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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Hitachi to Reorganize Software Service Businesses
  • September 29, 1998 (TOKYO) -- Hitachi Ltd. plans to reorganize its software service businesses, company officials told Nikkei Watcher on IT Business.
    Hitachi said it intends to review its software service businesses and integrate affiliated companies in the business that are under the company's consolidated accounts.

    This will result in the birth of a large-scale software service business unit of approximately 20,000 employees and consolidated sales of about 650 billion yen (US$4.75 billion).

    According to the Hitachi officials, the company's aim with the changes is to compete head to head with IBM Corp. and Fujitsu Ltd., which are ahead in the growing software service market.

    Hitachi plans to integrate its Information Systems group, which has a software service business unit with a staff of approximately 9,000, and its affiliates Hitachi Software Engineering Co., Ltd. with 4,400 people, and Hitachi Information Systems Ltd. with 3,600 people, as well as Hitachi System Engineering Ltd. with 2,000 workers.

    Sources close to Hitachi said that it is yet to be determined whether Hitachi itself will absorb the affiliates or separate its Information Systems group to form a new company in mergers with affiliates.

    How the business is integrated will have significant implications for Hitachi's global strategy for its software service business. The company reportedly will make a final managerial decision by examining multiple options such as acquisitions of large- or mid-size services companies in Europe and the United States, establishment of joint venture companies, or entering into strategic alliances.

    (Nikkei Watcher on IT Business)

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    Updated: Mon Sep 28 17:56:10 1998 PDT