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Fujitsu puts systems chief at helm

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Since last September, struggling IT supplier Fujitsu has been trying to right itself and do so without a president, with double-duty falling on the shoulders of Michiyoshi Mazuka, the company's chairman. But Fujitsu has now tapped an executive who has run several Fujitsu divisions and who currently runs its systems business, hoping to steer the company back to profitability.

Beginning April 1, Masami Yamamoto - who has been a corporate senior vice president and president of Fujitsu's Systems Products Business group - will become president of the entire Fujitsu conglomerate. Yamamoto takes over from Kuniaki Nozoe, who vacated the post for medical reasons back in September 2009. Yamamoto joined Fujitsu in 1976 and rose through the ranks to become general manager of the mobile computing division of Fujitsu's Personal Systems Business group in December 1999.

Three years later, he was named a senior vice president within that group, and in June 2005, he was put in charge of the group as president. In June 2007, Yamamoto did a lateral move, becoming president of the Ubiquitous Products Business (which now includes PCs, mobile phones, and disk drives), and in June 2008, he did another lateral slide, taking over as president of the server group.

At 54, Yamamoto is young by Japanese standards at least, to be running such a large company. According to a report in the Wall Street Journal, the Japanese press this morning peppered Yamamoto about his relative youth and his ability to get Fujitsu's senpai, or corporate elders, behind the restructuring moves and transformation that Yamamoto must make to get Fujitsu back to profitability.

Yamamoto told both the WSJ and Reuters that the company still had some work to do on restructuring. He said that despite rumors, the company planned to keep developing its own Sparc64 processors for servers. He added that getting Fujitsu's chip business - which includes a lot more stuff than the Sparc64s - back to profitability was the first priority. Once this is accomplished, then Fujitsu could entertain the idea of selling the unit or taking on partners, Yamamoto explained.

Since last April, Fujitsu has been in the process of moving some of its chip process development and manufacturing to Taiwan Semiconductor Manufacturing Company, and last February, the company sold off its disk drive business to rival Toshiba for $304m. Other business units or products could come under the axe.

Exactly what Yamamoto has planned for Fujitsu is not yet clear, beyond his statement that he wants "to make Fujitsu a truly global IT firm," according to Reuters.

One of the obvious things that Fujitsu could do is strike some kind of joint development agreement with Oracle once it takes control of Sun Microsystems, possibly using TSMC as the fab for both the Sparc T series of multicore chips designed by Sun and the Sparc64 family of chips from Fujitsu. The latter have fewer cores, higher clocks, and larger cache memories, and they're designed for midrange and high-end SMP servers.

Sun has been shopping for a fab partner for the future Sparc T chips and Oracle surely doesn't want to bear the full costs of creating and maintaining a full Sparc lineup (which Sun only has today by virtue of its partnership with Fujitsu) unless it aims to steal all the Sparc server business from Fujitsu. Having Oracle, Fujitsu, and TSMC work together could be the key to revitalizing the Sparc platform, if that is indeed the goal at either Oracle or Fujitsu.

Oracle has been perfectly content to support RISC/Unix servers while bad-mouthing them for being expensive and at the same time promoting Linux on x64 iron as the cheaper and better alternative. While Oracle will surely try to turn a profit out of the legacy Sparc/Solaris base, that is not the same thing as pushing it as a preferred platform. So expect platform neutrality out of Oracle, which is what IBM, Hewlett-Packard, and Fujitsu do. They all have multiple architectures and operating systems.

Last March, when Fujitsu shelled out €450m to buy Siemens out of the Fujitsu-Siemens server and storage partnership in Europe, Fujitsu spent a lot of time taking about its x64-based Primergy server plans and said very little about its Sparc64-based machinery. Part of the reason was that at the time, IBM was in the process of trying to buy Sun, an acquisition that failed and drove Sun into the (loving?) arms of Oracle.

Back in July 2009, before he stepped down, then-president Nozoe said that for the fiscal 2009 year ending in March 2010, Fujitsu projected sales of ¥4,800bn ($50.4bn) across its disparate hardware, software, and services product lines. That would be a 2.3 per cent increase over the ¥4,693bn ($49.3bn) in sales for fiscal 2008 ended in March 2009.

Fujitsu's operating income for fiscal 2009 was projected to be around ¥80bn ($841m, up 16.4 per cent), and Nozoe said that Fujitsu hoped to swing from a ¥112.3bn ($1.2bn) net loss in fiscal 2008 to a ¥20bn ($200m) net income the current fiscal year. Looking further out - and this was when the global economy was not yet recovering - Nozoe said that Fujitsu planned to push sales to ¥5,000bn ($52.5bn) in fiscal 2010 (ending in March 2011), an increase of 4.2 per cent over this fiscal year's projected sales, with operating income projected at ¥250bn ($2.6bn) and net income of ¥130bn ($1.4bn).

Thus far, fiscal 2009 has not panned out exactly as Nozoe, Yamamoto's predecessor, had planned. In the first half of the fiscal year ended in September 2009, Fujitsu had sales of ¥2,186bn, down 10.9 per cent, an operating loss of ¥18.2bn (compared to a modest operating profit in the year-earlier six months), and net income of ¥43.2bn (up by nearly a factor of ten and only because Fujitsu sold ¥89.5bn in shares it had invested in another company).

Today, Yamamoto did not provide any guidance as to how the second half of fiscal 2009 was going. ®

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