Microsoft in alliance with Fujitsu

By Reuters
Tokyo, 22 Sept 2000

Microsoft dug deeper into one of its biggest growth markets in an alliance with Japan`s dominant computer maker Fujitsu aimed at the business market, the companies said on Thursday.

The deal, the second major Japanese alliance for Microsoft this year, calls for Fujitsu to set up a new centre for maintenance services and system integration mainly for business clients using Microsoft`s Windows operating system.

The US software giant was expected to help market Fujitsu`s software products globally, while Fujitsu would combine its hardware and software with Windows products for sales to Japan`s corporate market.

"There are hardly any companies at all that have the capabilities that Fujitsu has," Steve Ballmer, Microsoft`s chief executive officer, told a news conference in Tokyo.

In June, Microsoft struck a deal with Fujitsu`s rival Hitachi Ltd to form a core set of Windows` 2000-based systems for corporate customers, an area where Microsoft appears to be trailing its competition.

While it dominates the Japanese personal computer market with Windows, it has lagged behind operating systems specialized for corporate use, such as Unix-based systems.

Fujitsu President Naoyuki Akikusa said the alliance will focus first on the Japanese market but eventually would expand globally.

"I believe we can work out a win-win relationship," he said.

Investors paid little attention to the announcement, with Fujitsu shares ending Thursday down 0.52% at 2,845 yen.

Doubling Revenue

Fujitsu also said it intends to more than double its Windows-related revenue from corporate clients in the next three years, although it would not give details on its current revenues for Windows-related corporate users.

Ballmer said the deal would aim to create unified platforms of hardware and software to growing numbers of corporate users who need systems to support e-commerce Web sites.

"Customers will want suppliers to provide not only software and platform, these are the expertise of our company, but also the whole solution -- hardware, software, services -- areas in which Fujitsu has an amazing capability," Ballmer said.

Microsoft`s joint venture with Hitachi is set to be formed next month and to target annual sales of 20 billion yen ($188 million) by 2003.

The alliances with both Hitachi and Fujitsu are seen by analysts as part of Microsoft`s drive to enhance its business in Asia, now the fastest-growing market for the software titan.

Microsoft chairman Bill Gates said this month that established Asian markets such as Japan and Korea were generating healthy sales, while it expected strong future growth from China and India.

($1-106.46 Yen)


Reuters News Service

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