Consolidated Financial Results for FY2020
Cloud Business (2)
Growth
Strategy
➤ Cross-selling Cloud services with various network services and SI function
IIJ's Competitive Advantages
IIJ's competitive advantage
➤ Blue-chip client base: Hands-on/close relationship with clients (Cloud as a cross-selling element)
➤ New business opportunity: Because blue-chips' internal systems have been covered by legacy system integrators, it is a new
business opportunity for IIJ once such systems migrate toward Cloud. IIJ has not dealt with legacy internal enterprise systems
➤ Various network service line-ups such as security and various ways to access cloud systems (mobile, WAN, etc.)
Competitors
➤ AWS (Amazon) & Azure (Microsoft): Strong scale merit. Focus on public cloud. Not so strong about meeting individual systems needs
Because start-ups and SMEs do not have to worry about so much about existing systems, they tend to use Cloud services
much more and much faster compared to large blue-chips who have large and complex existing systems
➤ Legacy system integrators who constructed and currently looking over blue chips' large internal systems
Multi-Cloud Strategy
Japanese enterprises avoid relying on single cloud service vendor and demands for multi-cloud is increasing
➤ IIJ provides private connectivity with Microsoft Azure/365, AWS (Amazon Web Service), GCP (Google Cloud Platform)
➤ IIJ provides operation and management services to effectively monitor an entire IT systems, covering IIJ's cloud services, other
cloud vendors' cloud services and on-premise systems.
IIJ's Cloud Business Model
Revenue
Revenue depends on system volume (i.e. number of cloud servers, volume of storage)
➤ Total Cloud revenue is to expand along with an increase in customer numbers and each system volume
Cost
➤ Leasing fee for data center space, depreciation and amortization cost for servers and other network equipment, outsourcing cost
and personnel costs for service developments
Profit
➤ Currently very low profitability, need more revenue to have economy of scale
Internet Initiative Japan Inc.
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