The technology conglomerate was floundering as a result of the softening DRAM market - prices for conventional memory chips crashed as PC sales slowed down and profit margins were fast disappearing.
As Fujitsu’s first System Engineer with an arts background (Akikusa graduated from Tokyo’s Waseda University with a degree in Political Science and Economics), the new CEO of Fujitsu has always insisted on following the sway of market forces when it comes to developing technological solutions.
The chief officer admitted in an interview recently, “sometimes, it’s good not to have a background in technology.” That attitude has allowed Akikusa to remain focused on the demand of the marketplace, steering Fujitsu into new directions over the last few years.
The situation in 1998 was dire. All the top five biggest chip makers of Japan, Fujitsu included, suffered profit losses as a result of DRAM price crash. Hitachi and Toshiba both saw a fall of 90% in group profit that year. Prices of 16 mega-bit chips, the mainstream processor of 1997, fell by 90%.
Akikusa declared then, “We won’t stay in the business of making DRAMs for PCs. We are exiting.”
Over the next two years, Akikusa began guiding Fujitsu’s development and manufacturing efforts from production of baseline, conventional PC chips to high-end, mission-specific memory chips. The aim was to reduce the output of conventional DRAMs to less than half of overall output by the year 2001.
That’s only half of Akikusa’s strategy. In the ensuing years, he also initiated a new motto for Fujitsu to provide “everything on the Internet,” moving the group toward providing services and software as the mainstay of its business.
The strategy brought mixed results. Sales of services and software grew to 40% of Fujitsu’s total revenue in 2000. That same year, the company’s stock rose to a record high on Tokyo stock exchange despite an overall slow-down of the country’s economy.
The upswing didn’t last long. By year’s end, Fujitsu’s share prices plummeted 64% to a two-year low. Its key subsidiaries in Europe and US, ICL and Amdahl, suffered a combined loss of US$142.6 million. In October, the group was forced to cut its earnings forecast by 55% to account for a US$488 million charge to reorganize Amdahl.
Akikusa attributes most of the company’s year-end mishap to a lack of understanding for the “true value” of Fujitsu. “We have many good subsidiaries, but the valuation of Fujitsu as a group is quite low,” he surmised.
"Sometimes, it’s good not to have a background in technology."
Once again, the 61-year-old CEO had to rally his troop. This time, under the banner “the possibilities are infinite.” As of the beginning of this year, the company has embarked on a campaign to re-brand itself. A new corporate brand office that reports directly to Akikusa has been established and a series of programs are initiated to project a unified image to the public.
“I have made this project a major priority of mine,” said Akikusa.
While the effect of rebuilding Fujitsu is still uncertain, given the number of changes that the company has undergone in the last 3 years, Akikusa has found Fujitsu flowing in turbulent currents where global demand for IT solutions and services is fluctuating amid worldwide concerns of an economic slowdown. But float it must. – Thomas Chen, ZDNet Asia