Evolving Strategic Framework for IT Services in Japan

When it comes to Information Technology Services Industry (ITSI), which includes such components as System Integration, Software Development, Package Software business, Outsourcing, and various computer servicing segments, Japan has the second most active market in the world, after the US. Though the size is big, ITSI is mostly domestic oriented. Except perhaps the game software and I-Mode, no Japanese software is known outside Japan. While Japan envisions being the “world's most advanced IT nation” by year 2006, the country offers great opportunities for companies with sound strategies to tackle the characteristic features of the market. This report provides an analysis of the Japanese ITSI market by identifying its peculiar characteristics, major players, and the market needs. The characteristics, such at the low SH-Ratio (the ratio “Software Spending/Hardware Spending”) identify the need for a special type of software, what the author define as “System-Adoptable-Software” for the Japanese market. By considering the dynamics of the market needs, the report provides a framework to identify the future directions of the competitors, including the Indian software companies, who are vying for a share of the big Japanese market.