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0
50
150
200
100
0
3
6
12
9
86.6
3.9
163.3
6.7
5.5
6.4
5.7
140.4
156.1
128.4
2005 2006 2007 2008 2009
0
20
60
100
80
40
0
2
4
10
8
6
91.3
4.1
87.7
4.4
4.1
81.6
2007 2008 2009
0
1,000
3,000
2,000
2,200.4
1,002.6
976.1
221.5
2,427.72,559.32,453.22,266.2
2005 2006 2007 2008 2009
1,129.3
75.1
1,020.4
1,037.2
208.5
1,091.0
1,164.8
197.3
1,258.8
1,215.2
85.2
1,223.1
Operational Review and Outlook
(Billions of yen) (Billions of yen) (%) (Billions of yen) (%)
Operating income (left scale)
Operating income margin (right scale)
Capital expenditure (left scale)
Ratio of R&D expenditure to net sales (right scale)
* For entire Technology Solutions segment
(Years ended March 31) (Years ended March 31) (Years ended March 31)
Sub-segment Sales* Operating Income/
Operating Income Margin
Capital Expenditure, Ratio of
R&D Expenditure to Net Sales*
Technology Solutions/Services
Solutions/SI
Infrastructure Services
* Including intersegment sales
Others
[Fiscal 2008 Business Results]
Market Trends
The value of Japan’s IT services market in 2008 increased 3.5% year
on year to US$50.7 billion. IT investment increased in many indus-
try sectors, reflecting continued major system mergers for banks
(a trend seen in the previous year) in the financial sector, invest-
ments in the insurance and securities field to enhance compli-
ance, demand for system upgrades from the public sector, and IT
utilization to enhance operational efficiency in the manufacturing
and retail industries. By service type, in addition to system integra-
tion demand, customers are now relying more on outsourcing to
cut costs. Accordingly, an increasing number of companies out-
sourced system operations and some business operations, through
datacenter-style outsourcing and business process outsourcing,
during the year under review.
The global market for IT services grew 5.2% in 2008 year on
year to US$578.6 billion. The market was impacted by sluggish
investment in North America and Europe, most notably in the
financial sector, due to the economic downturn triggered by
financial instability. In spite of this, the market expanded, led by
double-digit IT investment growth in newly emerging economies.
The IT services sector itself also diversified, as cloud computing
and the “Software as a Service” (SaaS) model—whereby networks
serve as delivery vehicles for software and services—gained trac-
tion, especially in North America.
Operational Review
Sales from the Services sub-segment (Solutions/SI, Infrastructure
Services) declined 5.1% from the previous fiscal year to ¥2,427.7 billion.
Excluding currency exchange rate effects, sales increased by 3%.
Solutions/SI: Sales decreased 2.8% to ¥1,223.1 billion. Excluding
currency exchange rate effects, sales were flat year on year.
In Japan, our system integration business expanded in many
fields with legacy system upgrades in the public sector, NGN-
related solutions in the telecommunications sector, system inte-
gration in the financial sector, and consulting to ensure compliance
with amended laws. To expand our business outside Japan, we
integrated three solutions companies based in North America—
Fujitsu Consulting, Fujitsu Transaction Solutions, and Fujitsu Com-
puter Systems. We also took steps to reinforce Fujitsu Australia’s
business structure by acquiring the local IT services firm KAZ
Group Pty Ltd.
Infrastructure Services: Sales decreased 7.1% to ¥1,129.3 billion.
Excluding exchange rate effects, sales grew by 6% year on year.
Demand for outsourcing services to cut costs grew strongly
worldwide, and in Japan, outsourcing services expanded in vari-
ous forms including datacenter utilization, support desk services,
and application operation and maintenance. Outside Japan,
Fujitsu Services expanded its business by targeting the private
sector across continental Europe, recording increased sales on a
local currency basis.
Operating income rose 16.3% year on year to ¥163.3 billion.
Positive factors included the absence of a provision for losses for
an unprofitable project booked the previous fiscal year, and ben-
efits from increased sales and greater cost efficiency, particularly
in Japan. These factors absorbed the effects of increased expenses
from a shortfall in pension funds from the previous fiscal year, and
currency exchange rate volatility.
030 ANNUAL REPORT 2009
FUJITSU LIMITED