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Can a 15-person startup change a global giant?

Phil Wainewright Profile picture for user pwainewright July 18, 2013
Summary:
Fifteen person French startup RunMyProcess will be a crucial component in pivoting global IT giant Fujitsu to become a cloud powerhouse. Unless it gets crushed in the attempt ...

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Matthieu Hug, RunMyProcess

Fujitsu's acquisition of 15-person French startup RunMyProcess in April caused next to no ripples in the outside world.

But inside the IT giant, the deal was seen as a crucial catalyst for its transformation from old-school infrastructure supplier to next-generation cloud powerhouse:

"It was about finding the company that had the skills to help us realise this bigger vision we had about the cloud being a platform for business," says Dr Ian Thomas, strategy director at Fujitsu.

"We are relying very much on [RunMyProcess CEO] Matthieu [Hug] now to lead our strategy and grow RunMyProcess into that bigger picture. They're going to be at the centre of driving this strategy."

So how does a 15-person startup get to be the linchpin of pivoting a 170,000-employee global behemoth into a new business strategy? And how can it possibly succeed without getting crushed in the attempt?

Sleeping giant

Headquartered in Japan, Fujitsu is easy to characterize as the sleeping giant of the IT industry. It manufactured Japan's first computer in the 1950s and later expanded globally, buying up the leading UK computer manufacturer ICL and compatible mainframe manufacturer Amdahl in the 1990s. In addition to its computer and telecoms equipment businesses, it is the world's third largest IT services provider by revenue after IBM and HP.

Like its rivals, it faces uncertain times in today's rapidly changing digital landscape. But whereas IBM and HP have sought to acquire existing software companies in order to lessen their reliance on hardware and services, Fujitsu is looking to a future in which enterprises assemble cloud services to meet their business needs, as Chiseki Sagawa, corporate vice president and head of its Global Software Centre, explained to me in a recent interview:

"We do not need to worry about cannibilizing [our software business] outside of Japan, so we can be aggressive ... The opportunity [for Fujitsu is] quickly composing and reusing services — to develop the next generation of Amazon at the higher level."

Missing pieces

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Ian Thomas, Fujitsu

RunMyProcess provides the crucial missing pieces to move forward with this strategy, explains Thomas: "We were really clear when we purchased RunMyProcess, they were these 10 boxes in the middle."

Fujitsu already had the underlying infrastructure in the shape of a global network of datacenters that use advanced IT automation to deliver cloud infrastructure services. Layered above is an app store infrastructure with a complete set of provisioning, billing and payment services that were built to allow ISVs and enterprises to distribute and monetize cloud services.

The cloud-native integration platform of RunMyProcess adds the glue that binds services together as needed to deliver useful business outcomes.

"When you bring what they have together with what we already have, it's much more than the sum of the individual parts," says Thomas.

Cloud DNA

Chiseki Sagawa, Fujitsu
Chiseki Sagawa, Fujitsu

It was also important that RunMyProcess has been built from the ground up to operate reliably as a cloud-native set of services interacting easily with others.

"It had the most cloud-native architecture, which meant they had the lowest [operating] cost from day one," says Sagawa. "I wanted to have an architecture that allows you to scale but without adding to the operating cost."

Thomas adds that culture was important too, lending weight to the impression that RunMyProcess is intended to play a significant role in helping to evangelize a cloud mentality within Fujitsu.

"There were lots of interesting technologies that we looked at but that didn't mean that the companies themselves had cloud DNA," Thomas explains. "It's definitely cloud nature and culture [that was more important], because the technology is what follows from that."

The startup's partner channel was another valuable asset for Fujitsu. "RunMyProcess has a partner channel of boutique system integrators who can move very quickly," says Sagawa. "All those players work with Amazon, Salesforce, Google, not with IBM or HP or Oracle."

The final factor was the fit, says Sagawa: "Most important was the vision they had for the future and their willingness to work with a company like ourselves."

Crunching weight

Such sentiments are common in the first flush of an acquisition. All too often, the outcome when a young startup is absorbed into a much larger host is that it disappears without trace within a year. This prospect was front of mind from very early on in their discussions, says RunMyProcess CEO Matthieu Hug:

"A couple of weeks after the very first contact with Fujitsu, the single question on which we spent the most time with Fujitsu management was the risk of crunching RunMyProcess under the weight of Fujitsu. What will really be the answer is whether we deliver over the next three years. The starting point is that we are extremely conscious about this risk."

Hug and his colleagues were encouraged by the high-level attention Fujitsu paid to them during the several months it took to finalize the deal. At one point corporate senior vice president Akira Yamanaka flew in from Japan to visit their offices in Paris. "He spent more than an hour talking to us about our platform and finding out how it worked. It was really a surprise for someone that high up to show such interest," says Hug.

The ability to scale faster using Fujitsu's resources was attractive to RunMyProcess. As the size of deals it was landing had grown, so too had the frequency with which customers asked questions about its viability. "We're now able to answer the question whether we'll be there in two years," says Hug. "Now I can answer, 'We're going to be there, that's for sure."

Long-term goal

But it's the ability to influence and participate in Fujitsu's cloud ambitions that has been the clincher. "One of the reasons I built RunMyProcess was because I was fed up with the idea that Silicon Valley was the only place where you could innovate in IT," says Hug. Joining Fujitsu maintains that direction.

"It was an interesting fit with our philosophy and the scale of what we want to build," he adds. "Fujitsu sees cloud computing as one way to increase their footprint, especially in Europe and the US."

The startup's ability to attract global customers "was intriguing for our Japanese friends," he says. At the time of acquisition, RunMyProcess claimed a track record of more than 300 active projects in 45 countries.

Fujitsu's ability to build on that track record at the same time as injecting more 'cloud DNA' into other parts of its operations remains to be seen. Can RunMyProcess become the catalyst that launches the transformation of a multi-billion pound, decades-old global business? It's a tall order.

One thing's for sure: it won't happen overnight. But that's not the way the Japanese do things anyway, and that may be what gives this plan a chance of success, provided the participants can stay the course.

"Fujitsu tends to think in decades rather than in quarters," says Thomas, and Hug adds his agreement: "They look at the long-term goal, which is to build a global platform, not just the short-term objectives."

Disclosure: Oracle and Salesforce.com are diginomica premium partners at the time of writing. RunMyProcess is a former consulting client of the author. Dr Ian Thomas represents Fujitsu on the board of EuroCloud UK, where the author serves as chair.

Photo credits: Spark © PRILL Mediendesign - Fotolia.com; headshots courtesy of Fujitsu

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