Overseas B to B Startup Successfully Collaborated with a Japanese IT Firm
An example of collaboration between Soha Systems (now part of Akamai Technologies) and Fujitsu
Fujitsu Laboratories of America Researcher
Senior Director, Marketing Strategy Office, Fujitsu Limited
Business Development Dept. Marketing Strategy Office, Fujitsu Limited
The Japanese IT market size is massive. However, differences in language and business customs make it difficult for overseas startups to penetrate into the Japanese IT market. Fujitsu is Japan’s largest IT service provider and has helped the development of startups into Japan. Through the Fujitsu Accelerator Program, Fujitsu is looking to collaborate with startups from all over the world. We asked about one example of collaboration between a startup and Fujitsu: Soha Systems, a security startup from Silicon Valley that is cooperating with Fujitsu through the accelerator program. (Note: Soha Systems was acquired by Akamai Technologies in October 2016. Akamai is a long-standing Fujitsu partner.)
Developing a secure access service for cloud applications
―First, could you give me an overview of Soha Systems?
Ziv：We were a young startup, originally founded in 2013, that provided secure access service for any behind-the –firewall enterprise application, be it cloud applications or traditional on-premise applications. Our service allows businesses to simply and securely provide remote access to their employees and 3rd parties, without needing to purchase their own appliances, servers and go through lengthy and costly integration and configuration.
Tokunaga： Soha Systems entered our accelerator program in 2016. Soha Systems’ service provides users with high security in the cloud simply and conveniently. This is a service that we feel is in line with Fujitsu and has immense possibilities.
Ziv：Our clients include large corporations like Fujitsu, and using our service would help them greatly reduce costs and increase security. One of the challenges we faced was that our competitors much larger than us, so partnering with large vendors such as Fujitsu was one of our key strategic choices. That was when we were acquired in October 2016 by Akamai, a company that provides global CDN and cloud services. Soha became a central pillar in Akamai’s newly established enterprise division.
How can you penetrate into the Japanese market?
―Japan is the world’s third largest economy, headquartering numerous global companies. Doing business in Japan is useful in building up reputation and branding awareness. What would you say are the challenges for startups trying to enter the Japanese market?
Tokunaga： The Japanese IT market has a unique make-up. System integrators have a huge presence in Japan, and proprietary IT product vendors rarely contract directly with a company’s IT division. So startups need to change their business style. Japanese corporations have very detailed requests, making it difficult for startups to handle them.
Ziv： Thirty percent of our customers are outside of the United States. Having a cloud service makes overseas deployment easier. However, typically startups don’t have the required resources to localize their solutions for the Japanese market and establish a significant footprint there, so they need to partner with an IT service provider like Fujitsu in order to be able to offer their services to Japanese companies.
World’s top five IT service provider
―What differentiates Fujitsu from other Japanese IT service providers?
Yoshizaki：First, our size and our track record. Fujitsu has expanded operations into more than 180 countries worldwide with a staff of around 160,000 to support our customers. We are also the No. 1 IT service provider in Japan and amongst the top five in sales globally. FORTUNE chose us as one of “the World’s Most Admired Companies” five years running.
Watanabe：We also have plenty of examples of partnerships with global IT companies, such as Cisco Systems, Intel, Microsoft, Oracle, and others. We work together with our partners to introduce them to the Japanese market.
Ziv：Fujitsu is a large company, but they are surprisingly quick and flexible in their actions. Their quickness and flexibility are something that I’ve never seen in Japanese companies that I’ve worked together with in the past. For example, even before the contracts were signed our Fujitsu counterparts introduced me to many Fujitsu executives and business groups, and we began a good number of POCs with these groups very fast and very early.
An accelerator program with crystal-clear goals
―Tell me about the Fujitsu Accelerator Program that Soha Systems is part of.
Yoshizaki： The Fujitsu Accelerator Program is a program that combines the technology and services of innovative startups and Fujitsu’s products, solutions, and services to provide new value to the world. We are looking for startups mainly in the categories of AI, IoT, security, and cloud platforms.
Participating startups can offer the collaboration product to Fujitsu’s customer base of around 170,000 companies, as well as utilizing Fujitsu’s assets including sales, maintenance, production, and call center functions that are required to develop business on a large scale. Twenty five companies have joined the accelerator program over the past two years, and some 60% of those have been incorporated into Fujitsu’s offerings or been able to provide joint proposals to customers.
Watanabe：Startups in their early to middle stages are eligible. We believe that B to B startups who want to approach the Japanese market are best fit with Fujitsu. The size of the existing business is not important; however startups must have a released product when they apply for the program.
―What are the main activities in the program?
Watanabe：The program lasts for three months. We test and verify the product, consider whether to incorporate it into Fujitsu’s services, and test implement it with a client. Japanese standards are very strict, so startups have thanked us, saying that they were able to discover various bugs and improved quality thanks to Fujitsu.
Tokunaga：The program focuses on promoting cooperation. Meetings with startups are mainly done over conference calls. It’s also not a requirement for the startup to receive funding. Actually, Akamai acquired Soha Systems right in the midst of talks about funding. We weren’t lucky – we should have funded them (laughing).
―Why did Soha Systems decide to join the program?
Ziv： I have known Fujitsu as a large multinational IT vendor. I was introduced to Mr. Watanabe, who offered we join the accelerator program and worked closely with us to build the path of partnership with Fujitsu. We immediately saw the tremendous value of the accelerator program.
Watanabe：You applied in February 2016.
Ziv： That’s right, and then the program actually started in March. We knew there was a chance for a partnership with Fujitsu so we took the accelerator program very seriously. The Fujitsu IT team performed testing and even granted us a fee-based pilot.
The business units are committed to the program
―What results did you actually get from joining the program?
Ziv：The goals of this program are clear compared with other general accelerators. Since the focus is on collaboration with Fujitsu, it has been extremely beneficial and given us huge results. We are a small startup, but thanks to the accelerator program we were able to collaborate with Fujitsu at a scale that would have not been possible had we done it only on our own.
Tokunaga： Our accelerator program focuses on the goal of doing business together with Fujitsu. A main feature is the commitment of our business units. In other programs, it is not rare that a program office chooses a startup, only to find out that they can’t get the commitment of the business units. In the Fujitsu Accelerator Program, Fujitsu’s business units commit to support the selected startup, so the collaboration is extremely smooth and efficient.
Ziv：Actually, we plan to sign a sales contract with Fujitsu soon and provide our services on Fujitsu’s K5. We should start marketing in Spring 2017. This is a huge achievement for a startup as small and young as Soha. If we hadn’t entered the program, it probably would have taken us months to find a key contact within Fujitsu to collaborate with them. Fujitsu’s management was committed to us in this program. All the obstacles in collaborating with Fujitsu had been removed.
A strategic partner beyond the Japanese market
―What sort of development will your two companies be pursuing in the future?
Ziv：Thanks to the accelerator program, collaborating with Fujitsu has gotten huge. Soon Fujitsu will be our strategic partner not just in Japan but around the world.
Tokunaga：We are planning to develop both in the U.S. and U.K. I look forward to working together with startups that will change the world, like Soha Systems.